During the presidential campaign, much was said about the growing student debt crisis and the hope that debt forgiveness/reduction will soon become a reality. For those of us in higher education, it is a conversation we’ve long hoped the nation’s leaders would have as we edge toward a disastrous tipping point.
How big is the problem? As I write this, that astronomical amount of debt totals more than $1.7 trillion (this doesn’t include more than $120 billion in private student loans). That’s more than any other kind of financial obligation except mortgages. Frankly, if we don’t do something about this “overhang” — which kills social mobility by keeping students and graduates from prospering and contributing to their communities — we could face an economic and educational disaster.
Here at home, Cal State Long Beach students, parents and graduates are significantly challenged each year by costs associated with their college education. Even though we are one of the nation’s more affordable universities, our students are hit hard by the region’s high cost of living; many are first-generation and from lesser economic means; and a significant number of them work at least at one job (sometimes several) in order to make ends meet. We educate more than 9,000 students who receive no economic support from their families. Given the communities we serve, even debt that’s widely thought of as “nominal” can feel and be insurmountable.
The underlying mission of the California State University system — and, of course, our campus — is to provide an accessible, affordable, high-quality education. And for the most part, the majority of our students are able to graduate with one of the lowest debt levels in the nation because of federal Pell grants; state support and grants; and the support of foundations, corporations and private donors.
While we tout a historically lower-than-average debt among our grads, too many are forced to deal with a stifling burden long after receiving their diplomas. Typically, in discussions over student debt, people tend to think of the challenges that graduate and professional students face, many leaving their respective universities with debts sometimes exceeding $100,000 or even $200,000.
At The Beach, where approximately 71% undergraduate students receive some form of financial aid, we are ranked fifth on the West Coast and 11th nationally when it comes to students “graduating with the least amount of student debt.” In addition, a recent report showed that 57% of CSULB students graduate with no student debt, and the average amount of debt for the other 43% is about $18,400. (I am also delighted to note that the rate of repayment among our graduates is phenomenal 98.4%.)
That said, in our high cost of living region, even a debt of $15,000 or $20,000 can slow the economic mobility of graduates and lessen their positive impact on the communities they live and work in. Student debt has negative personal and community effects.
Continued state and federal support for student aid, as well as an effort to find solutions to this crisis is paramount — the potential for economic adversity as a result of the crisis looms over all of us. It’s been clearly demonstrated that student debt negatively impacts the housing market (student loan debt delays homeownership for borrowers, which, in turn, affects supply and demand); and it appears to reduce the use of consumer credit (hitting financial institutions and lenders, which puts a drag on businesses growth). These two sectors, alone, account for a vital portion of our economy.
At Cal State Long Beach, robust state and federal funding for student aid is about more than helping to discharge student debt: it’s also about investing in the well-being of our communities. On average, holders of college degrees purchase more in the way of goods and services, pay more taxes, are less likely to need public assistance or to go to prison, and lead healthier lives (thus reducing demands on a variety of public services).
As it stands, the student debt crisis not only keeps fellow Americans from achieving their goals, but it also serves to hamstring social mobility, innovation and investment in the public good. In America, we’ve understood that “education is a great equalizer,” and at The Beach, we have taken substantive steps to make outcome an affordable possibility for our students. For the sake of our university, California and the nation, it is vital that we invest in our students and the long-term well-being of their communities by addressing the issue of debt through meaningful federal and state financial support.