APSCU responds to thenorthwestern.com editorial

A response to thenorthwestern.com editorial: Economy has dire consequences on student debt on October 20th, 2011.

We agree that excessive debt is a bad thing for borrowers, communities and economies. But a few points of order and a bit of context will help your readers better understand the situation:

• Student loan debt now exceeds credit card debt in part because borrowers are using their student loans to fund living expense purchases. The Department of Education does not limit the types of expenditures that may be made using student loans, and the government’s student loan interest rates charged are often lower than commercial bank credit card interest rates. What's wrong with this picture?
• Rising college debt may, as you say, ring like an advertisement for community college to some students, but not all. A recent report found that federal, state and local taxpayer dollars total $3 billion over five years to cover the education cost of community college dropouts. Taking nothing away from Fox Valley Technical College or Moraine Park Technical College, their graduation rates, better than most of their peers, still lag the graduation rates of two-year career college programs. Studies show that program completion rates help determine student loan repayment rates.
• Contrary to the assertion that for-profit schools are "unproven," our schools prove themselves everyday with outcome metrics like graduation and placement. Seventy percent of graduates from nationally accredited career colleges are placed in-field, even in a tough economy.
• Looking at all student borrowers, 91 percent repay their loans. Career college student borrowers represent 28 percent of all borrowers going into repayment. Of the nine percent of all borrowers who default, career college student borrowers represent 48 percent or four percent of all borrowers. This percentage of students who default represents the fact that a majority of career college students are of lower socioeconomic status: independent career college students have an annual family income of less than $40,000.

Brian Moran
Interim President and CEO
Association of Private Sector Colleges and Universities