UT report: Re­duce debt with fo­cus on grad­u­a­tion

Aim at those at risk of not get­ting de­grees, it sug­gests.

Austin American-Statesman - - COMMUNITY NEWS - By Ralph K.M. Haurwitz rhau­r­witz@states­man.com STU­DENT LOAN DEBT BY THE NUM­BERS $26,200 Over80% Con­tact Ralph K.M. Haurwitz at 445-3604.

Soar­ing stu­dent loan debt could be re­duced by re­quir­ing stu­dents to pre­pare a kind of busi­ness plan for their col­lege years, pro­vid­ing more on­cam­pus work op­por­tu­ni­ties and adopt­ing other mea­sures aimed at those most at risk of not com­plet­ing their de­grees, ac­cord­ing to a new report by a Univer­sity of Texas Sys­tem task force.

The report by a 14mem­ber panel of ad­min- is­tra­tors, stu­dents and fi­nan­cial aid spe­cial­ists said such rec­om­men­da­tions could be use­ful not only in Texas but na­tion­wide.

Stu­dent loan debt stands at $870 bil­lion, more than the na­tion­wide out­stand­ing bal­ance on auto loans ($730 bil­lion) and credit cards ($693 bil­lion), the report said. Nearly 20 per­cent of stu­dents who bor­row wind up de­fault­ing on loan pay­ments.

“Debt is a tool. It has a place like any in­vest­ment,” Scott Kel­ley, the UT Sys­tem’s ex­ec­u­tive vice chan­cel­lor for busi­ness af­fairs, said Wed­nes­day. $870 bil­lion — To­tal na­tion­wide stu­dent loan debt 37 mil­lion — Num­ber of bor­row­ers 2 out of 3 — Col­lege se­niors who grad­u­ated in 2011 with debt — Av­er­age debt

— Of bor­row­ers de­fault­ing on loans, those who did not earn a de­gree Source: Col­lege“Credit”: Re­duc­ing Un­man­age­able Stu­dent Debt and Max­i­miz­ing Re­turn on Ed­u­ca­tion

But debt can also be a de­bil­i­tat­ing bur­den, es­pe­cially for stu­dents who do not earn a de­gree and there­fore miss out on the ex­tra earn­ings gen­er­ally con­ferred by that cre­den­tial, said Kel­ley, who led the panel and is sched­uled to present the report at a UT Sys­tem Board of Re­gents meet­ing in Austin on Thurs­day.

The report notes that, of bor­row­ers who de­fault, more than 80 per­cent failed to com­plete a de­gree.

“Thus, while the stu­dent loan debt cri­sis is a com­pli­cated is­sue, the data sug­gest that the most im­pact­ful way to re­duce un­man­age­able debt would be to in­crease the per­cent­age of bor­row­ers who com­plete their post­sec­ondary de­gree,” the report says. “Hence, the chal­lenge is to find new and ef­fec­tive ways to in­crease grad­u­a­tion rates and com­ple­tion of de­gree pro­grams.”

Among the report’s rec­om­men­da­tions:

Have stu­dents pre­pare a “per­sonal ed­u­ca­tion plan,” de­tail­ing costs and aca­demic goals to keep them on track.

Ex­pand work-study pro­grams and other on­cam­pus stu­dent em­ploy­ment be­cause stud­ies show such stu­dents have higher grad­u­a­tion rates than stu­dents who work off-cam­pus.

Step up aca­demic and fi­nan­cial aid ad­vis­ing, es­pe­cially for stu­dents who seem to be at risk of not com­plet­ing their stud­ies.

En­cour­age schools to come up with ways of cut­ting costs for stu­dents — for ex­am­ple, by of­fer­ing no-frills cam­pus hous­ing

Kel­ley said sys­tem staff mem­bers would pro­pose spe­cific projects at a later date, in­clud­ing a pi­lot project to mea­sure the ben­e­fits of pre­par­ing a per­sonal ed­u­ca­tion plan.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.