Using data collected from WalletHub, today Stacker released its student loan debt rankings by state. Michigan ranked 9th overall, meaning that our college students carry much more student debt than average. According to the data, college students in Michigan have the fifth-highest student-loan-debt to income ratio. This is one more reason we need to embrace a free college approach in Washtenaw County.
High student loan debt reflects the students’ cost-of attendance. It’s no coincidence that Pennsylvania – which is currently battling a horrific higher education funding crisis – ranks second overall in student loan debt. Transferring operating cost increases to the students will only get you so far. At some point, students will start comparing the cost of going to school with its potential return-on-investment.
There are many creative ways to make community college “free” for students. Community colleges and systems have successfully used donated funding, grants, state funding, local taxation, etc., to mass fund two-year degrees.
The fact that Michigan lands in the top 20% in terms of student loan debt means that our students struggle to pay for their college costs. While federal loans are widely available, the current federal interest rate on student loans is more than 4.5%. A 10-year mortgage has the same payback period as a standard student loan. Today’s mortgage interest rate for a 10-year loan is 2.5%. Today’s students would pay a lower interest rate on a mortgage than they would on a college diploma.
Free college offers an escape from poverty
Keeping college free is essential for the students who live in poverty. A free college education means starting out debt-free. It brings them to their full economic potential faster, and gives them the opportunity to begin to amass wealth soon after entering the workforce.
In addition to benefiting the students, the free college approach can increase enrollment and provide steady enrollment, even when the economy is in flux. For students in technical programs, free college means that they can enter the workforce soon after graduation and begin earning.
Free college is less of a radical idea than it is another way to support the community college. When prospective students know that they have the resources to start and complete a degree program, they’re more likely to enroll. If, on the other hand, they believe that going to school means taking on an unknown amount of debt, they may decide to skip a college education altogether.
The WCC Trustees should focus on finding ways to reduce or eliminate the cost of attendance for as many local students as possible.
Photo Credit: Backbone Campaign , via Flickr