A plan for student debt

An Ivy League and Cal-Berkeley policy is worth noting at the University of North Dakota.

That’s because the policy is succeeding at its stated task: ratcheting down the number of students who graduate with crushing debt. UND should pay attention, because the university has achieved a dubious honor. It’s listed among the public universities in the country whose graduates carry the highest debt.

Ivy League schools such as Harvard and Princeton pioneered the policy a few years ago. At Harvard, it works like this: If you get accepted and come from a family with an annual income of less than $60,000, Harvard is close to free. Going to Harvard for these students is something like going to West Point, as far as costs are concerned: Every student essentially gets a full scholarship, one that covers tuition and room and board.

By the way, North Dakota’s median annual household income in 2010 was about $51,000, according to the Kaiser Family Foundation. So, for half or so of North Dakota households, sending a youngster to Harvard would cost far less than sending that student to UND or any other university in the state.

If anything, those numbers understate the situation, because Harvard’s generosity doesn’t stop with families who earn $60,000 a year. Even families with incomes of up to $180,000 a year benefit. That’s because Harvard sets the family’s payment using a sliding scale, which starts at zero at $60,000 and goes to $18,000 or 10 percent of family income at $180,000 a year.

Yale, Princeton and several other Ivy League schools matched Harvard’s financial-aid formula. Furthermore, one notch below this rich-and-generous tier, one finds a rich-and-almost-as-generous lineup of other private colleges and universities, several of which have resolved to help students graduate with little or no debt.

Now, here’s the news: As of this month, these private colleges are not alone. Recently, the University of California-Berkeley joined the crowd. “As of fall 2012, the flagship campus in the UC system will cap the amount that families with annual incomes between $80,000 and $140,000 must pay at 15 percent of household income,” the Christian Science Monitor reported.

The plan “is the first such initiative at a public university,” the Monitor reported. It’ll let Berkeley better compete for top students.

More than 80 percent of UND graduates carry debt when they leave the school; and according to the Project on Student Debt, the average debt of graduates in 2010 was about $31,000. The comparable average across all colleges and universities in America is about $25,000.

Should UND — and, for that matter, other schools in the region — follow Cal-Berkeley’s lead and boost its need-based aid?

The schools should at least consider it. Because as Berkeley is showing, the policy need not break the bank. Remember, there’s one big difference between the Harvard plan and the Berkeley plan, which is that Harvard’s formula extends to all students, while Berkeley’s applies only to California residents. Out-of-state residents pay much more, and those dollars help subsidize the discounts for in-state students.

So, in Minnesota and North Dakota, the real question is this: Should the states resolve to help resident students graduate with a lot less debt? That’s not the full answer to the problem of students graduating with excessive debt. But it’s a great start, and North Dakota and Minnesota students need the help.

Tags: opinion, editorials, education, debt