UT System Tackles Issue of Growing Student Debt
On the agenda for Thursday morning's meeting of the University of Texas System Board of Regents is a discussion on a topic near and dear to the pocketbooks of many students and their parents: student loan debt.
With student loan debt now surpassing national credit card debt, part of UT System Chancellor Francisco Cigarroa's framework for advancing excellence, which was approved in 2011, called for the formation of a task force to study the issue. The task force's report, which includes recommendations on how the system can help ease the burden on students, will be presented at Thursday's meeting.
"Not all debt is bad," Scott Kelley, the chairman of the task force and the UT System executive vice chancellor for business affairs, told the Tribune. "Education is an investment that can generate a return that will pay off for that investment. Investing in this pursuit, and even acquiring some debt, may be a good thing."
While he said much of the responsibility for managing debt is on the student, Kelley added, "It is incumbent upon the system to give students good information. I truly believe, if you give them good information and make this transparent and easy to understand, they will make better decisions."
The report identifies three areas where the system can help: improving degree completion, better educating students on the potential costs and returns of higher education and improving transparency to allow better decision-making.
Of students who default on their loans, more than 80 percent did not graduate. To improve students' odds of graduating in a timely fashion, thus keeping debt lower and more manageable, the task force recommends bolstering student work opportunities on campus, fostering more engagement from parents and faculty, and pushing advanced placement courses.
They also recommend requiring undergraduates to complete a degree plan, creating more incentive programs for on-time graduation and allowing more credits to be awarded once students prove their competence, rather than waiting for them to put in a certain amount of time in the classroom — an idea Gov. Rick Perry has been promoting around the state.
To increase transparency, the report calls for investing in the development of a personal finance training course for high schoolers, producing more comprehensive financial aid statements and building upon the use of MyEdu's degree management software, in which the system invested $10 million 2011.
The recommendations, some of which may require a financial investment by the board, will be considered on Thursday. Gene Powell, the chairman of the board, expressed early support in a statement. "The recommendations of the task force will give the system and our institutions a road map to diligently work toward better student advising on debt and ultimately a reduction in debt for the students studying at UT institutions," he said.