The Free Press, Mankato, MN

November 12, 2012

Our View: Debt can wipe out higher ed’s benefits

The Free Press

— A story in Sunday’s Free Press by Amanda Dyslin offers a sobering overview of the often life-long consequences of college students amassing too much debt.

Minnesota graduates have the third-highest amount of debt in the U.S.

Among public schools in the state, Minnesota State University had the third-highest student-debt load — $29,415 — which is greater than the University of Minnesota Twin Cities, where tuition is 40 percent higher.

 Winona State University grads carried the most debt at $31,275, followed by the University of Minnesota  Duluth ($31,168).

MSU officials say that without more research they can’t specify the reasons for the discrepancy. It could be more MSU students come from households with lower incomes and qualify for more federal government loans or that MSU students take longer to graduate.

The university should delve deeper for answers to help them develop strategies. If, for example, students are taking longer than average to graduate, MSU should focus more heavily on changing that trend.

But heavy student debt load is nothing unique to MSU. Rising college costs and tough financial times for families have meant students are turning more to federal loans and to higher-interest private loans.

The problem is worsened by the reality that the recession has left fewer good jobs for new graduates and has led to higher default rates on loans.   

MSU and other colleges do provide loan counseling to students, but it would be helpful if the process were more intense, giving students and their parents a deeper understanding of how much debt students are likely to incur and how it will affect their post-graduate life.

It would be helpful to have prospective students and their parents do a sample worksheet looking at what a student’s expenses will be in the next two years, how much  is likely to needed in loans, what the eventual cost of a 20-year loan will be, and what kind of salary will be neededto handle repayment of the loans.

Parents and students also need to take a realistic look at college plans. No one disputes the need for advance education beyond high school to compete in today’s world. But one- or two-year vocational training may be as useful and more cost-effective for many. And students need to look critically at the potential job placement rates for majors they are considering.

For many high school graduates, some time off before college — earning and saving money, or working in AmeriCorps or the military — may be beneficial. 

And most students attending college need to combine work with school. While the economy is still slow, part-time jobs are available.

Higher education is still likely to be the best investment students ever make. But doing everything possible to manage the long-term cost of that investment is imperative.