STUDENT LOAN GROAN
ONE GRAD HIT WITH $1,300 A MONTH PARENTS PUT OFF RETIREMENT AVERAGE STUDENT DEBT IN MASS $29,000
Student loan debt has hit a crisis point in the Bay State and across the country — with graduates owing $29,000 on average here — and Attorney General Maura Healey says the college-rich Hub has a duty to lead the way out.
“What we're seeing and what we're hearing from people across the state is that they are just being crushed with student loan debt,” said Healey, who created a unit dedicated to helping students manage and contest debt. “Massachusetts is a place that has led the country in public education, and has a vibrant, growing economy. We need to be leading here.”
The share of graduates from public, four-year colleges in Massachusetts who have student loans increased from 54 percent in 2001 to 75 percent in 2014, according to the Massachusetts Budget and Policy Center.
The average student debt in the state, the center adds, has also grown 55 percent since 2001, from $18,782 to $29,038.
The debt load climbed even as the state has cut higher education spending by 15.3 percent since 2001 in inflation-adjusted dollars, according to the budget center reports. The cuts have come as tuition has steadily risen.
The local situation mirrors a national student debt crisis.
A study by Experian found that U.S. student loan debt has grown more than $833 billion in the past decade to an all-time high of $1.4 trillion. The firm found that 13.4 percent of U.S. consumers have one or more student loans, and that the average total student loan balance is $34,144.
The Herald reported yesterday that colleges are also struggling with declining enrollments and growing doubts about the value of a degree.
The number of Americans enrolled in college has dropped every year since 2011, to a low of 19.1 million in 2015, a full 1.2 million fewer students than in 2011. The slide came after years of steady increases, and as the college-aged population shrank.
Healey recently formed a working group with the Greater Boston
Chamber of Commerce to examine ways to reduce the cost of college, and offer more affordable options. The group will issue its recommendations soon, she said.
“I believe not only is (student loan debt) crushing families, but it’s going to have a real drain on our economy,” Healey told the Herald. “When you have that much debt, it impacts directly your ability to purchase more consumer goods, buy a home, contribute to the economy.”
Mamie Voight, vice president of policy research at the Institute for Higher Education Policy, said colleges and state legislatures need to step up their financial support for students, especially those from low- and middle-income backgrounds.
“The solutions lay at the federal level, state level and institutional level,” Voight said.
But state help for students has not kept pace with rising college costs.
Massachusetts students who attend public universities paid for roughly one-third of their higher education costs in 2001, and today pay well over half, according to the Massachusetts Budget and Policy Center.
A 2017 study of states’ support for students by the University of California at Berkeley found that while Massachusetts gives needbased aid to a greater number of local undergrads than the federal Pell Grant program does, it offers a relatively low amount per recipient, less than $1,000.
That pales in comparison to California ($8,000) and Washington ($7,000), though those states cover fewer students than Massachusetts does.
Christine Lindstrom of the Public Interest Research Group said public divestment in higher education was “sudden” as the Great Recession hit.
“We still have a long way to go to stabilize, and think about how colleges work and how much people should be paying,” Lindstrom said. “We’re in the midst of a market correction right now.”
This divestment is despite Massachusetts having the 10th-highest in-state tuition sticker price in the country. University of Massachusetts trustees recently voted to hike tuition across its four campuses by 3 percent, to an average tuition of $14,253 for in-state undergraduates.
Other states are taking action to aid students who are too deeply in debt.
New York, Oregon and Tennessee have passed laws making community college free, and Rhode Island recently approved “The Promise Scholarship,” doling out $2.8 million for the first year of a four-year pilot program that makes community college free starting this fall.
Healey said part of the problem is a lack of transparency in college award letters, which spell out how much a student is getting in financial aid and can expect to pay.
“These financial award letters can be downright confusing and really hard to compare,” Healey said. “Some of the forms we found didn’t even list the full cost of going to school.”
Healey said award letters at forprofit schools can be particularly opaque. Her office has prosecuted some for-profits for making false job placement and graduation rate claims.
Florida lawmakers this year passed a bill requiring schools that disburse state aid to provide annual reports to each student listing the total amount of loans the student has taken out, the total needed to pay off the loans, and what percentage of a borrowing limit the student has reached.