Danger in higher education is taking on debt

Published 12:00 am Sunday, April 11, 2010

For 12 of the past 14 years, tuition has been raised, substantially, at Mississippi’s eight public universities. Increases are already approved for this fall and next fall that will increase the four-year tuition-only expense of a bachelor’s degree from a system average of $19,128 to $21,836. Community colleges, separately governed, have imposed similar increases. A student who paid $3,060 for two 18-hour semesters this year will pay $3,600 for the same course load this fall and next spring.

Now consider this: Enrollment and graduation rates continue to rise.

Clearly, the managers of higher education have not priced themselves out of the market.

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Interviewed in Vicksburg last week, Commissioner of Higher Education Dr. Hank Bounds didn’t have a direct answer to growth trend overall, but did point out that college enrollments always rise when the job market is tight. He also emphasized, accurately, that there will never be such a thing as too much educational opportunity in Mississippi, which, compared to other states, has fewer college graduates as a percentage of its population.

Tuition is a relatively minuscule part of the college expense picture. There are fees, textbooks that can easily cost more than $100 each, dorm or apartment rentals and much more, including food, clothing and travel costs.

To some degree, new federal legislation is offsetting these expenses for some students and families, but also creating more economic peril for others.

The federal Pell program has seen explosive growth and will see more. Once limited to people in serious poverty, the college grants, which do not have to be repaid, are to be available to households with up to $50,000 in income. Even under the lower benchmarks now in place, Pell eligibility ranges from 18 percent of students at Ole Miss to 79 percent at Mississippi Valley. The average award, now about $3,100, will be capped at $5,500 for the next few years and then tied to the Consumer Price Index. Also, students may remain under their parents’ health insurance plans even after graduation.

The real danger is the increasing debt with which students are graduating. Although future student loan repayment rates will be capped at a percentage of income, interest will continue to accrue. Today, students who are borrowing are doing so at the rates ranging from $3,116 per year at Ole Miss to $5,971 at Valley. A Valley grad who obtains a bachelor’s degree and becomes a teacher could still be paying on students loans as he or she approaches retirement.

The word “unsustainable” is popular to describe situations that seem OK today, but where disaster looms. The expense aspect of higher education and how it is financed is “unsustainable” in Mississippi.

By whatever means necessary, students would be well-advised to graduate as debt-free as possible. Those who don’t have a long uphill climb.