Of all of the facts and figures to come out in recent months about college affordability and student debt, the most attention-getting might have been the revelation that U.S. student loan debt has surpassed credit card and auto-loan debt, topping a whopping $1 trillion.
The average student loan debt nationally is now more than $25,000, up more than 25 percent over the past 20 years. The average debt for Indiana University students who graduated from the Bloomington campus was $27,752 when last calculated in 2010 and may well be higher today.
The average figures don’t provide an adequate picture of what’s really happening to some students and their families, however. James Kennedy, associate vice president for student enrollment services at IU, points out that 45 percent of Bloomington students graduate with no debt at all. And for those with debt, the amount can range from a little to a lot and the loans can be federally subsidized or private, with significantly different repayment plans.
As she enters her senior year at IU, Massachusetts native Kate Lavery puts her own debt at $18,000 and her family’s at $80,000.
“When you look at it from the perspective of families,” Kennedy said, “higher education becomes the second largest investment a family will make, besides buying a home. And that’s for a public institution, not private.”
Rising tuition and costs
The overall cost for an in-state student to attend IU Bloomington last year was $22,150 including tuition and fees, room and board, transportation and books. For out-of-state students, the cost was about $42,000 — a substantial amount, but still less than the in-state costs at many of the nation’s elite private institutions.
When a group of students disrupted a recent IU Board of Trustees meeting with a litany of complaints, one hard-to-ignore figure they cited was IU’s 45 percent tuition increase over the past five years.
Kennedy disputed that figure as about double the actual tuition increases, but he acknowledged that “everything has gone up, from room and board to just about everything in life. The price of anything rarely goes down,” he said. “The culture has changed a lot, with electronic devices and access fees to lifestyle expectations students today have that maybe students 30 years ago did not have.”
University officials across the board bemoan tuition increases but defend them as necessary as state funding has remained relatively flat.
Some observers agree. “A huge part of the problem is state disinvestment in higher education,” said Mamie Lynch, a research and policy analyst for the nonprofit Education Trust. “Now, at public research institutions, students and their families are bearing about half of the cost of going to college, and this disinvestment has led to direct tuition increases.”
Indiana state Sen. Luke Kenley, R-Noblesville, strongly disagrees. “I don’t think tuition is being set on the cost of providing services. I think it’s being set on how much we can extract from the individual,” he said.
“If you look at any historical set of numbers, you’ll find that the tuition at colleges has increased substantially more than almost any other market basket item of purchases, whether you look back five years or 10 or 20. It’s increased pretty dramatically.”
But while state funding to public institutions has clearly declined in its proportion of what colleges and universities cite as their overall costs, often overlooked are other pressures on colleges and universities, especially the health care costs for employees that have risen by 8-12 percent virtually every year.
“In the last five years, IU’s health care costs have increased by $77 million. We have about 88,000 full-time students (on all IU campuses). This is about $875 (over that period) in additional tuition per student for employee health care,” said Neil Theobald, senior vice president and chief financial officer.
Fair to call it a crisis
Stan Jones, who served for 12 years as Indiana’s commissioner for higher education, said the current crisis in college affordability and student debt “has been a long time in developing. Tuitions have been doubling every 10 years for quite a while now. Debt has been tripling every 10 years.”
But, Jones said, it’s fair to describe the current situation as a crisis. “We’re in the perfect storm,” he said in a recent phone interview from his Washington, D.C., office. “States don’t have the money to put into education as they have in the past. That’s shifted the burden to students and the job market is not good, so people don’t have as much money and the loan burden has increased. All of these factors are coming together at the same time.”
Having served 16 years in the Indiana Legislature, Jones said he’s not one to point fingers at Indiana or any other state government. “It’s not because the states aren’t trying. They just don’t have the money,” he said.
“I can remember when (former Gov., Otis) ‘Doc’ Bowen, in one of his State of the State addresses, said he thought the fair ratio a student should pay was about a third of the costs of attending a state institution, and the state should pay two-thirds.”
The state now contributes about 16 percent to IU’s annual budget. And in some states the percentage is even lower. The University of Michigan, long considered one of the nation’s best public universities, now gets less than 10 percent of its budget from the state.
Holding down debt
Jones now heads a nonprofit organization called Complete College America. One of its primary missions is to promote rapid or “on-time” degree completion as a means to hold down borrowing and increased student debt.
Indiana’s current Higher Education Commissioner Teresa Lubbers and the Indiana Education Roundtable echo the same goals, urging “on-time” goals such as an associate’s degree in two years and a bachelor’s in four. While Lubbers acknowledged last spring that “the nontraditional student has become the majority, and we need to acknowledge that,” she also is putting the power of the Commission for Higher Education into pressure on universities to guide students to degree completion, whether it’s a one-year certificate or two-year associate’s degree that might be offered by Ivy Tech, or a four-year bachelor’s degree at IU.
“We live in a credentialed society,” Jones said. “It’s estimated that a young person who earns a bachelor’s degree is going to earn $1 million more over the course of a lifetime than a student who doesn’t have that diploma.”
©2012 the Herald-Times (Bloomington, Ind.)
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