Pioneer Editorial: Campaign '06: Funding role for higher ed
A federal report issued Tuesday shows that three out of every four undergraduate college students in Minnesota take out loans for their higher education and that Minnesota ranks third in the nation -- behind New York and Georgia -- in the highest average loan amount at $20,312, a figure $1,000 higher than the national average. Of that, $16,594 is with federal loans, according to the U.S. Department of Education's National Center for Education Statistics.
Also Tuesday, the U.S. Department of Education announced that interest rates on student loans will climb 1.84 points in July to as much as 7.14 percent for federal Stafford student loans and 7.94 percent for PLUS loans, which parents take out for their kids. The only escape is to consolidate loans before July 1, with rates as low as 4.75 percent, and locking their rates in.
Barring that, it's going to be even more expensive to attend a higher education institution.
The double whammy in Minnesota comes from the aftermath of the Deficit Reduction Act signed by President Bush in February which cuts government spending on student loans by about $22 billion, plus budget cuts by Minnesota to cover the $4.5 billion budget deficit of a few years ago, forcing the state to cover less and less of the cost of higher education.
Students in Minnesota, including those at Bemidji State University and Northwest Technical College, have faced double-digit tuition increases nearly every year, forcing them to take out more in loans or work several part-time jobs. Or drop out because they can't afford it.
Tuesday's revelations signal that access to higher education remains a priority in Minnesota, and should be among the issues raised during this fall's campaigning for the Legislature and the governor's office. The recently concluded 2006 legislative session helped secondary education and early childhood education in a number of areas -- but did virtually nothing for higher education. Aside from brick-and-mortar spending through bonding, the only program measure was to approve $5 million to the University of Minnesota to provide it an expanded presence in Rochester.
Minnesota takes great pride in offering access to higher education without making cost a barrier. With the level of loans going higher, and now also the interest rates, that universal access is in jeopardy.
A legitimate policy question for candidates this fall is what level of support do they believe the state should have in tuition support. The total amount spent by the state on higher education is an ever decreasing piece of the state budget pie, when perhaps a greater investment is needed to prepare the workforce for the jobs of tomorrow.