Student debt and default rates on the rise in Kentucky
FRANKFORT– When it comes to Kentucky’s universities, the theme is up.
According to a study by the Legislative Research Commission, the total cost is up, median student loan debt is up, and the student loan default rate is also up.
Aaron Thompson, the president of the Kentucky Council on Post Secondary Education explained, “Since 2009, when the state was paying about 67 percent of the share, and right now you’re paying about 31 percent of the share, so that’s a huge difference.” He added, “Over the many years, we’ve mitigated tuition, only to cover about 67 percent of the need. What we’ve done, even with student debt, we’ve mitigated that to the average, even when Kentucky has been one of the few states not to put state dollars in by comparison.”
A graphic posted by Thompson shows that in the past 10 years, the higher education financial responsiblity has almost flipped.
This is a hard one to post, because it affects so many Kentuckians: our students, our faculty, our leaders, our uneducated and, really, the public good of our state. All I can say in response is, #KyHigherEdMatters. pic.twitter.com/VwLe6XcEWV
— Dr. Aaron Thompson (@cpepres) May 9, 2019
Thomson says they are trying to be proactive about student debt. He admitted, “We probably haven’t done a good enough job to make sure that we’ve done the kind of real financial literacy, I argue. That we tell them, if you borrow this amount, you’re going for this credential, please understand, if you don’t get it, you’re in trouble. If you borrow this credential, you borrow this amount, you’re borrowing too much for this credential. So, we’re changing the way we’re thinking and talking about financial literacy.
Democrat, Senator Reggie Thomas questioned if the state is in part to blame for student debt. He questioned people from LRC, saying “You noticed that debt had been flat from 2001 to 2008, and then we see a significant jump from 2008 to the current period. You said it was about a 54 percent increase.”
Thomas then asked, “Do you think that has anything to do with the fact that since 2008, this state remains the only state in the nation that has continually cut higher education over those 11 years.”
Republican Representative Rob Rothenberger expressed concern at student debt levels when many students are taking dual credit classes in high school and there are repayment offers. He said,” I’m really curious why the debt load seems to be going up when we have more students coming out with more college credit at the high school level than we ever have in the past.”
Rothenburger added, “I know your report probably didn’t get into that level of looking into it, but I’d be really curious to see why the debt loads continue to go up when we have more students coming out, and on the other side we have more employers in Kentucky that are offering free tuition if you come to work for us.”
The most recent years weren’t available for the presentation, but Thompson says in the past year his office has made promoting those opportunities a priority.
Currently, Kentucky’s per student funding is about 27 percent lower than it was in 2008, when adjusted for inflation.
Thompson argued that has an impact more far reaching than just higher education. He explained, “If you look at people who are in our prisons, we’re spending money on, or those that are on Medicaid, higher education is the direct variable that gets them out of that situation. So, my argument is that, lets at least find some money, and we’ve done the things that you all have asked us to do, performance based funding, and a variety of other things. Lets find some money to invest in a solution, because I understand we have to invest in the problems. But if we don’t invest in the solution, my argument is problems will escalate”
Thompson said he does hope to get some funding back in the next budget, because he said university budgets are already about as tight as they can be.