Every article I’ve read on the student loan debate seems to be missing one very crucial, simple way to completely eliminate student loan debt. It’s so painfully obvious that it flabbergasts me that no one, I mean no one, has pointed this out.
Many ideas are put forward. Lower tuition. Let students discharge their student loans in bankruptcy. Offer more Pell Grants, don't cut them. Limit the amount of aid that goes to for-profit colleges. Push for more disclosure of student loans and the cost of college.
None of those are the best solution to this problem. The real answer is simple and unpopular. It lies not with Congress, or the president, or the colleges and universities, but with the students. Students have to stop borrowing money to pay for college.
I know what you are thinking: “What, they can’t do that!” “How do you expect them to pay for school!” “That’s impossible!” “Colleges are too expensive!” I know there is a lot of emotional reaction to this statement, mainly because it flies in the face of popular wisdom, which is, “Borrow money now, focus on school, pay the money back after you finish school, when you may, or may not, be earning a higher salary.” We are borrowing on anticipated future earnings, or “leveraging,” as it might be called.
But I think we’ve forgotten a basic rule of economics: If you can’t pay for it, don’t buy it. Go to a school that you can afford.
Students have options. They can go to community college at a relatively low cost for two years, then go to a four-year school after that. They can work full-time and take online courses at cheap universities that are making education affordable and that will not accept federal financial aid, not because they are not accredited, but because they want you to graduate debt-free, at schools like New Charter University, or even tuition-free universities like University of the People. It’s not Plan A, per se, but it is doable. It’s not the freshman college experience, but it is a path to graduating debt-free.
Isn’t this how education is supposed to be? Work gives you the practical, real-world experience, and adding the educational understanding helps create a holistic learning approach. Three-quarters of college students juggle families, jobs and school.
The debate is not, should lower or increase interest rates? The “debate” should be about students taking a tough stand, for themselves, for their future, for the next generation’s future -- saying no to student loan debt.
Don’t get me wrong. Colleges and universities across America need to do everything possible to lower the cost of tuition. Absolutely. But do college students need to choose schools that are more affordable for them? Absolutely.
I know this is unpopular, but so have been many things in history that go against the grain. Thomas Paine, one of our nation’s founding fathers, stated, “Perhaps the sentiments contained … are not yet sufficiently fashionable to procure them general favor; a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first, a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason.”
Aaron Broadus is a financial literacy counselor at the University of Missouri-Kansas City School of Medicine.
As housing prices rose for some working- and middle-class American families, so did college ambitions of their students, study finds. Which leads to the obvious question: Are those ambitions now dropping as home values fall?
By now you probably have read in the news that, according to the Bay Area News Group in San Francisco, an average Harvard University education for a family earning $130,000 annually is less expensive than a California State University education.
As an individual who spends a great deal of time delving into the world of higher education finance, I feel compelled to clarify this very misleading report. The published report stated that due to Harvard’s vast $30-plus billion endowment and substantial tuition discounting practices, a student from a family earning an average of $130,000 per year would pay only $17,000 to attend Harvard, not the listed tuition cost of $36,300. This was compared to the overall cost of a Cal State education, which was listed in the report at $24,000 per year, and to a University of California education, listed at $33,000 annually.
Now for the facts. Despite the fact that we have had to rapidly increase Cal State tuition fees due to unprecedented state legislative budget reductions in previous years, Cal State and CSU-Long Beach remain among the most affordable universities in the nation.
At Long Beach, for example, students in 2011-12 paid $6,240 annually (Cal State average: $6,519) for Cal State system and campus-based tuition fees, plus an additional $10,658 for full campus-based room and board. This means that a full year at CSULB (with room and board) for a student from a family earning $130,000 annually actually costs $16,898 as opposed to the reported $24,000.
Furthermore, when comparing the cost of two different universities, it is common practice to compare tuition and fees of one campus to the tuition and fees of another campus and not to include the additional cost of room and board for only one of the institutions in the report. In fact, in making the basic assumption that a Harvard student also has to eat and sleep and therefore pay room and board, as does a CSU resident student, Harvard’s full price jumps to over $56,000 -- not the $36,300 listed in the report and published in newspapers throughout California.
Additionally, according to recent Delta Cost Study data, when assessing the average tuition and fees, excluding room and board, collected by both Harvard and CSU campuses for students from all family incomes, CSU institutions actually collect around $5,000 for educational purposes while Harvard collects over $20,000 per student -- despite having the world’s largest university endowment of $30 billion.
Finally, do not fall victim to misleading and inaccurate reports regarding actual college and university costs. For students and families making difficult college and university cost comparisons, it is important to find out what the average family pays to attend, the “net tuition” charged per family. It is also important to find out the average student debt load upon graduation and the percentage of students graduating in debt.
As a national leader in making this information available, CSULB and the entire CSU have developed websites as part of our College Portrait and “Public Good” pages where this information can be viewed by all prospective students and families. The CSU and CSULB are proud to be among the nation’s best in having the lowest student loan indebtedness upon graduation, and we hope that all Californians will invest in our students to keep it that way.
Good information in the hands of all consumers will prevent them from falling victim to sensational headlines that have more power to mislead than to educate.
F. King Alexander is president of California State University at Long Beach.