A legislative committee in Jefferson City has been examining the issue of student debt.
A recent report by consumer credit agency Experian shows the problem has arguably reached epic proportions.
Over the last decade, college-loan balances in the United States have jumped more than $833 billion to reach an all-time high of $1.4 trillion. The number has surpassed credit card debt and continues to climb.
There’s even a website, SeekingArrangement.com, where students are known to seek “sugar daddies” to help pay-off loans in exchange for companionship.
The Institute for College Access & Success compiled information from 2015, the most recent year for which data were available, and determined the average student loan debt in each state. Missouri came in sixth highest, with an average debt of $27,480. 61% of Missouri graduates have student loan debt.
The legislature’s House Subcommittee on Student Debt Relief held a hearing Monday in which a discussion of challenges and possible solutions took place.
Committee members have learned through previous testimony that students who struggle academically are prone to worsen their debt by extending their time spent in college.
Republican Representative Curtis Trent of Springfield wants to look at getting students who are behind in certain courses up to speed before entering college.
“So that when they do get to college, if they need remedial algebra or they need a remedial whatever, they were able to get those classes while they were still in high school, so that they’re not trying to catch up while they’re paying college tuition rates,” said Trent.
House Democrat Gretchen Bangert of Florissant noted the single biggest stumbling block for many students is the Algebra 1 requirement, which causes some kids to forego college altogether. She thinks it would make sense to offer alternative math courses.
“If you were going into a particular field, you wouldn’t need Algebra 1,” said Bangert. “You could take a different type of math course that would be more defined toward what your major was.”
Algebra is such a big barrier for certain students that the Los Angeles Times reported in July that California Community Colleges is looking at doing away with its algebra requirement for non-STEM majors.
Bangert thinks finding a solution to the algebra hurdle would cut costs for students who would otherwise spend additional years accumulating loan debt. “If you’re taking three or four years to pass Algebra 1, of course you’re going to be in college now, seven or eight years rather than just the four.”
Only three of the six lawmakers on the Committee were present for the Monday morning hearing on student debt, along with fewer than 10 stakeholders who chose to attend. Still, ideas over how to tackle the spiraling problem were bandied about.
Bangert noted that student loans are distributed every semester, and suggested dispersing the funds in smaller chunks more frequently could help students learn the budgeting process.
“Instead of getting your $10,000 each semester, you get $2,000 a month,” Bangert said. “And then you’re paying those bills monthly, so you’re learning a little bit more about the consequences, and that those bills are coming due that quickly, and how are you going to budget that money.”
Further, Bangert suggested counseling students on managing their student loans could be helpful in addressing the debt issue. She mentioned her own kids in college that have friends who’ve used leftover loan money to take a trip rather than save it for future expenses.
A study released last year by the University of Missouri would seem to back up Bangert’s idea. It showed that students who develop relationships with financial advisers make better decisions about education loans.
As far as coming up with a concrete plan to address student debt, the House committee is homing in on legislation to create a work study program.
Committee chairman Allen Andrews, R-Grant City, says it would let businesses reduce costs by allowing them to offer on the job training as a portion of wages. He says students would benefit from work experience.
“This would provide a young person, or anyone obtaining a degree of higher education the ability to get into the workforce, get real life experience, because a lot of times real world experience is different than book knowledge,” said Andrews. “And so, it’s a perfect blend to help everybody involved.”
The second term House member thinks a work study program could be a useful tool for students to make their loan dollars last longer. “I think the work study program is just one that really makes sense. Will it eliminate student debt? Absolutely not. But it’s a step in the right direction.”
Andrews didn’t say if work study legislation would be crafted in time for the upcoming legislative session, which starts in January 3rd.
The federal work study program offers subsidies for students to find part time employment if certain conditions are met.