Spending $4 trillion to fix inequities in U.S. higher education would pay for itself in 9 years: RPT

Yahoo Finance’s Aarthi Swaminathan breaks down leveling inequities in the U.S. higher education system.

Video transcript

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- Welcome back. A new study shows that while expensive, spending $4 trillion in fixing inequities in higher education would pay for itself within a decade. We have our education reporter, Aarthi Swaminathan, joining us now with all of the details from that study. Hi Aarthi. So what is happening here from this report?

AARTHI SWAMINATHAN: Yes, we have a new study from Georgetown and it's pretty bold-- like you said, $4 trillion, like huge price tag. But it's basically addressing the massive inequities in education. We know that there is a difference between the average white individual and Asian-American individual and the rest of the population in terms of how their educational attainment has been.

So this is a thought experiment from Georgetown Center for Education and Workforce, and they said if you spend $4 trillion, this is what the payoff will be. You will save $965 billion annually because you would not just improve earnings, therefore increase tax revenue, you would increase spending, increase, therefore, GDP. You will also reduce reliance on public assistance programs, public health programs, criminal justice expenditures. And the bigger implication of this is in nine years, by spending $4 trillion now, you would actually benefit more, you would gain more in terms of benefits to society rather than just the costs.

And I thought this was-- initially when I looked at the price tag, I was like, this is just so expensive. It's twice the cost of the American Families plan, which is already something a lot of people are saying is expensive, but when you look at just zooming out in terms of higher education and the people who are left behind this, the benefits seem pretty reasonable to me.

- As they always say the prevention is always worth a lot more than the cure. And always