Report details causes of N.H.’s high student debt
High tuition, few low-cost options and limited state funding are key contributors to rising college debt among New Hampshire college graduates, higher here than anywhere else in the nation.
“There’s not one single culprit in this problem of high tuition costs and high student debt levels,” said Brian Gottlob, the researcher who authored “Why is Student Debt So High in New Hampshire (And What Can We Do About It?),” a report released yesterday.
In 2011, 75 percent of New Hampshire students graduated with debt, averaging $32,440 per student, according to the report. Graduates of New Hampshire’s private colleges take on $4,000 more in debt than graduates of private colleges nationally, while graduates of the state’s public colleges incur $9,000 more in debt than public college and university graduates nationally. From 2001 to 2011, the average debt of public college graduates in New Hampshire increased by 10 percent more than their counterparts nationally.
The report explores the factors that contribute to these gaps in an effort to provide lawmakers and higher education administrators with information that can lead to solutions for lowering costs and limiting debt. Gottlob is a researcher for PolEcon Research and was commissioned to do the study by Granite State Management and Resources, an organization under the New Hampshire Higher Education Assistance Foundation.
“We’re also hoping that some of the recommendations and some of the content within this helps other groups come together and say, ‘How can we get creative about how we solve this problem?’ ” said Tara Payne, vice president for college planning and community engagement with Granite State Management and Resources.
Few low-cost options
One main contributor to high debt, the report found, is the state’s limited number of low-cost public colleges and universities. In 2011, tuition at the state’s public colleges was 20 percent of the state’s median household income. That number drops to 16.6 percent when financial aid is included, but that is still higher than the national average of 16 percent when aid isn’t included. (At the University of New Hampshire, the average tuition for the 2013-2014 school year is $13,670 for in-state students and $26,390 for out-of-state students.) In part, tuition is driven up because New England is the country’s most competitive region for faculty and students.
This high tuition drives up debt because it eliminates one of the main roads students take to reduce debt: attending low-cost public institutions in their home states. Data show that more of New Hampshire’s high school students are starting to enroll in public colleges within the state, but it’s doing little to lower tuition costs.
“There just isn’t an easy out for parents and students looking to lower their costs,” Gottlob said.
Lack of state aid
On state aid, the report found the Legislature would have had to appropriate $85 million to $130 million more to public colleges in 2010 to reach the national average of spending per full-time equivalent student. That additional state money would decrease public colleges’ budget reliance on tuition from 81 to 57 percent. Even spending $1,000 to $2,000 more per student while asking colleges and universities to cut some costs would bring tuition costs closer to the national average, the report found. The report shows that for every $100 decrease in tuition at public colleges, student debt decreases by $78.
This year’s Legislature did restore some of the higher education funding that was gutted from the state budget in 2010, and the University of New Hampshire voted this summer to freeze its tuition for the next two years.
“The fiscally responsible, bipartisan budget that Governor Hassan signed in June increased funding for the University and Community College systems, which was significant progress with a real, tangible result for students – an in-state tuition freeze, the first tuition freeze at our university system in 25 years,” said William Hinkle of Hassan’s office in an email. “As we move forward with future budgets, Governor Hassan will continue to support helping make college more affordable and more accessible for all of our students.”
UNH recognizes growing student debt as a problem, said Mark Rubinstein, vice president for student and academic services, in an email. In 2010, the university laid out a strategic plan to combat rising tuition, which included expanding online course offerings during summer and winter breaks, working with the community college system and growing private financial aid partnerships. The university also worked with the Legislature on the tuition freeze.
“Going forward, we hope that further progress can be made to encourage greater support from the state that will allow us to continue these efforts that will lessen debt levels in the future,” he said, adding that the school also is looking at ways to control costs.
Rubinstein also said that the majority of students who attend UNH for undergraduate studies take on less than $28,000 in debt, which is below the $32,000 average referenced in the report.
In response to the report, the Community College System of New Hampshire released a statement touting the value of two-year colleges as cost-saving options. In addition to attending community college full time, high school students can receive college credits online for a lower cost.
“It is clear that expanding the utilization of NH’s community colleges is an important part of a strategy to make college more affordable and reduce the debt levels of NH college graduates,” Director of Communications Shannon Reid said in a statement.
Gottlob said he hopes the details in his report will show legislators what actions could lead to savings. New Hampshire typically has a competitive advantage in attracting highly skilled and educated workers, but that could change if college costs don’t come under control. Beyond lawmakers, he said he hopes college leaders, parents and students will start working together and taking action to benefit students across the state.
“A lot of people have a role in addressing this,” Gottlob said. “And because it is so critical, we all have to.”