$1T debt marker puts pressure on institutions to ramp up affordability
- Increases in college enrollment, and a larger pool of those students requiring federal loans, have increased the national student loan debt ceiling to $1.3 trillion.
- Low-income and disadvantaged borrowers comprise the largest share of loan defaults, which officials attribute to the low degree completion rates among the group and the struggle to earn gainful employment as a result.
- U.S. Department of Education officials say that 80% of student loan holders are current on repayment, a byproduct of more flexible repayment plans, increased awareness of quality schools and financially risky institutions, and cuts to student loan interest rates.
While most colleges are well-versed in reacting to assumptions about student access and performance, many campuses do not consider the federal and state reactions to the same performance metrics. This lack of understanding is hurting many campuses with quality intentions in growing diversity and access with performance-based funding metrics and affordability guidelines, which could hurt smaller public and private institutions with missions of admitting marginal and non-traditional students.
Community colleges, Hispanic-serving institutions and historically black colleges all fall into the targeted institution category in federal demands for outcomes-based performance. For these institutions, fully understanding these metrics and the timetables by which funding may be negatively impacted are critical to legislative advocacy and support.