According to American Student Assistance, each year 20 million Americans attend college. 14.7 percent attend a private, not-for-profit institution like GW. With its prime location in one of the nation’s most expensive cities, it should come as no surprise that GW’s tuition is among the highest in the country, taking the dubious distinction of most expensive university overall in 2007. It’s no secret that college tuition costs have been skyrocketing, and while GW’s endowment — over $1 billion in the 2010-2011 fiscal year — allows the institution to somewhat buffer the cost of a GW education, many students — collegestats.org reports the number at 40 percent — turn to student loans to help cover the rest of the cost. And the costs only add up over time—ProjectOnStudentDebt.org documents that 47 percent of 2010 GW grads had debt, and that the average debt was $32,547.
Many students blindly and absentmindedly sign promissory notes and take out more loans than they realize they will be able to pay back. One survey of student borrowers reported that roughly 65 percent “misunderstood or were surprised by aspects of their student loans or the student loan process.” It’s the problem plaguing many students that mainly gets discussed behind closed doors, probably because household income is such a sensitive topic.
But how did students get into such predicaments in the first place? Students are consistently lectured by their parents to be financially responsible, and parents are an integral—most of the time essential—factor in funding our college education, so where along the line did we get in over our heads? Admissions departments and directors—according to a recent study conducted by Inside Higher Ed in cooperation with Gallup—can, and have been, encouraging these patterns of overcommitting to financial loans and financial payment plans that converge in student debt. This survey, based on responses from 576 college admissions directors, highlights some disturbing behavioral trends among admissions directors, including the fact that only 2 percent believe that no debt is a reasonable end result of college financial planning. 50 percent of admissions directors of private 4-year institutions responded that between $20,000-$30,000 was a “reasonable” amount of debt for 4 years. While many do not advocate taking out private loans, which tend to have fewer borrower protections and higher interest rates), many students often turn to private loans because of a phenomenon called ‘gapping’, which is when colleges provide financial aid packages that do not cover the full cost of enrollment. Almost 74 percent of admissions directors surveyed at private 4-year institutions, however, believe gapping is an ethical practice!
But let’s cut past the numbers and percentages and cut to the chase: while the results of this survey do not explicitly incriminate GW’s admissions director or GW’s admissions department as a whole, what these surveys do indicate is the discrepancy between the financial aims of students and college admissions departments. Student debt and financial aid is on the mind of many a student, but it’s a conversation few are willing to openly engage in. Idealistically, the primary goal of higher education should be education itself, not emptying families’ bank accounts to pay for a degree that may or may not result in a steady job after graduation. While one of the perks of coming to a school like GW is the depth and diversity of its alumni network, this is by no means a guarantee of a steady, sustainable income for the years to come.
So is there an answer to student debt? The obvious, but not necessarily pragmatic one, is to spend less and make sure you can pay back what you commit to. But the responsibility rests not only on the shoulders of the families investing money into our educational system, but also with the federal and educational institutions administering the money. It is downright irresponsible to knowingly let a student borrow more than they can pay back, and then blame them and further punish them for it later on.
The discrepancy between the aims of the various institutions engaged in the student debt machine needs to be broadly and openly addressed if the education investment patterns in this country are going to change. The student debt clock continues to tick: let’s do something about it.