State legislators question effectiveness of federal student loans and policies
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A bipartisan task force said spending more on loans for higher education doesn’t help much with affordability. The task force called on the feds to rethink how they work with states.
Americans owe about $1.6 trillion in student loans, 42% more than a decade ago, according to the Pew Research Center. Three in four Americans don’t think college is even worth it if you have to take out student loans. And more than half of college grads are underemployed one year after getting their bachelor’s degrees.
Now a bipartisan group of state legislators is calling for a closer partnership between states and the federal government to help solve these and other big problems with higher education—like ensuring students understand the consequences of taking on student loans, simplifying the loan process and guaranteeing graduates have the skills to fill local jobs.
In a report released earlier this month offering federal policy recommendations, the group said it was time for states to come off the sidelines.
“That's really been a role the federal government has played, and the states just kind of watch,” said Utah state Sen. Ann Millner, co-chair of the National Conference of State Legislatures’ higher education task force. “And so it’s a place that we need to think about how we work together.”
The task force recommendations focus, in part, on making college more affordable. But its members, who include legislators and staff from 32 states, suggested that offering more student loans or expanding the Biden administration’s already sweeping student loan forgiveness programs may not be the right solutions.
“Simply responding to rising student debt with more federal spending will do little to address the growth in college costs and only add to our growing national debt,” the report authors wrote. “More importantly, spending more on the loan program does very little to proactively achieve the collective goals we have for our higher education system.”.
Instead, task force members voiced strong support for Pell Grants, which do not contribute to students’ debt, as the "primary federal strategy" to address college affordability. Federal spending on the student loan program now eclipses spending on Pell Grants.
However, states should continue to be the main source of public funding for higher education, the task force said. Today, four-year colleges receive about 28% of their revenues from state sources, compared to 18% from federal sources.
And while, historically, state colleges and universities have been wary of the federal government asking them to collect more data to send to D.C., the task force acknowledged the importance of that work.
Among its recommendations was that states and the federal government work together to collect data about how students pay for and complete college, and that the federal government help connect state and federal postsecondary data systems.
“The task force does not believe return-on-investment data is the only way to judge the value of higher education, but it does believe that frameworks that help policymakers understand the payoff of a degree are essential in an era where so many students borrow to finance their education,” the authors wrote.
State legislators will need to convince their colleagues that postsecondary education spending results in “value” for students, said Oregon state Sen. Michael Dembrow, task force co-chair.
“That's our job to convince our colleagues of that, and so we need to be convinced of that ourselves,” he said. “You know, the data needs to be there.”
It’s also essential, Dembrow said, for state legislators to keep their eyes on what’s important: producing skilled workers to fill essential jobs in each state. Oregon, for example, struggles to find qualified talent for positions in behavioral health, education and substance abuse treatment, among other professions.
Some people already in the workforce could be trained to fill those roles, but they face barriers to accessing that training, Dembrow said. “Those barriers need to be eliminated.”
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