Is this simple solution key to fixing the student debt crisis?

A key pivot during the pandemic could provide an efficient way for higher education to be more affordable.
By: | August 26, 2022
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There were sighs of relief and a lot of other sighs when President Joe Biden announced the cancellation of billions of dollars in student loan debt on Wednesday. Despite the transformative help it will provide for 43 million borrowers, including $20,000 in relief for Pell Grant recipients, questions remain for future generations about their ability to pay for expensive colleges and universities.

That is because, as Biden noted, tuition and fees have tripled over the past four decades. Wages have not kept pace, leaving students with staggering amounts of debt – to the tune of $1.75 trillion. The average borrowers owe more than three times the $10,000 in relief they might get through the program, estimated to cost some $330 billion. For those that had loans paused again, and who won’t have that luxury by January, only 14% will be able to make payments, according to a new report released by credit score product ScoreSense.

So with return on investment very much front of mind for students and families weighing the cost of postsecondary education – and colleges now squarely in the crosshairs from detractors that want adjustments be made – how can institutions be what they were 40 years ago: affordable?

There have been many softballs lobbed on the subject, from doubling the Pell Grant to reducing tuition and fees to putting the onus on policymakers to just pay out more. But there is one development, fueled greatly by the COVID-19 pandemic, that may provide a sliver of opportunity. It is the continued emergence of online learning and access to better, quicker and career-focused curricula.

“The higher education industry needs to become more responsive to the needs of the modern learner,” Amrit Ahluwalia, director of strategic insights at Modern Campus, said. “This means looking at programming to ensure it leads to good jobs and creating more diverse pathways for students to earn credentials that doesn’t necessarily require four years or tens of thousands of dollars.”

The controversial subject brings its own issues in terms of value and a further breakdown of face-to-face residential campus structures, but there are plenty of examples of success, including Arizona State University’s ASU Online, Western Governors University and Southern New Hampshire University. While a fully remote experience might not be best for all students, bringing more of that model or more stackable credentials and open educational resources to traditional institutions could be helpful.

“Students are voting with their feet and finding alternatives to traditional higher education,” Ahluwalia said. “There are 1.4 million fewer students enrolled in degree programs today than there were in 2019. However, enrollments in coding boot camps and non-degree job training programs has grown exponentially through the same period. The modern student is a consumer, first and foremost. They prioritize return on investment when it comes to postsecondary education and are primarily looking for programs—whether they’re offered by traditional colleges/universities or by alternative providers—that will help them achieve their career goals.”

What needs to be done

As Ahluwalia suggests, four-year options aren’t the only paths, although interest in highly selective institutions has never been greater, showing that a college degree still possesses serious marketability. However, he says giving an influx of notoriety and capital to two-year institutions, an idea that got torched when Biden’s original Build Back Better plan fizzled, would be a great start, providing a strong, cost-effective access point for millions of students.

“We need to do a better job of highlighting and celebrating the community college system that exists in every county across the United States,” he said. “These high-quality institutions can get students halfway toward a bachelor’s degree—and in some cases all the way to a bachelor’s degree—at incredibly affordable rates. The more we can do to highlight the diversity and flexibility of the education ecosystem for students, the better.”


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Rising tuition, the long-lasting pandemic and inflation all have made four-year college paths more challenging. A lack of state and federal funding (aside from recent emergency grants) hasn’t helped, and the reliance on financial aid has only fueled rises in tuition, according to many studies. But Ahluwalia said there is more to it than that, hinting that spending at many institutions has gone off the rails, not really meshing with the desires of students.

“Public supports for education access have disappeared over the last 40 years, making students largely responsible for paying for higher education,” Ahluwalia said. “Second, many universities entered into an arms race through the 1990s and 2000s, making massive capital investments in luxurious campus amenities. However, the majority of students enrolling in higher education today (and since the mid-2000s) are considered “non-traditional”, which means they’re adults, they’re working multiple jobs, and have dependents. These individuals know they need a postsecondary credential to achieve their career goals, but don’t actually use campus amenities in the same way… even though they’re footing the bill.”

Despite olive branches being extended temporarily on student fees and textbooks, for example, those bills continue to go up and the wiping away of current debt only extends so far.

“Students with existing loan debt will be eternally grateful, but it’s worth noting the average student is carrying a loan debt of $39,000,” he said. “So, for many former students, the debt forgiveness will be a start, but they’ll still be in a hole. Compound that with the fact that many college graduates tend to be underemployed in their first job out of college—creating a challenging career trajectory—and it becomes clear that debt forgiveness in and of itself doesn’t address higher education’s core problem.”