Student debt is in the news again today (as it is pretty much everyday) and because I am doing some work on higher education costs and debt, today I will highlight what some students (and others) at UNH were drawing attention to with their pencil sculpture using more than 30,000 pencils to highlight the average debt of students graduating from NH colleges and universities.
I’ve written before about how the cost of a higher education is affected by many things. The level of tuition and fees, the volume and type of student financial aid, the demographics and characteristics of students at each institution as well as the interactions among all these factors affect student costs and debt. It’s a complicated issue that seems to generate a wealth of simple and intuitive explanations. NH policymakers debating the appropriate level of support for higher eduction are concerned with tuition prices, the efficiency of higher education institutions, the impact of college costs on access to college, graduate’s debt, and the larger impacts of all of these on the economy.
The chart below highlights what NH students (and students everywhere) are concerned about. The chart shows the average debt of graduates with debt (not all graduate s do so with debt) from UNH along with the average debt of students from “flagship” public universities across the country. Each state has one flagship university and I chose to use them here to control for the fact different types of institutions will have different characteristics that can affect average debt levels. Just as importantly, state lawmakers in NH and elsewhere decide funding levels for public colleges and are often most interested in how public higher education is affected by important issues.
The chart shows that the average debt of UNH graduates (who graduate with debt) is higher and has risen faster than the national average for flagship universities. The chart also shows that the per capita debt of graduates has been rising faster than the average debt of graduates with debt, both at UNH and nationally. The more than 70 percent rise in per capita debt of graduates is especially troubling because it is a sign that more is being borrowed by each graduate but also that more students are graduating with debt. Debt at UNH is higher but the problem is occurring everywhere. The economic and social implications of the larger amounts of aggregated student debt on each successive cohort of young people are significant.
UNH’s high relative tuition among public, flagship universities across the country is not completely responsible for the debt levels among its graduates (although it is clearly a driving factor). Demographic characteristics of student, financial aid policies, as well many other factors also play key roles. UNH takes a lot of heat for its high tuition price and some see the high tuition as a sign of UNH’s inefficiency. There are a lot of factors that help explain the rise in college costs but UNH’s high tuition isn’t readily explained by inefficiencies or “waste” compared to other public institutions. Below is one measure of efficiency I developed to compare colleges and their costs. The chart below shows the direct educational and general expenditures per degree awarded at “flagship” public institutions. It is not a measure of quality. A university could reduce its costs per degree awarded by teaching every class with 150 students or if it offered no student support services. It will also reduce its costs per degree if it offered less grant and scholarship money. The chart shows that UNH has the lowest cost per degree of any flagship institution in the country on this metric. In part it is a measure of efficiency as well as the characteristics of students because a greater number and percentage of students who graduate will also lower expenditures per degree awarded.
A couple of words about this metric. First, I use a weighted degree measure that uses a bachelor’s degree as the baseline and assigns higher values to PhD and professional degrees and lower values to masters degrees to reflect the differing time (and thus costs) related to obtaining each degree and to account for difference between institutions on the mix of degrees awarded. A university that awards medical degrees, for example, can be expected to have higher costs to educate each degree recipient (I need to examine how strongly the results are influenced by the weighting scheme). I also adjusted the dollar figures to reflect differences in the cost of living in each state. Wages, salaries and labor costs differ greatly across the country to compensate for differences in the cost of living and that should be reflected in the expenditures of public universities across the country. It isn’t done often but when comparing expenditures of similar types of college I think it is a good idea.
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