The Knewton Blog


Higher Education Today: spotlight on college debt

Posted on June 11, 2012 by

2

graduation

With graduation season upon us, the topic of college debt is predictably ubiquitous. Last week, as I browsed Knewton’s Higher Education Today portal, which aggregates news stories related to higher education and organizes them by state, I was afforded a comprehensive look at just how student debt is affecting individual states as well as the nation as a whole.

Here’s a quick look at what I found.

The Problem

Time Moneyland’s “Has graduation season become the most depressing time of year?” contains a series of shocking stats like the following: “The average student debt load tops $25,000 in the U.S., while the job market for recent graduates continues to struggle. More than 95 U.S. colleges report that their 2010 graduates — the most recent data available — owed on average more than $35,000, and 73 colleges reported that more than 90% of the 2010 class had student loan debt, according to an analysis by the nonprofit Institute for College Access & Success’ Project on Student Debt.” The problem is, of course, augmented for college dropouts who are in serious debt but hold no college degree.

To get a look at how college debt is affecting your state, subscribe to your state’s feed at the higher ed portal. State-specific articles like “Crushed by College Debt” contain nuggets of good-to-know information like the following: “130,000-plus Michigan residents are trying to repay school loans, and 10,711 are in default. Their average debt in 2010: $25,675.”

Solutions?

Several opinion pieces express enthusiasm for the 3-year degree, which is gaining momentum at several universities. Others, like this editorial from Christophe Pierre of the University of Illinois, argue that tuition reflects market realities and advocate for “differential tuition” as a way to at least partially address the problem. The opposing view is taken in the USA Today editorial, “Differential Tuition Hurts Undergrads, Economy” which describes the practice as “bait and switch” for students and ultimately, as taking the “‘universal’ out of ‘university.’” The incredible potential of online learning is also making its way into headlines.

Policy

The political side of the issue has played a notable role in recent campaigns: President Obama has been touring the nation and stressing the need to hold down college costs and urge Congress to pass a law preventing interest rates on some federally backed loans from doubling (scheduled to happen July 1). GOP nominee Mitt Romney has expressed similar concerns, though he differs in what he believes the federal government’s role should be.

The article, “College debt a ticking time bomb” notes, however, that “neither party has proposed a long-term solution for the time bomb represented by the estimated $1 trillion balance owed on student loans.” The article describes student debt as “several time bombs ticking simultaneously”: the economic fallout of a default rate that has doubled in recent years; the projected drop in economic demand as young people begin putting off major purchases that come with marriage, family, and home ownership; and the erosion of the American promise of meritocracy.

Check out Knewton’s Higher Education Today portal for more curated stories!

Posted in Education & Technology, Knewton | 2 comments



  • chris john

    Hi Christina, I agreed its very hard to afford a student the debt load.and yes Obama should make a rule for colleges to decrease the cost of study. as a student I’m getting prep myself for gmat study plan so its very hard for me to even get prep. I appreciate Christina to rise this issue. 

  • Joe Beckmann

    The real burdens of college debt are far more extreme than these median debt levels: waiters in restaurants with $120,000 of student loans, barbers who owe 80% of their first three years of salary for their license to earn that salary. And the rationale that universities give to “market” forces, blaming the rapacious for-profits for their own inflationary practices of higher tuition to afford higher subsidies for fewer – and less likely non-white – low income eligible students. When, for a classic example, the “net price indicator” (which EVERY ARTICLE about college debt should reference!) suggests that, for an “average Massachusetts applicant,” Amherst College, priced at $57,000/year, actually has a net cost of $5700, while UMass, in the same town, with some of even the same faculty, and cross listed courses with both Amherst, Smith, Hampshire and Mt. Holyoke, has a price of $25,000 and net costs $12,500.

    Those disparities are greater now than they were before Brown v. Board of Education. So much for our victories of the last century. And the disparities effect minorities even more grievously than any time since slavery was legal.

    These problems are not new; only their scale is new. The irony is that they affect the greatest capital asset in the country – dwarfing even the treasury – since that asset determines our long term economic, social, and cultural viability whereas money…can…move anyplace you can cash a check.

    And many of the obvious “solutions” are politically impossible: bonuses to colleges and schools with higher ratios of placement in jobs or grad schools, paid by those with higher failure rates; taxes on nonprofit universities to support higher subsidies to loan money; integrating online with blended with traditional instruction to realize the value of these media. Perhaps some of those benefits may accrue when edX, MITx, and their Stanford equivalent really get operating: it will be amusing to see if any college or high school refused to “give credit” to student achievements from Harvard, MIT or Stanford, even though those courses don’t award credit directly! We may yet achieve this transformation through these and other “subversive changes.”