Student Loan Debt of Texas Students Growing at Alarming Rate

The combination of grant reduction and rising tuition has put many Texas college students in a difficult position: worrying how to meet their student loan debt obligations. With the fall semester kicking off in universities across the state, those in college now will find themselves upon graduation carrying much larger loans than student from as recent as five years ago.

To combat this problem, the editorial board of the Houston Chronicle calls on the Senate Higher Education Committee, which is scheduled to meet this week, to set a goal to reduce the Texas students' dependence on student loans in order to afford their degrees. As part of the effort, legislators should increase the funding for both grant-aid and work-study programs, as well offer students an opportunity to obtain free or low-cost financial counseling before they take on a financial burden they are unable to discharge.

Texas college students, like the rest of the country, are racking up college debt. Nationally, combined student loan debt has surpassed the $1 trillion mark, outpacing credit card debt. With decreases in state financial grant aid, students are relying more on loans and off-campus work to cover their college expenses, forcing them to take fewer classes so they can work more hours, slowing time to graduation and leaving many students with insufficient income to cover these obligations. While student loans can provide a pathway to graduation, too much loan dependence can lead to unmanageable debt.

It is in the interest of any state to increase the quality of its workforce, and making it easier to afford a college education is one step in the process that would do just that. College graduates not only out-earn their high-school graduate peers, but they are also less likely to be unemployed, to resort to public assistance and even to get sick. Over the last several decades, Texas has experienced a real baby boom — the state now has one of the largest proportion of school children in the country. While this should be a positive development and sets the state up to develop a vibrant future workforce, nearly two-thirds of kids who are currently enrolled in Texas public schools come from low-income families.

Without any changes, this means that very soon, a large proportion of high school graduates won't have the financial wherewithal to afford to go to college — unless they take on a massive amount of debt.

Policymakers in Texas like to tout low tuition at Texas community colleges as the best financial aid program in Texas, yet community college students living near or below the poverty level still face a shortage of between $3,000 and $5,400 annually to pay for the total cost of attendance. These figures are even higher for students at four-year institutions. And our student loan default rates are soaring. Of those students at Texas' public two-year institutions who entered loan repayment in 2008, 19.6 percent defaulted within three years. Borrowers at four-year public institutions fare better, but the rate is still too high at 9.2 percent.

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