Opinion: Virtual learning could help Michigan with student debt
In the United States, the outstanding student loan debt balance has swelled to $1.67 trillion, and the situation is only getting worse in most parts of the country.
But, Michigan is bucking that trend according to the latest data.
LendEDU recently published our fifth annual Student Loan Debt by School by State Report, which analyzed the respective student loan debt numbers for the class of 2019 at 475 colleges and universities.
On a national level, the average student loan debt per borrower figure for the class of 2019 was $29,076, which was a $511 increase from the class of 2018’s figure.
Yet in Michigan, the average debt per borrower figure for the class of 2019 was $28,895, an 8.79% decrease from last year’s data.
For Michigan, its figure from this year’s report was only the 25th lowest in the country, but at least student loan debt in The Great Lake State is trending in the right direction, which is evident by the state having one of the largest year-over-year decreases.
Among institutions in Michigan that had the lowest debt per borrower figures were Wayne State University ($25,095), University of Michigan-Dearborn ($25,268), University of Michigan ($25,777), and Olivet College ($26,872).
If Michigan is to continue in the right direction when it comes to reducing student loan debt, things will need to happen on a school, state, and national level.
On a school level, higher education institutions in Michigan need to create a permanent virtual learning option that will come at a significantly lower price tag than the in-person experience.
When the coronavirus pandemic swept across this nation during the Spring semester students had no other option but to try online learning, and as a result, many have come to realize that it’s a perfectly viable way to attain a degree.
We live in a new world, and virtual learning is now a permanent part of it. Colleges, some of which are suddenly staring at thin enrollment numbers, should lean into this by offering a permanent online education option for students.
This option, of course, should be priced far cheaper than the traditional college experience because the former simply does not offer as much as the latter. And by slashing the price, students won’t require as much student loan debt to finance their education, which will reduce the state’s average debt per borrower figure over the long run.
On a state level, legislators need to implement a state-wide cap on how much student loan debt one student can take on, perhaps around $40,000.
There is no good reason higher education institutions, with their endowment funds averaging around $65 million, should watch as their students take on six-figures worth of debt to attain a degree that is usually not even close to being worth that much.
On a national level, federal lawmakers must finally reauthorize the Higher Education Act and specifically begin holding colleges accountable if they show a history of high student loan debt and default figures.
If a college or university falls into that category, they will have to help their student loan borrowers repay a portion of their debt. Maybe then, institutions will think twice before raising tuition because now it’d be their dollars at stake.
Michigan is certainly heading in the right direction when it comes to student loan debt but the situation still requires plenty of work that will need to come from multiple seats of power.
Michael Brown is director of communications at LendEDU, a personal finance marketplace based in Hoboken, New Jersey.