APSCU Statement on CNBC’s “Price of Admission: America's College Debt Crisis”

Harris Miller, President and CEO of the Association of Private Sector Colleges and Universities (APSCU), released the following statement about CNBC’s report “Price of Admission: America’s College Debt Crisis,” which airs tonight:

“Student debt is an important issue that deserves our attention as a nation. The bigger question, however, relates to America’s position in the global economy and, as President Obama has described the challenge, the need to reclaim world leadership in the percentage of adults with a college credential. How do we pay for expanded access and better outcomes? In the past, taxpayers have subsidized higher education through providing money directly to institutions-- budget appropriations, tax exemptions, research grants--and through students by the use of guaranteed loans and grants. Private sector colleges and universities only get this subsidy indirectly through the students who choose to attend their institutions, while non-profit schools get both direct and indirect taxpayer support. As economic pressures mount, the public subsidy has been reduced, forcing students to pick up a greater share of the cost. While this shifting of funding responsibility from public to private hands is often a challenge, particularly for those students with limited resources, the need to gain postsecondary education grows stronger, not weaker. While we focus on solutions to help students better manage debt, let’s not miss the big picture—the undisputed and significant return on investment to students, families, communities and our economy of higher education.”

Private sector colleges and universities help more than three million Americans every year improve their education and acquire specific career skills. These students select private sector colleges and universities because they get the type of education they need to compete in a tough global economy.

Miller also offered a response to charges made by some PSCU critics:

Here are the facts:

Myth: Enrollment in private sector colleges and universities (PSCUs) is a cause for concern.
Fact: Rather, unemployment in America is a cause for concern. There are 15.1 million unemployed workers—almost 10% of the workforce, a number that has remained stubbornly high. Americans realize the urgent need to acquire skills, get jobs and jumpstart the economy.

Myth: Student lending is comparable to the subprime mortgage crisis.
Fact: An overheated housing market, fueled by irresponsible behavior on the part of borrowers and lenders, led to the mortgage lending crisis. In contrast, no one questions the need for more college-educated workers to grow jobs and the economy. The value of a college education increases over time, unlike the speculative bubble of subprime mortgage lending.

Myth: Private sector colleges and universities have a 44% default rate, while educating 10% of students and receiving 23% of federal loans and grants. Something’s wrong.
Fact: PSCU students receive 23% of federal aid, while educating 25% of all students eligible for needs-based federal grants. PSCUs simply educate a higher percentage of needs-based students than do other sectors. A majority of PSCU students fall within 200% of the poverty line. It is not surprising that those with the fewest resources have the most difficult time meeting their financial obligations, especially in a difficult economy.

Myth: PSCUs do not provide quality education.
Fact: Private-sector colleges and universities are accredited institutions of higher learning. Education quality is assured through internal assessments and external audits. Nationally accredited PSCUs place 70% of their graduates, which is a testament to the quality education received.

“CNBC is right to study debt, but we need an approach that also focuses on 1) postsecondary access, and 2) the overall benefit to the students, the taxpayers, and the economy of enabling students to take on reasonable amounts of debt. If we want to see more Americans gain access to higher education and the opportunities it provides, we must ensure that private sector colleges and universities continue to play a critical role in educating America’s workforce, and that our schools have a level playing field with traditional colleges and universities,” Miller said.