A tsunami of student-loan debt threatens the belief that education is key to achieving the American dream. How to make college accessible without burying graduates in debt is a complex problem. No single solution will fix it.
This week, the New York Times made Ohio the poster child for the nation's student-debt dilemma. At Ohio Northern University, a small, Methodist-affiliated private university in Ada, students graduate with an average debt of $48,886.
At the premier public university, Ohio State, state aid accounts for 7 percent of the budget, down from 15 percent 10 years ago and 25 percent in 1990. Since 2002, the Times reports, tuition and fees at OSU have risen by about 60 percent. Sixty percent of OSU undergraduates borrow to pay for college. On average, they owe $24,840.
The problem is national. Student-loan debt passed $1 trillion this year -- more than U.S. consumers' credit-card debt.
Twenty years ago, most students did not borrow to get a bachelor's degree. Today, more than two-thirds of graduates get a loan-repayment book with their diploma. On average, new graduates owe $23,000. But 10 percent have more than $54,000 in loans, and 3 percent owe more than $100,000.
And less is being paid off. Five years ago, 45 percent of college loans were in repayment. Today, it's 38 percent. The rest is in deferment, forbearance, or default. Nearly 10 percent of borrowers who began to make payments in 2009 defaulted within two years.
Student loan debt has slowed recovery from the recession. Even when graduates find jobs, they can't buy homes, cars, appliances, or other big-ticket items.
Too often, college marketers underplay debt and overplay career opportunities to fill classrooms. This is especially true of for-profit colleges, which enroll 11 percent of U.S. undergraduates but get about 25 percent of federal loans and grants.
During the Great Recession, politicians such as Gov. John Kasich reduced their budget-balancing options by vowing not to raise taxes. Ohio ranks sixth from the bottom among states in spending per student on higher education. Nationally, the Times said, per-student aid is at a 25-year low when adjusted for inflation.
Too often, parents don't save enough for college. Even when they do, costs in recent years have risen faster than incomes or inflation.
Too often, students fail to monitor their debt responsibly. Enticed by the real career advantages of a college degree, they take advantage of easy access to federal money at low interest rates, without asking how much they will owe.
Other contributing factors include bloated university administrations and administrators' salaries, competition to hire overpriced and sometimes nonteaching faculty, and overspending on amenities such as luxurious dormitories, food services, and recreational facilities.
Parents, students, and states can help, but it is up to colleges and universities -- especially public institutions -- to raise revenue, cut costs, or both. "The notion that universities can do business the very same way has to stop," OSU President Gordon Gee told the Times.
Colleges are doing more fund-raising, enrolling more out-of-state and international students who pay full costs, privatizing services, selling properties, cutting staff, and eliminating programs and departments. Some state officials, including Mr. Kasich, demand an end to what they call redundant programs.
The college-as-big-business model isn't working. Public universities should focus on their original mission: to educate the state's young people, prepare them for careers in the modern world, and equip them to be effective citizens.