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Student Debt and College Accountability are Not Mutually Exclusive Issues

Mark Huelsman

Arne Duncan made some waves yesterday with a speech that ostensibly tried to provide some “tough talk” for colleges to do better at graduating their students, improving learning outcomes, and generally providing value in the labor market. It was a marker placed in the ground by the Secretary of Education mere weeks after the Administration retreated on its plan to rate colleges and universities on value and outcomes and tie the gravy train of federal financial aid funds to such a rating system.

The speech has billed by many as a move by the Administration to “broaden” the conversation away from the recent push for debt-free college, free community college, and student loan forgiveness. But it also fits a bit of a pattern over the past 6 or 7 years, in which the Obama Administration makes a hard push on college affordability and access, followed in a year or two with a reminder to colleges that they shouldn’t bilk students for all their money, followed by another push for access and loan repayment options, and so on. Coming off the heels of  the President’s push for free community college earlier this year, this seems like another ebb in the cycle.

This isn’t necessarily a criticism; there are necessary conversations to be had about the provision of education, from holding predatory colleges accountable for their student outcomes, to the net price that students face, to how colleges get to participate in the federal aid system broadly, and these discussions are big enough on their own. But it’s kind of weird that the reaction to Duncan’s speech has been that he was “implicitly” criticizing the push for debt-free college, or Duncan’s own assertion that discussion of debt-free or free college doesn’t include student outcomes.

Of course student debt is part of student outcomes. The Administration itself understood this when it designed Gainful Employment regulations that sought to measure colleges’ graduates debt to their income, or their ability to repay principal on their loans. We also know that after a certain point (a point well below current average debt levels, mind you), student debt is negatively correlated with graduation, thus standing in the way of the outcome that Duncan and others (rightly) want colleges to help students achieve. It’s also about the ability to build wealth early (or even late) in a borrower’s career. It’s also about access. There’s enough literature on loan aversion as well as the impact of high prospective prices to worry us about whether we’re preventing entire subsets of students from going to college at all.

This is where the discussion about debt-free higher ed is getting confused.

Up to this point, anxiety about student debt has been a byproduct of big, scary numbers—the $1.2 trillion in aggregate debt, the $30,000 average balance, the $150,000 debt balance for your garden-variety lawyer. But most of us who have been following this issue for a while are most concerned about the impact of student debt on the ability to receive a degree, and mostly what it’s doing to those who don’t get it. The concept of debt-free college hopes to take some of these issues off the table, and make sure that the risk we’ve created over the past 30 years no longer falls on the backs of student borrowers. It’s about providing a quality option for students who may find unmet financial need unmanageable—an option that low-income college students today don’t really have.

The discussion of student debt goes hand-in-hand with college quality, and our measures of that quality should absolutely be based on more than just an average net price or an average debt level. It should be based on how well colleges are graduating students who receive Pell Grants (something that could be public knowledge right now) and how much those Pell recipients are borrowing. Likewise underrepresented students of color. It should be based on which students are repaying their loans and which are not, how quickly they’re able to do so, and how many borrowers are taking on debt but not graduating. It should be based on how well colleges and universities are allocating public funding, and which schools are doing a decent job even with a deteriorating pot of state money.

Treating these issues as mutually exclusive obscures part of why student debt is a major issue for so many, and what debt-free college would hope to achieve.