Student Debt

Student Debt

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Student Loan Debt Growth Relative to Student Borrowers

$1.71

$1.57

$1.51

$1.42

$1.36

$1.28

$1.21

$1.12

$1.02

$0.93

$0.76

$0.67

$0.59

0.45

$0.52

0.42 0.43 0.43 0.43

0.40 0.41 0.42

0.37 0.38

0.34

0.28 0.3 0.32

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cumulative Debt (in trillions) Indebred Federal Borrowers (in hundred millions)

Borrowing Per Student Is Increasing

Who Owes the Most? Distribution of total student debt by level of household net worth (percentile) 58%

17%

15%

6%

3% Bottom 25% 25% to 50% 50% to 75% 75% to 89% Top 10% Net worth= $983,000 Sources: Pew Research Center, Federal Reserve Bulletin The Poorest Students Borrow the Most

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10 15 20 25 30 35 40 45 50

$1,000 $1,200 $1,400 $1,600

$0 $200 $400 $600 $800

0 5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Fiscal Year

Dollars Outstanding (billions)

Recipients (millions)

Fewer Borrowers Owe More and More

THE 10 HIGHEST-PAYING JOBS YOU CAN GET WITHOUT A BACHELOR’S DEGREE

OPENINGS (through 2024) MEDIAN ANNUAL WAGE ( 2016)

RANK JOB TITLE

7,500 2,600

$122,410 $91,170 $89,190 $84,840 $81,900 $80,160 $79,140 $78,890 $77,200 $78,120

2 3 4 5 6 7

Nuclear-power-reactor operators

Transportation, storage, and distribution managers

27,100 43,000

First-line supervisors of police and detectives

3,900 6,200 2,800 5,900

Power distributors and dispatchers

Radiation technicians Nuclear technicians

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Elevator installers and repairers

28,300 15,100

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Detectives and criminal investigators

10 Commercial pilots

Source: US Bureasu of Labor Statistics

Many Occupations Are Available Without A College Degree

The burden of accumulating student debt should be the center point of consideration in higher education choices—for students, families, university leadership, and elected and appointed officials alike.

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Where America’s Students Are In Debt Proportion of 2018 graduates with student loan debt by state New Hampshire South Dakota Minnesota

76%

72%

67%

Pennsylvania Rhode Island West Virginia Illinois New Jersey New York Wisconsin Ohio Delaware Vermont Iowa Idaho Kentucky North Dakota Arizona Kansas Massachusetts Michigan Missouri Connecticut Mississippi South Carolina Georgia Oregon Tennessee Nebraska North Carolina Maryland Arkansas Colorado New Mexico Nevada Alabama Florida Washington California Hawaii Washington D.C. Louisiana Oklahoma Wyoming Alaska Utah Source: lendedu Virginia Indiana Montana Texas Maine

66% 65% 65% 65%

64% 63% 63% 63% 62% 62% 62% 62%

60% 60% 60% 59% 58% 58% 58%

57% 57% 57% 57% 56%

55% 56% 56%

54% 55% 55% 55% 55% 55%

53%

52% 51% 52%

50%

49% 50% 50%

48% 47% 47% 47%

46%

$

38%

36%

Where You Live Matters

Sources of Educational Debt Among Borrowers

95%

23%

11%

4%

Student Loan

Credit Card

Other

Home Equity Loan

Where Students Borrow

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Which of the following impacts concerns you the most when you think about someone with debt from public 2- and 4- year colleges? (Adults citing the largest or 2nd largest) Their ability to complete an education

42% 42%

Their ability to save money Decisions to get married, start a family, buy a home The impact on the career choice available The impact on their credit score The impact on other family members Not sure

32%

26%

21%

17%

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Debt Impacts Almost Every Aspect of the Future

What Young People Make and What They Owe Percent change from 2005 in median annual earnings of people 25-34 years old holding just a bachelor’s degree and average student loan balance for people under 30 years old. Earnigns Student debt

40% 35% 30% 25% 20% 15% 10% 5% 0% -5%

2005

2006

2007

2008

2009

2010

2011

2012

Source: National Center for Education Statistics (earnings); NY Fed (student debt) | Wsj.com

What People Owe Is Growing Faster Than What People Earn

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Student loan borrowers now graduate with an average of $37,172 in student loan debt. That’s about the same as ...

A 20% down payment on a $185,000 home

A 10% down payment on a $370,000 home

A brand new Audi A4 ($36,000)

Tesla Model 3 ($35,000)

Ford F-250 ($35,550)

Startup costs for a business ($30,000)

A wedding ($35,329) A swimming pool ($34,971) Sources: usstudentloansolutioncenter.com; motortrend.com; sba.gov; theknot.com; homeadvisor.com It All Adds Up

How Has Students Loan Debt Impacted Your Career?

38%

34%

31%

27%

25%

6%

05

10

15

20

25

30

35

40

Many Things Impacted By Over Borrowing *Respondents were allowed to make multiple selections, so totals do not equal 100%

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The burden of accumulating student debt should be the center point of consideration in higher education choices—for students, families, university leadership, and elected and appointed officials alike.

This continuous cycle of over- borrowing is harmful to both the borrowers and our national economy.

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A decade ago, student debt surpassed credit cards to become the second-highest form of indebtedness following home mortgages.

Asking the right questions can help prevent lifelong indebtedness.

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Universities blame parents, families, elected and appointed officials for fueling the myth that everyone needs a college education; however, the solution to over borrowing is brutally honest and transparent action by universities.

The Texas Higher Education Coordinating Board suggests that any debt exceeding 60% of the anticipated first- year starting salary upon graduation is “a price too high.

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One glaringly simple alternative to accumulating too much debt, especially in the first two years, is by attending a community college, wherein costs decrease about 90%.

Borrowing with an insufficient return on investment is foolhardy. Borrowing for non-essentials is a big mistake. Borrowing for expensive choices when similar lower-cost alternatives are available is a lapse in judgment. Borrowing with the assumption of someone else paying the bill is immoral. Borrowing to have a good time without regard to long-term consequences is two steps north of stupid.

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Healthy organizations thrive on integrity and transparency.

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Over-indebtedness lands squarely on the shoulders of students... Students borrow too much because over-borrowing is allowed and accepted as necessary.

Honesty and transparency is a morally defensible position, not an illusion.

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I tell every potential student, “Do not attend West Texas A&M University if you have to borrow during your first two years. Go to community college and talk to us every step along the way.”

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Many graduates

have heavy hearts and light wallets.

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Our universities need to be honest and transparent about costs and benefits.

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The debt required to attain an education should be available to be traded as a commodity..

University education costs too much and students without motivation, interest or preparation for university work are a burden to themselves and society – now for 24 years.

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Our universities must be imaginative in finding ways to curtail

and align costs for higher education.

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Increasing costs and the perceived need to serve more and more students with less and less money is backbreaking work for the bean counters and leaves students holding the bag in bewilderment.

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Unfortunately too many institutions say “yes” to students not ready to study: They crave the loan dollars students are willing to sign up for. There is institutional responsibility in this debt burden.

The National Association of Home Builders says student indebtedness is having a negative impact on home buying.

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Being honest and straightforward, I tell the students that if I could guarantee them the college education we offer at West Texas A&M University would make them happy, we would be the largest university on the planet. I have to tell them that’s a guarantee not offered.

The relative dissatisfaction of some college graduates may be due to the ever-increasing burden of indebtedness to attain degrees that appear to offer less and less. The maxim? The greater the level of indebtedness, the more difficult it is to achieve a sense of satisfaction in the workplace.

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The lifelong burdens of college debt and the global impact of debt on disillusionment after graduation make genuine, high contact/high-efficiency institutions appealing.

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A Plan for One

• A Plan for One

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I want to say as clearly and forcefully as possible, even as a university president, that going to college is not for everybody; it is not a guarantee for success, fulfillment, satisfaction, joy or happiness.

What is required is a “plan for one” configured by the student with family, clergy, teachers, advisors and others who love the student and who the student loves.

31 A Plan for One •

No silver bullet describes the best way to choose a college to attend—no chatbot, algorithm, machine-driven artificial intelligence and no other means of sifting through various issues important to future college students provide a foolproof answer.

I say to every one of those students that I

encounter, college is one of many potentials for a satisfying and rewarding future as a citizen in a free Republic.

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As attractive as it may be to grant aid to students equally, regardless of ability, it would not likely prove to be a prudent investment.

Student borrowing rests firmly on the shoulders of students.

• Student Debt: A National, State, Institutional or Personal Problem

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Student indebtedness may be the tip of the iceberg that sinks a free society.

35 Student Debt: A National, State, Institutional or Personal Problem •

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Adding to the burdensome brew are predatory lenders and universities that are disingenuous with students and their ability to repay student loans.

When combined, the predatory lenders, disingenuous universities and promising politicians all bear their part in the overall student indebtedness crisis.

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Many generalizations can be drawn regarding the impact of student borrowing for higher education based on community characteristics. When applied across all communities, the national debt >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52

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