Last Saturday, hundreds of students graduated from Lansing Community College. It was a time for celebration, but many of them are already in debt. Some will go on to four-year universities, where they’ll probably have to borrow a lot more money.
The average graduate in Michigan has $24,000 in student loan debt. That’s a bubble that’s about to burst, says the LCC Dean of Student Services. Dr. Evan Montague has written on the subject for the online magazine Bridge. He told WKAR’s Gretchen Millich that students must start planning ahead to cut down on the cost of a college degree.
DR. EVAN MONTAGUE: Student loans are very easy to obtain. They’ve become the largest single funding source in higher education, and they’ve just ballooned. With escalating cost in higher education, and at the same time declining state and federal support in education, we’re going to hit a precipice here sometime soon. Much like the mortgage industry, there’s concern that at some point in time we’re going to hit that bubble point with student loans. It’s going to leave a generation behind in terms of being able to do the things that their parents were able to do, such as purchase homes, and invest for their children’s education. So, many people are concerned about the future in terms of the well-being and economic success of graduates.
GRETCHEN MILLICH: It’s kind of a Catch 22 for young people who want to go to college. It’s good for the economy. It’s good for them. The can go on and have a successful career. But most people do need to borrow money because the cost is so high. How do they deal with that Catch 22?
MONTAGUE: You’re right. Continuing education and training is the magic ticket, and we need to increase the higher education attainment levels in the state. At the same time, there are different ways to pursue that, such as borrowing wisely when a student’s in school, using the summer for internships and work-based opportunities to try to have additional income and resources, and working while they go to school. A lot of our students are work-study students, so they work while they are going to school. Some are working with colleges and universities to set up payment plans and options. At LCC, we have a payment plan for our students that stretches their payments out throughout the semester, hopefully reducing reliance on student loans. I think the worst thing that we can get into is potentially over-borrowing, when the student comes to the reality after graduating that they have to repay that debt.
MILLICH: I hear students say that when they apply to colleges, colleges sometimes tell them not to worry about the debt. Just think about the end result. This is an investment in yourself. How can we change that culture? Because obviously, universities are in a bit of a double bind, too. They have costs, and they want students. How do they attract people and at the same time be honest about what the debt could be?
MONTAGUE: I think it is a balancing act, to figure out the best course for an individual to pursue. When I think about that investment, it needs to be a wise investment. I think this is a huge tension right now in higher education. What career path am I going into? At the same time, higher education is a point of discovery and challenge and trying to figure out that path in itself. I think it’ s incumbent on us in higher education to teach the core skill sets, the analytical skill sets, critical thinking, and communication skills that position students for success. That’s part of the equation. There are often things that are left to the end of a student’s undergraduate experience, like internships and work-based experiences that will help them solidify their choice and may help them find scholarship or employment-based opportunities while they are in school to help balance some of those expenses. From a federal perspective and also from the state level, we’re hearing a lot more, and a lot more funding streams will be tied to outcomes in the future. We’re reporting more data than ever before to the U.S. Department of Education about gainful employment programs, programs that show employment rates, as well as the student borrowing rates, to show the ability to repay a debt. Colleges and universities across the country are now putting more disclosures on all of their websites, based on U.S. Department of Education criteria at really getting at the true cost of an education, as well as the outcomes.