Financial Aid and Adult Students; the Elephant in the Room

Americans owe over $1.4 trillion in student loan debt. Many economists have suggested that it is $600 BILLION more than the total of U.S. credit card debt. Women hold nearly two-thirds of the U.S. student debt'roughly more than $800 billion.

A recent New York Times article reignited the conversation surrounding the highest barrier for adults students returning to college, that of student debt. The article referred to Levy Economics Institute of Bard College's research paper, The Macroeconomic Effects of Student Debt Cancellation (PDF). The academic survey analyzes the situation from three perspectives; increasing college costs and debt, the balance sheet mathematics of liberating students from loan debt, and economic effects of debt cancellation. According to their analysis, debt cancellation would lift the GDP and decrease the unemployment rate, while only modestly increasing interest rates. While they posit that the federal budget deficit would increase, state budgets would improve because of the stronger economy.

Student Loan Debt Changes Coming?

If we assume that the cancellation of all U.S. student debt is unlikely to occur, we must instead try to examine alternatives to the continuing challenge that paying for a college education poses to students, especially for adults returning to complete their degrees.

A Hechinger Report, Debt Without Degree: State cuts money to higher education while student costs skyrocket, defines a large portion of the problem.

The report looked at the growing pool of Georgia residents who have debt but no degree. Budget cuts to higher education institutions in the State forced colleges and universities to raise tuition. The report suggested that some students drop out, even with federal and state financial scholarships and loans, because they cannot make the tuition and fee payments on time. Other students do make the payments but only because they are employed more than 25 hours per week, making it harder for them to graduate.

Female Students At Higher Risk of Student Loan Default

The American Association of University Women (AAUW) research paper, Deeper in Debt: Women and Student Loans, notes that female students, especially those with dependent children, are at higher risk of both dropping out and defaulting on loans. Institutions should provide the support and services that these students need. As an example, it may be necessary to provide adult students with children with childcare during classes. CAEL has seen similar results from student respondents to our Adult Learner 360 survey, with students often placing higher levels of importance on the institution to provide supports such as dependent care. The AAUW also agrees with CAEL that financing options for part-time and nontraditional students should be easier to access and less confusing.

Funding for Higher Education

There are no easy solutions. The reality is that funding for higher education is still significantly lower than it was a decade ago. The new reality calls for innovative thinking. Cities such as Kansas City and states such as Tennessee and Mississippi have looked at various creative solutions, including waiving application fees for returning adult students and helping students negotiate unpaid fees that disallow access to transcripts. These students need more options for financial aid and billing, for instance not having to pay mandatory student fees, especially when attending online.