At a time when the nation needs to capitalize on the natural talents of all of its young people, skyrocketing tuition and borrowing have become major barriers for young people wishing to get a college degree. Even though a college degree is worth every dime in the long run, the upfront costs are forbidding.
To bridge the gap, more and more students are resorting to borrowing. Nationally, two-thirds of the class of 2010 had debt and owed $22,000 upon graduation. This does not include parental debt.
In North Dakota, over the past 20 years loan borrowing increased by 540 per cent at UND and NDSU, 241 per cent at other four-year schools and 423 per cent at the two-year schools.
Tuition increases lead to student loans and student loans lead to some significant consequences.
1. The availability of easy student loans has reduced the pressure on colleges to hold the line on tuition. The tuition-setters know that students can borrow so they keep raising tuition with a nominal amount of resistance.
2. University bureaucracies have been mushrooming because loans are available to pay the high tuition that feeds administrative costs. It is a rule of hierarchies that staff agencies grow more rapidly than line agencies. In terms of college administration, that means that administrative costs increase while teaching costs lag behind.
3. With easy money available, students continue to pursue lifestyles beyond their means. College dorms are spurned for more costly off-campus apartments. Late model automobiles, binge drinking and expensive weekend jaunts are all made easier with student loans.
4. As long as loans are available, students continue to pursue fields of study for which there are no jobs or jobs with limited incomes. Loans help them avoid economic realities.
5. Because student loans make tuition increases easy, state legislatures across the country are appropriating less and less for higher education. In this regard, North Dakota has been doing better than other states, increasing appropriations per student by 27 per cent during the period of 2005-2010. Tuition increased 12 per cent in North Dakota as compared to a national average of 15 per cent.
6. As long as institutions can ride on increased tuition, they continue academic programs and entities that should be terminated, e.g. postgraduate programs that lack both staff and enrollment.
But we can't let any of the negative consequences that may be occurring dampen our interest in getting every qualified high school graduate into a postsecondary school.
The stakes are high for every young person. The national average income for a high school diploma is $28,000, for a college degree it is $49,000. The unemployment rate for a high school diploma is 11 per cent, for a bachelor's degree it is five percent.
Unless the state treasury gets raided by initiated measures, North Dakota could well afford a program similar to the one used in Georgia where promising students are granted free tuition in the state's institutions of higher learning. This program would guarantee that good students from all income levels would get a chance to pursue a degree.
When it comes to tuition and student loans, North Dakota has been doing better than most states. Even so, we don't want to fall into the trap of comparing ourselves with sinking ships. We have high school graduates who are intimidated by the price tag. No matter how few they are, a mind is still a terrible thing to waste.