Student Debt: How States Are Working to Ease the Crisis On Their Own


Think globally, act locally.

The familiar slogan of the environmental movement may be an appropriate one for what is emerging as one of the biggest issues of the 2016 presidential election race: the quest to make college education affordable

Parents are facing the ugly reality that they can save either for their own retirement or cover their children’s post-secondary education – but not both. The alternative? That child takes out loans to cover tuition and living expenses, graduating with so much debt that it’s actually beginning to alter the entire shape of our national economy.

Hillary Clinton, as we learned this month, has a plan: a big, fat, $350bn, 10-year plan to make college more affordable. Predictably, her detailed proposal – which followed a pledge by Democratic rival Bernie Sanders to make all four-year public colleges and universities tuition free, and one by another of her fellow candidates, former Maryland governor Martin O’Malley, to cut tuition and link repayments to income – drew plaudits from many fellow Democrats.

Predictably enough, it also drew furious opposition from Republicans.

But as the party lines are drawn, and politicians squabble over the pros and cons of such an ambitious federal proposal, it’s worth pondering the fact that many states – and even individual institutions – aren’t waiting meekly on the sidelines for the federal government to lead the way. They’re well aware of what the issues are, and are busy creating a wide and varied array of programs and ideas designed to address just this issue: how to give as many students as possible access to as high a quality of education as possible, with as little financial burden to them and their families.

Consider Rhode Island, where newly elected governor Gina Raimondo’s 2016 budget included two programs designed to do expressly that. One is a $10m program (financed by eliminating an old and redundant bureaucracy) to provide last-dollar scholarships for students with proven academic track records, for whom the only obstacle to attending college is the gap between the amount of student aid they can line up and the real cost of their program. 

Then there’s an even more innovative program that is designed to help both college grads deal with their student debt and the state’s own ongoing economic woes. The Rhode Island Wave Maker Fellowships will pay off up to $6,000 a year, for four years, of college loans for students who pursue careers in technology, engineering, design and other sectors in the state. While 70% of the $1.75m program is earmarked for graduates of Rhode Island institutions, the remainder is available to students from other states who relocate to the state, joining a company based there or starting their own business.

The Wave Maker plan is modeled on similar programs in New Hampshire and Maine. David Bergeron, a senior fellow at the Center for American Progress, notes that these “interesting models” have been “reasonably effective in retaining graduates” as well as in helping them pay down student debt. 

But Bergeron reserves his greatest enthusiasm for a state model that he didn’t think much of when it was first announced: the so-called Tennessee Promise, a program that enables any Tennessee high school graduate to attend a community college or college of applied technology tuition-free. 

“You don’t see the economic bump from an associate’s degree that you get from a bachelor’s degree,” Bergeron points out. But he has been stunned by the rate at which Tennessee students have swarmed to take up the offer, as colleges have had to hire new faculty and instructors to deal with the demand from thousands of first-generation college students.

Meanwhile, although Barack Obama’s own ambitious (but top-down) plan to make community college free to students nationwide is stuck in limbo, other state policymakers are visiting Tennessee to see what it’s doing, and Oregon already has initiated a similar plan

States that have financial resources are in an ideal position, of course. North Dakota, for instance, has shown itself both able and willing to channel the financial windfall from the fracking boom into spending on higher education.

The result? A 61% jump in spending on colleges and universities between 2008 and 2014, a time period in which 48 out of the 50 states in the US saw declines in college spending. 

“They realized that if they didn’t reinvest the oil and gas revenues, that when it went away, it would leave them flat,” says Bergeron. “When you invest in your employees – in people – you get a six or sevenfold increase in productivity.” In contrast, investing in assets typically boosts productivity only twofold, he notes. 

Smart policymakers look at education not just as helping families, Bergeron notes, but as helping their economies. “It’s a public good.”

But even institutions are trying to find ways to limit the financial burden and increase access to degree programs for students. Starbucks employees (excuse me, “partners”) who meet eligibility criteria can take online courses toward degree programs at Arizona State University. 

Clark State Community College in Ohio recently began offering tuition discountsto students who maintained a C average and completed a certain number of credit hours; moreover, students who want to move on to study at four-year institutions can do so more easily, thanks to agreements that Clark State has reached with Wittenberg and Urbana universities. That kind of “stackable credit” also is a feature of institutions in the state of Washington, says Bergeron.

If you’re looking for big, ambitious, headline-grabbing proposals in cutting college tuition costs, by all means keep your eyes on the presidential candidates and their rhetoric. But if you’re curious about on-the-ground reform initiatives that are making differences in the lives of students heading back to the classroom in the coming weeks, you may want to look closer to home.

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