With national student debt now surpassing credit card debt and possibly reducing graduate school enrollment, discussions about debt have moved out of institutional financial aid offices and into the larger discourse on graduate school reform.
“It can’t have escaped notice that it’s not just the year of the MOOC, it’s also the year of student debt,” Daniel Denecke, associate vice president of programs and best practices for the Council of Graduate Schools, told deans during the organization’s annual meeting Friday. “Student debt topped $1 trillion this year for the first time.”
Although much of that total is held by those with undergraduate degrees, Denecke said all aspects of the debt issue bear on graduate schools and students. Enrollments in graduate programs other than the health sciences are down for the second year in a row, possibly because more and more undergraduates are saddled with debt and therefore reluctant to take on additional graduate school debt in a less-than-certain job market (a decade ago, about half of all students graduated with debt, Denecke said; today, about two-thirds do).
Because it’s impossible to divorce undergraduate and graduate debt in looking for solutions to the problem, Denecke said the council and TIAA-CREF, a financial services firm, are launching a new program early next year to study both types of students’ debt loads and experiences. It will also fund financial literacy programs at select campuses across the country through forthcoming grant opportunities.
Data and best practices gleaned through the program will be disseminated broadly as “tools” to help other institutions help their students deal with debt, he said.
The panel discussion included presentations from deans whose universities already have moved forward with school debt awareness campaigns and reforms.
Like Denecke, A. Jerald Ainsworth, dean of the Graduate School at the University of Tennessee at Chattanooga, said discussions of graduate debt have to involve undergraduate debt because “that’s our pipeline to graduate students.” He also noted that students who leave undergraduate programs with no debt are nearly twice as likely to go on to graduate programs as those with outstanding loans.
To emphasize the importance of limiting student debt, Chattanooga is in the second year of its “Live Like a Student” campaign, a universitywide approach to financial literacy. The key is making the ideas of living within one’s means and borrowing only what one needs an integrated part of undergraduate and graduate education, not just “a random drop-in process,” Ainsworth said.
“We have banners and posters all over campus to advertise this,” he said, in addition to “emphasis months,” when bankers and other financial experts visit campus and speak to students about interest rates, scholarships, investments and other topics. Business students also have signed on to become peer financial counselors, and financial literacy has been incorporated into university orientation days for students and parents.
The campaign this year is asking students to think specifically about whether they’re “living cheap enough,” Ainsworth said, and encouraging them to forgo immediate gratification for the payoff of graduating with minimal debt.
“I understand that it’s poverty wages,” he said of many students’ budgets, “but [they] have to understand what [they] do now, [they’ll] pay for later.”
Additionally, he said, the university’s financial aid office includes a staff member who works exclusively with graduate students.
Still, some deans present questioned whether financial literacy was the answer to the problem — particularly in regard to older students with families to support.
Cosmas Nwokeafor, dean of graduate studies at Bowie State University, said a student recently visited his office to talk about dropping out of his program. The student had been living within his means, he said, but his loans simply were not enough to support his wife and daughter. (Aggregate federal direct loan limits for graduate students for the duration of their programs are $138,500, and no more than $65,500 of this amount may be in subsidized loans. This includes Stafford loans received for undergraduate study.)
“A lot of students are still struggling because they don’t have enough funding, and our rate of attrition is hurt by that,” he said.
Although Nwokeafor acknowledged that raising borrowing limits could increase financial pressure on students upon completion of their degrees, such a move would be “very, very helpful” during schooling.
Another audience member said not just tuition, but rising student nontuition fees, outpaced available assistantships for many students — including those who were financially responsible.
Ainsworth agreed, saying fees were something he’d struggled to limit at one of his institutions he’d worked for. But that task is particularly challenging with the current government spending cuts to higher education, which often get passed on to students in the form of varied fees.
“There’s a fee for everything and they get increased every year,” he said.
Another panel member, Ramona Mellott, dean of the graduate school at Northern Arizona University, said the issue of graduate student debt is a complex one that the council is just beginning to explore.
“This is very, very new to us,” she said. “I’m sure we’re going to hear a lot more.”