Editorial: Student debt increases warrant government action

by Daily Editorial Board

According a recent report by the University of Minnesota Government and Community Relations, a third of bachelor’s students graduate with approximately $16,000 of student debt, and nearly one fourth graduate with debt of approximately $35,000. The problem of student debt is pervasive in Minnesota. Over several years, University graduates were ranked as having high student debt.

There is obvious concern regarding these newly published statistics. However, there are important factors to take under consideration before being alarmed. First, it’s imperative to see whether the University is doing all that it can to provide the necessary aid to students that need financial relief. Financial aid is applied via government waivers and contributions like scholarships. The second consideration is whether students graduating from the University are placed into jobs and circumstances that easily allow them to eventually pay back this debt. 

We believe that the University is taking important steps to address financial needs. In a recent letter by President Eric Kaler in the Pioneer Press, he demonstrated his commitment to remain an affordable college campus for students, specifically for those with financial needs. The University, for example, offers a tuition waiver for families that have an annual income of below $50,000. The University claims that the number of students who rely on government-secured student loans is declining each year. Some may argue that tuition hikes are to blame for the problem of increased debt student debt, however, the University’s funding continues to shrink annually. In order to maintain a quality of education, it’s imperative the University compensate costs in some way. Hopefully, solutions will not often fall upon the shoulders of students.

Rising graduate debt also warrants an increased need for students to explore technical and community colleges. According to the Association of Community Colleges, average tuition at a two-year community college is more than 50 percent lower than the average in-state tuition for resident students. This lower cost helps to decrease the reliance on student loans, and allows students to gain the technical skills for a job that may not require a four-year degree. Rising tuition may call upon students to look into alternatives that were not previously needed.

The government must also do more to address student debt. Federal options to finance student loans must annually be expanded, revisited and re-evaluated, rather than leaving students to live on severely reduced funds, default or refinance loans privately. The federal and state governments could create specific budget allocations for scholarships to alleviate the pressures of mounting student debt. Furthermore, retroactively restructuring student loan policies would also have a definitive impact. Currently, repayments on student loans are static with time — the repayment on a student loan during college is the same when a student becomes a working professional. Countries like Australia have reformed their student debt policy to be a constant percentage of income, which responds to the fluctuations in job security students may have after graduation. This also allows for easy and automatic adjustments, making it so that students can pay a reasonable and fixed amount at any given time as a function of their income. 

It’s evident that student debt policy needs reform. The aforementioned statistics are clear indications of this need. However, what’s evident is that the sole responsibility does not fall on the University. The administration has shown its commitment to making college education affordable. Now, it’s time for several systems of government to do their part.