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Noreen Carrocci

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Hyperbole! Hyperbole!

Posted: 08/08/2012 11:28 am

Last week's The Economist headlined "The College-Cost Calamity," predicting a "hurricane" from the "bubble" created by higher education's rising long-term debt and student debt reaching a "record $1 trillion." Of course, there was the now common example of a graduate with a degree in religious and women's studies with $100,000 of debt. And Bob Hildreth of Families United in Educational Leadership blogged on these pages calling for "stress tests" for colleges to see how they would withstand a "student loan meltdown." He, too, repeats the average student debt load of $25,000 and a "national student loan default rate of 8.8 percent."

What is bothersome about both types of articles is the "one size fits all" rendering of U.S. higher education. Community colleges, four-year public, four-year private nonprofit, and two-to-four-year for-profit are all very different entities. Moreover, each sector has variety within it. For example, private four-year liberal arts colleges are different from private universities with masters programs as these are different from private research universities with doctoral programs. Each type of institution has its own realities to face, too. For example, the majority of states have reduced funding to public universities in recent years and that is the major cause of larger annual tuition increases than had occurred in the past. Meanwhile, private nonprofit colleges have worked hard to reduce costs for students and, as David Warren (President, National Association of Independent Colleges & Universities) reported in the Washington Post in June, net tuition at those institutions has actually dropped by 4.1 percent in the past five years.

Also, last week an extensive U.S. Senate report on for-profit colleges included some differentiated data that demonstrates stark contrasts. For example, the percent of students taking out loans is 13 for community colleges, 48 for public universities, 57 for private nonprofit and 96 for the for-profits. Student loan default rates from 2005-2008 are reported as averaging 8.4 percent overall, but are 4.2 percent for all private nonprofits, 7.1 percent for all publics, and 17.2 percent for for-profits.

I urge you to read a short and very cogent piece written by Justin Draeger, president of the National Association of Student Financial Aid Administrators, for the June 2012 issue of University Business. The article, "3 Dangerous Student Aid Myths," takes issue with the frequently reported -- but unsubstantiated -- claim that increases in student aid drive up college costs, that student loans are the next mortgage bubble, and that most students borrow way too much. Mr. Draeger references a report that 43 percent of borrowers take out between $1,000 and $10,000 and another 30 percent borrows between $10,000 and $25,000.

I am a first-generation college student whose father was a steel worker. There were no reserves for college in my family. When I graduated in 1975 I owed $10,000 in student loans (today that's the equivalent of $42,650). Repayment was deferred until I finished graduate school, and then I started making payments that lasted 10 years. It's the best investment I ever made. I've paid off loans for several cars since then, and none have provided the lasting benefits that my education continues to provide. I urge readers to be skeptical of hyperbolic statements about higher education. Families, do your research on the schools of interest to your sons and daughters and then explore all the ways those institutions work to make their programs affordable and accessible. As president of a Catholic, private nonprofit university, I can attest that we want students from all income levels to be able to attend Newman University or whatever institution seems the right "fit" for the student.

 
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