Undergraduate Debt: A Complex Issue

By Hayley Baker

Graduation is an exciting time for students, professors, and families alike. Post-graduation plans are diverse and range from travel to newfound careers to preparations for graduate school. Regardless of students’ plans for life after an undergraduate career, many have to face the burden of student debt. 

According to statistics on the American Student Assistance website, more than half of the nation’s college students borrow money to help pay for school. Between 2004 and 2009, 37% of federal borrowers were able to make timely payments without postponing or becoming delinquent. Non-completing students have the most trouble paying back debt, and the Almanac of Higher Education of 2013 from the Chronicle of Higher Education reveals that on average non-completing students borrow more per credit earned than completing students. With rising tuition rates, and inquiries into future changes in college student demographics, such as Justin Myers’ piece “Who Will Reach College Age in the Next 14 Years?” also published by the Chronicle, the pressing question becomes: how to handle student debt?

Two different approaches are legislative action and new diverse bachelor’s degree options. On the legislation side, US Senator Elizabeth Warren proposed a bill that would allow student borrowers to refinance their debt at current interest rates, and according to an article in The Huffington Post, already organizations and colleges are supporting it. For some borrowers, the refinancing will work with current income-based repayment plans, further relieving financial situations. The bill would be financed by increasing the taxes on individuals with income in the millions and billions.

While legislation regarding current outstanding debt helps those already under, some are proposing new approaches to undergraduate careers that would lessen debt by cutting cost. Such is the angle of competency-based degrees, explored by Paul Fain on Inside Higher Ed in his article about Southern New Hampshire University College for America‘s recently revealed $10,000 online bachelor degrees in healthcare management and communications. A self-paced program, it is predicted that the degree can be completed for even less than $10,000. While other online programs are available, this program claims to be the first full bachelor’s degree offered at the lowest cost. Programs such as this one are appealing to students who want an education that directly applies to the workplace, allowing them to learn important skills without taking on huge debt. 

While there are various arguments for and against competency-based approaches, often regarding the quality of education, studies being made regarding the quality of life of people who graduate from college also contribute insights to the problem of student debt. Reporter Ry Rivard lays out some results of a survey developed by Gallup and Purdue University that attempts to gauge college graduates’ lives and well-being. 

One of the survey’s findings revealed that people who had to take on a lot of student debt became risk-averse. Liberal arts majors tended to be more satisfied than science and math majors, a finding that suggests that liberal arts degrees are worth more than the current economic climate would have us expect. Well-being correlated with internship and other long-term project experience from college. The findings of this survey suggest that it is not just a degree that brings success or well-being, but a combination of many different efforts put in by the student and opportunities he or she may come across. 

Findings regarding the benefits and drawbacks of bachelor’s degrees reveal just how important financial considerations, including debt accumulation, are for current and incoming college students. These considerations also affect the decisions many undergraduates make regarding the future. With increasing undergraduate debt and some news reports that reveal rapidly growing graduate student debt, the cost of higher education is becoming more and more of a burden for some of the brightest minds of the nation. 

Hayley Baker is a senior at University of California at Berkeley majoring in rhetoric. University of California at Berkeley is home to the Alpha of California Chapter of Phi Beta Kappa.