Student Debt and Higher Education

There is no doubt that students are graduating with more debt for a college education than they did even a decade ago. However, student debt is not a new issue. Without student loans, I would not have been able to go to college. Loans carried me through my bachelor's, master's, and doctoral degrees. It was a happy day when I paid them off, not all that long ago.

Student debt has been a hot topic of discussion in Washington, Albany, and all around the country. Such debt is causing many college graduates to move back home as they can't afford one of their own. These graduates are losing lifetime wealth due to college debt. Although this may be true, it may not be the entire issue.

Higher education institutions are funded differently depending on type. Some institutions are for-profit, some are private non-profit, and some are public four-year or two-year colleges. Thus, the costs borne by students at these different institutions may vary considerably.

Community colleges, like Fulton-Montgomery Community College, are publicly supported. In New York State, community colleges were to be funded one-third by tuition, one-third by the sponsoring county, and one-third by the state. While FM strives to remain affordable for all (with a tuition rate of around $3,648 per year), we are far from that formula, with students bearing more than 45 percent of the cost of their education. Indeed, for those institutions that are publicly supported, support has been dwindling. According to a January 23, 2012 Chronicle of Higher Education article, state support for higher education dropped an average of 7.6 percent in 2012. For FM, our state support per full-time equivalent in 2006 was $2,675; in Fall 2010 it was $2,260; and, in Fall 2014 it will be $2,485.

Costs for higher education have increased as well. In addition to salaries, other costs have increased. High technology labs require high tech equipment. Students expect and use technology all across campus; faculty use technology to teach their classes. Software, bandwidth, business systems, servers, fiber optics, telecommunications, etc., all require dollars to keep up, while public investments have gone down.

With increased costs in higher education and lower public investments, tuitions and fees increase; students rely on loans; and debt increases. President Obama and Congress agree that this problem needs to be fixed, but they are in disagreement on how to do so. No matter, I am concerned that a political reaction is not a fix. I recently heard someone at a conference state: "Congress does two things well, 1. Nothing, and 2. Over-react." I am worried about the latter.

What should we do? First, we need to have a discussion about what is a reasonable student debt upon graduation. College is an investment in your future, what is that investment worth? Second, colleges need to be very clear in their financial aid packages on what portion of aid is a "grant" and what portion is a "loan." Students and parents need to see what their monthly payment will be and how long it will take to pay off the loan. Third, we need to decide if college education is worth public investment. All of the research validates that those with a college education earn more in a lifetime, are more resilient in difficult economic times, are healthier, and are more involved in their communities. That seems worth it.