The Debt Threat on Our College Campuses
College financing options have not kept pace with college complexity and cost increases — except in the case of student loans. The risk of a daunting debt overhang upon graduation is an educational deterrent for almost all college students, but becomes especially so in the case of students from low-income families. Since low-income students make up much of the core constituency at historically Black institutions, their educational options, or lack thereof, have direct implications for entire regions.
For example, upon graduation, many of these students become members of the managerial and leadership pipeline for local, regional and national companies. Among other things, their employment choices may be influenced by residual pressures from the way they managed their education costs.
More financially well-endowed institutions are approaching the problem by easing the cost burden on low-income students. For example, UNC-Chapel Hill was among the earliest institutions to promise that their low-income students would graduate without any college debt. Stanford University has determined that “… parents of financial aid applicants whose total annual income is less than $45,000 will not be expected to pay for their children’s educational costs.”
It is telling that the model both of these institutions subscribe to implies that low-income students and their parents cannot handle the college debt problem on their own. With proportionately few of these students, the elite, well-endowed institutions can easily accommodate the no-debt model. However, alternatives are needed at “endowment challenged” institutions, which generally have large proportions or numbers of low-income students.
At present, low-income students and their parents cope as best they can at lesser endowed colleges and universities. Too often, these students are qualified primarily to work at minimum wage jobs, which they do before and during college. But the federal minimum wage has been long stagnant. In order to make ends meet, these students often work hours that we know are incompatible with academic success.
