With 59.78 percent of college students in the nationwide Class of 2016 graduating in debt, student loans and rising tuition costs have become a source of grave uncertainty for young people navigating the prospect of stagnant wages and a volatile labor market. While 4 in 10 Americans believe the Trump administration should forgive all 1.4 trillion dollars of federal student debt, 18 to 29 year-olds are more than twice as likely to favor loan forgiveness programs than those 50-years and older. Unsurprisingly, the economic burden of student loans has also intensified for today’s students. According to the New York Federal Reserve Bank, student loan debt has increased by over 450 percent since 2003, with new student borrowing more than quadrupling in the past twenty years.
LendEDU, a private organization founded in 2014 that offers financial products to help students manage, refinance, and consolidate their loans, released their second annual Student Loan Debt Report late last month. The report is one of the most comprehensive studies on the status of student loan debt in the United States. For the Class of 2016 overall, the average debt per borrower nationwide was $27,975, a 1.5 percent decrease from 2015. The cost of student loans is an especially critical issue in Wesleyan’s home state of Connecticut, which placed first in LendEDU’s 2015 report as the state with the highest average debt per student borrower at $36,864.
LendEDU is the first organization to release data licensed from Peterson’s annual financial aid survey on the Class of 2016. All data on student debt was self-reported by 1,161 four-year public and private non-profit institutions. Colleges and universities who participated included information on the average debt per graduate, the proportion of graduates with student loan debt, their number of bachelor degree recipients in 2016, and the number of student loan borrowers from the Class of 2016.
While colleges and universities in Connecticut have managed to cut their debt per student by an impressive 12.31 percent since 2015 (North Dakota and Rhode Island were the only states with a steeper decline), the state ranks fourth in highest debt per student borrower in LendEDU’s 2016 state rankings. 60 percent of graduates from Connecticut public and private institutions leave school with student debt at an average of $32,326 per borrower. Only students in Pennsylvania, New Hampshire, and Delaware graduate with higher levels of debt.
LendEDU also released data specific to Wesleyan, where debates over affordability and managing student debt have been prevalent during President Roth’s tenure. In the spring of 2016, the University’s board voted to increase tuition and residential comprehensive fees by 3.3 percent for the 2016-17 academic year, above the national CPI average adjusted for inflation. Tuition now totals $69,250, including additional fees, for 2017-2018.
While private schools account for 200 out of the top 250 institutions whose students graduate with the most debt per borrower, compared to private institutions nationwide, the University ranks favorably: 89th out of over 500 participating private colleges and universities. 43 percent of students at Wesleyan leave the University with student loans (down by 4.44 percent from 2015), with an average debt of $22,495 per borrower (a 9.51 percent decrease from the data in LendEDU’s 2015 survey). There are only two private colleges in the state of Connecticut where students graduate with less average debt than Wesleyan (the University of Bridgeport and Yale University). The University also performs better than all public colleges in the state who reported data on their percentage of students who graduate with debt and the average student debt per borrower.
Wesleyan fares well compared with its Connecticut-based NESCAC rivals Trinity and Connecticut College (where students leave with an average of $29,506 and $27,541 per borrower, respectively). The only schools in the NESCAC where students graduate with less average debt are Williams and Amherst.
“I can tell you that decreasing student indebtedness has been the highest priority in the last 10 years and in the Roth presidency specifically,” said Nancy Hargrave Meislahn, the University’s Dean of Admissions and Financial Aid. “One element of that has been the clear commitment to fund-raising for student financial aid.”
Wesleyan’s decade-long THIS IS WHY campaign, which concluded last year, raised over $274 million for financial aid.
On July 3rd, 2013, President Roth published a post on his blog titled “Student Loans: Congress Must Act!,” where he decried soaring interest rates and championed the University’s relatively new practice of ensuring that its poorest students leave school with no debt. Perhaps the most significant policy to combat student debt enacted during the Roth era is the No Loan/Reduced-Loan Policy. The University also offers a three-year degree that allows families to save approximately 20 percent of the total costs of a degree.
“Our No Loan Policy provides our highest need students the ability to graduate Wesleyan with $0 [in] debt,” Robert Coughlin, the University’s Director of Financial Aid, wrote in an email to The Argus. “Originally offered to students whose parents earn $40,000 or less, this initiative has been expanded over the past three entering classes to include students with parent incomes up to $60,000. Our Reduced Loan Policy provides debt relief to additional students.”
The University states on its website that students with family income levels above the $60,000 threshold who are eligible for need-based aid are not expected to borrow more than $19,000 for the duration of their undergraduate education.
President Roth also made the issue of student loan debt a central topic of his State of the School address last fall. He acknowledged that, while the University states that it meets 100 percent of its families’ financial need, middle and working class students often face a burdensome work-study schedule that interferes with their ability to participate in other aspects of student life. As the University’s endowment continues to grow at an impressive pace (from $521.9 million to $838.8 million in the last five years), President Roth hopes that he will be able to extend the University’s no-loan plan beyond those who are eligible for Pell Grant status.
“An initiative introduced this year for the Class of 2021 reduces the amount a parent’s home is factored into the need analysis,” Coughlin said. “This initiative, intended to ease the financial pressures for our highest-need students as well as our students from middle- and upper middle-income families, affects students with parent income levels up to $160,000.”
For the Class of 2015, 46 percent of first-year students received scholarships and grants; 37 percent of first-year scholarship recipients received total grants that exceeded $55,000.
“Additional programs introduced have relieved financial pressures for eligible students,” Coughlin continued. “The No Hungry Student Act and the Wesleyan Print Allowance Program are recent examples. These efforts, involving collaboration between administration and WSA, demonstrate the positive outcomes that have resulted to address areas of greatest concern.”
Looking forward, Coughlin believes that improved student outreach will be an essential component of the administration’s strategy to reduce the burden of student loan debt.
“First and foremost, the administration can and will continue the commitment to raise additional funds for financial aid,” Coughlin said. “We in the Financial Aid Office are looking to expand outreach efforts to students by offering more financial literacy workshops focused on budgeting, debt management, credit and identity theft. While individual loan counseling sessions have always been available, we are reviewing our processes to see when it might make sense to require a one-on-one meeting, for example when a student requests to borrow an unusually high amount. Our hope is that enabling students to become more aware of their finances and better informed about their options will ease some pressures for managing debt after graduation.”
Aaron Stagoff-Belfort can be reached at astagoffbelf@wesleyan.edu