John Schwenn: Getting a handle on student debt

Published 5:09 am Sunday, December 18, 2011

This column has addressed the value of a college education and the positive impact a college degree can have over a lifetime of earnings. Estimates range between $550,000 to more than $1 million in lifetime income that can be accrued by those holding a bachelor’s degree; more for higher degrees. But the value of that degree must be measured against the cost it takes to get it.

Students who graduate from college saddled with tremendous student loan debt start out in a very deep hole from which it can be hard to emerge, especially in a depressed economy.

Justin Wolfers, an associate professor of business and public policy at the University of Pennsylvania, does not dispute the value of a college education but does caution against paying too much for that degree. “Going to college is worth it,” Wolfers says, “but doing so expensively might not make a lot of sense.” Here is where Dalton State’s affordability figures very favorably. We’re proud to make college education accessible to so many families whose students can come and earn a degree at a very reasonable cost.

The College Board reports that more than half the students at America’s public and private colleges now graduate with debt; the average for public college graduates is $22,000; at private colleges it’s $28,100. The Project on Student Debt estimates that two-thirds of students graduate with debt, averaging $25,250 owed in student loans. At Dalton State, 44 percent of our 2010 seniors graduated with student loan debt; the average amount owed was less than half the national average at $11,953. Less than half the national average!

Do we have students who cannot afford Dalton State’s low annual tuition and fees of $3,600? Indeed we do. Keep in mind that financial aid covers more than just tuition and fees but also related expenses including room and board, books and supplies, even transportation and other incidentals. Many students cut back or quit working in order to go to school and require aid in lieu of income. And 59 percent of our students report that they are first-generation college students — the first in their families to go to college — which often indicates they come from rural and/or lower income homes.

Dalton State offers one of the most affordable four-year college degrees in the country. Our costs fare well against other public colleges and are well below that of private schools. When considered against the new crop of pricey for-profit colleges and universities, we are a real bargain. It is disturbing that students of for-profit schools and online universities are more than twice as likely to default on loans; the federal government (which issues most college loan money) needs to look seriously at how well these high-priced institutions are preparing graduates for jobs that would help them pay off their debt.

One way to view student debt is to consider it as an investment in a lifetime of higher earnings. At less than $12,000, Dalton State’s average debt seems modest against future earnings of more than half a million dollars. Likewise, it can be seen as a hedge against joblessness: At 9.1 percent, the unemployment rate for young college grads is significantly below that of young adults with just a high school diploma; the unemployment rate for that group is 20.4 percent, according to the Bureau of Labor Statistics.

Debt of any kind is a bitter pill to swallow. At Dalton State, we offer outstanding value. We are committed to keeping our costs within reason while providing the highest quality education that we can. We think we do a good job of it, and in this day and time I would encourage all who are looking at colleges to keep their eyes wide open and consider seriously the cost of the investment against the value of future returns.

John O. Schwenn is the president of Dalton State College.