Bring up student loans anywhere near a college campus and you’re sure to get more than a little nervous laughter. Despite their commonality — 61 percent of University of Minnesota students graduated with debt in 2013 — little is known about student loans.
How big are they, really? How many University fees, outside of tuition, are students accountable for? And how are we ever going to get out of debt? When you enroll in college, those answers aren’t easily found.
Minnesota lawmakers have introduced several bills this session that seek to make the answers to these questions more accessible. Unfortunately, the bills have gained little traction since their introduction.
The lack of transparency regarding student debt is more than just a bummer for college students — it’s a looming economic crisis that deserves legislative attention.
Minnesota lawmakers have marketed one prominent bill as providing “Truth in Enrollment,” which is part of the problem. A bill that would require colleges to provide
information like expected tuition increases, sneaky university fees and the average amount of distributed financial aid sounds great — for college students. Presented as
such, however, it appears as though few other people would benefit from these laws.
Referring the bills to Higher Education Committees only reinforces this perception. It’s difficult to advocate for a bill that would consolidate information that a few Google searches could extract. When I first heard of these bills, I thought they were a waste of energy.
But some sobering facts changed my mind. Minnesota ranks fifth-highest in student debt in a nation where student loans form the second-largest source of its consumer debt.
That’s a larger portion of household debt than car loans or credit card bills. All of a sudden, this kind of debt doesn’t sound like it’s just a student problem. It’s an “everyone” problem.
Similar to the way the Minnesota “Truth in Enrollment” bills have been shuttled off to the Higher Education Committee, the United States Department of Education is the only government agency overseeing federal student loans. This is worrying because the U.S. government has a portfolio of about $1 trillion in student loans, none of which the
U.S. Department of Education is adequately analyzing. It hasn’t released detailed analyses, nor has it allowed another government agency to organize its data. One or both of these actions must be taken.
We don’t even know many basic facts about student loans, such as how many borrowers are delinquent on their federal loans. Left unchecked, inattention to student debt data could result in a financial disaster as devastating as the 2008 mortgage crisis.
Laws related to higher education are often treated as specialty items that will only serve a small section of the population. But as the lack of transparency surrounding student loan demonstrates, higher education issues have huge effects on everyone.
Legislators have ignored the magnitude of student debt for too long. Everyone, not just college students, needs to know more.