D-E-B-T and Higher Education

Andrew Martin and Andrew Lehman have a front page story in Sunday’s New York Times: A Generation Hobbled by Debt. http://mobile.nytimes.com/article?a=949832&f=19 The top of the fold color picture features Kelsey Griffith, age 23, in debt $120,000 from her college loans, now working two restaurant jobs. She’s about ready to move back in with her parents. Her mom co-signed her loans. Kelsey is one of five sisters. The article doesn’t say whether she is the oldest or the first to attend college, but I imagine so. It’s impossible for anyone to read the story and not ask: What the heck was she thinking? Maybe more importantly, what the heck were her parents thinking? Martin and Lehman actually don’t ask those questions. Instead, their question boils down to this: what the heck was Ohio Northern thinking when they allowed her to attend?

The story is full of good information:

–The percent of students who have to borrow to attend college has doubled in 20 years.

–The average debt was $23,000. Less than 3% of the students borrowed as much money as Kelsey. 10% borrow $50,000.

–11% of students attend for-profit colleges, yet they receive 25% of the federal grants and loans. The rate of default on those loans is twice those who attend non-profit institutions and their rate of graduation is about a third of private non-profits.

–State and local funding of higher education has reached a 25-year low, adjusted for inflation, down 24% nationally.

–The cost of a public degree has gone up 72% in ten years; for a private non-profit degree, up 29%.

I’ve written about most of this before. The trend is unmistakable and unsustainable. I’ve also written that while funding for education has declined, those same dollars have gone to building residence halls for those we choose to incarcerate and for guards to staff them. I don’t quarrel with much in the article, except the proclivity to feature the extreme case like Kelsey’s. She represents one in a hundred, but the story focuses on her and others like her. It makes for good reading, I suppose, but I’d have preferred a focus on the more typical student with a more typical debt burden. That story ought to be compelling enough. As President of a private liberal arts college, I see young people like that every day, graduating with something like $20,000 of debt after four years. I had a young woman from Florida come see me the other week. She had finished her first year and had excelled in and out of class. She loves Oglethorpe and has made a difference here, but her mother had to take out a $10,000 loan for her to complete just one year. She knew that was not sustainable and I told her the same thing. I also asked nine trustees to join me and personally cover a substantial portion of her tuition next year, on top of the generous financial aid she was being awarded. Personally. Every one said yes. But even though she gets up at four every morning to work her shift at the nearby Starbucks, that will only help her complete year two. She very well may have to transfer to a less costly school a year from now. If that is what happens, I will know that she has two great years under her belt of an exceptional education. No one can ever take that away from her.

What I would like to share here is a little sense of what it takes to provide that kind of education. I hope when you are through reading this, you will understand that at least one school (and trust me, in this regard, there are hundreds and hundreds more like us) does everything it can to hold its costs down. I’ve been President since 2005, finishing year seven. I think in two of those years, we were able to provide a cost-of-living increase to faculty and staff and even then, it was only one or two percent. One year, we had to cut everyone’s pay and stop contributing anything to their pension plan. A full-time faculty member with a Ph.D. who was chosen from over 300 applicants made all of $50,000 his first year. Our staff is tiny; everyone is doing two or three jobs. We provide $15 million dollars a year in financial aid, on a budget of about $37 million. And with these limited resources, we are among the best liberal arts colleges in the country and provide our students an exceptionally rigorous education. At commencement this past weekend, while not every student had a job lined up, many did and many others are headed off to the finest gradate programs in the world. Our typical student pays $1650 a month for this kind of education. I’d be hard-pressed to suggest a better investment. If they want to live on campus and eat 20 meals a week, they will pay about $1100 a month. Trust me, that’s not bad for living in Atlanta.

It’s true that Oglethorpe is one of the less expensive private options. Some other schools I know cost three or four times what we do. I’ve explained to thousands of families that Oglethorpe is every bit as good a choice as one of the higher priced options. Some listen; others make a different decision. If money is the overriding concern, I share with them that they ought to consider a lower-priced school, at least for the first two years. We have also created a viable option for well-prepared students to complete in three years. One of the great things about higher education in this country is its diversity. Until the last couple decades, I’d also have said our public policy was designed to provide access to that diversity of schools for the less financially able. I can’t say that anymore. Instead, we have consistently and deliberately acted to limit access and deny opportunity and that’s shameful.

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One Response to D-E-B-T and Higher Education

  1. Bill Aitken '64 says:

    Oglethorpe is not part of the problem, it is part of a solution that other institutions need to buy into.
    ONE major part of the problem is (as you mentioned above) the explosion of FOR-PROFIT EDUCATIONAL INSTITUTIONS. They get their money (profits), and the students (and all of us, ultimately) get the loan debt. How do you feel about individually supporting (through your taxes) the profits of these so-called ‘institutions of higher learning’? Makes you all proud and fuzzy-feeling inside, doesn’t it!

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