Q&A: What’s Driving UNH’s High Student Debt Numbers?

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New Hampshire leads the nation in average student debt

Starting last week, and continuing today, we’ve been focusing on a report from the Project on Student Debt. Nationally, the average Class of 2010 student graduated with $25,250 in loans, while New Hampshire alumni carried student debt loads of  $31,048, on average.

Although it’s clear that average student debt in New Hampshire is high, there are some differences from school to school.  For example, University of New Hampshire students attending the Durham campus graduated with the highest debt — an average of $32,323, Dartmouth grads only carried less than $19,000 in loans.

As we noted in yesterday’s post about the relatively low debt load among recent Dartmouth alumni, high levels of student debt can have both long- and short-term economic effects.  Heavy loan burdens can prevent recent graduates from making major purchases, or even from moving out of their parents’ houses.  High levels of debt can also have a negative effect on long-term savings and economic stability.  Then, of course, if young people can’t afford a New Hampshire education, the state risks its reputation as a leader in supplying workers for the knowledge-based economy.

In a follow-up to yesterday’s Q&A post with Dartmouth’s Dean of Admissions and Financial Aid, today, we’re talking with Mark Rubinstein, the University of New Hampshire’s Vice President for Student and Academic Services.

Q: The Class of 2010 from UNH Durham campus–they carry a lot of debt…Why is it, in your opinion, that the kids at UNH are needing so much financial aid to go to a state school?

A: Well, keep in mind that the figures I think you’re looking at, if they’re blended for residents and non-residents, you’re going to get a slightly different number than at an institution that serves primarily students from its own state.

Q: Sure, but…if they’re measuring Iowa and Idaho and California and New Hampshire in the same way, New Hampshire still stands out.

University of new Hampshire / UNH Vice President for Student and Academic Services Mark Rubinstein explains why student debt numbers  are so high

A: Right.  No doubt about that.  Higher education, particularly public higher education in New Hampshire, is extraordinarily expensive by standards in the nation and even in the region.  No disagreement about that.  If you look at the federal student loan programs, particularly the Stafford loan program, given changes that were made in the borrowing limits a couple of years ago during the credit crisis, if a student is simply borrowing what the federal government guarantees over those four years, you’re looking at $25,000.  There was a time when the limits were $2,000 less per year.  So in some respects, the federal government has…increased the likelihood students will be borrowing more from what had historically been considered advantageous programs for students.

Now, additionally, you’ve got parents who are paying for a portion of the education, and in some cases using Plus [federal] loans, you’ve got students who are turning to the alternative loan market, the private loan market, to supplement.

Q: As far as your student makeup, if I were to look at this as a pie, do you know roughly what percentage would be, say, in the upper income brackets, as opposed to lower or middle?

A: If we were to look at students with family incomes, adjusted gross incomes [AGI] under $60,000, that would’ve been about 40 percent of our New Hampshire students last year, and would’ve been about 30 percent of our students from outside of the state.  If we’re talking about students, you know, between $60,001 and $100,000, about 20 percent of the non-resident students, and on the resident side, that group would have been about 25 percent.

Q: Since the economy collapsed a few years ago, have you had to cut back on your financial aid programs?  And by financial aid, I mean specifically things that help students to avoid loans, especially scholarships, grants, and to some extent, work-study?

A: No.  We’ve actually spent more money in the last several years.  The trend has always been upward, and that has not abated in recent years…Over the last decade or so, our need-based grants, the ones that the university funds, have probably just about tripled, from…the $10-$12 million range to almost $37 million last year, and over $40 million this year.  During that time, we’ve also offered a merit-based program to attract and retain strong students.  That one has actually been relatively constant.  It’s ranged between about $8 and $9 million over the last decade.  And although there are certainly motivations to want to increase that, our rationale for keeping that relatively constant has been to keep as much of the available funding in need-based programs as we could.

Q: Say I’m just your kid from your average, middle class family, adjusted gross income of about $100,000 or so. If the federal government says I’m qualified for $20,000 in aid between my federal loans and the work-study, and I look like a regular, not-too-needy person, I’m probably not going to get need-based aid from UNH?

A: If we look at NH residents last year who had AGI’s between $80,000 and $100,000, and the average grant for…students in that band would’ve been about $2,000.  If I look at students who were between $60,000 and $80,000 for their AGI, their average would’ve been about $4,000…And as the family’s income goes up, the university’s support will decline.

Q: Why it is that the University of NH in particular skews so much higher not just than other state universities, but some private universities?

A: There are a couple of factors there.  One of those is the population that we serve. And so we’re going to have perhaps a different profile than other schools serve.  It’s also the case that although the university has increased the amount of aid we’ve put in need-based programs, given the relative paucity of state funding, we’re limited in how far we can go in extending aid to students, because we risk not investing enough in the classroom experience, in the work of the faculty, the technology, the library, the other things that provide for the benefits that education is supposed to provide to students.

Q: What would a sufficient funding program for students look like?

A: Well, somewhat tongue-in-cheek, I would say a lot like Dartmouth. A couple of years back they introduced a program that students whose families had adjusted gross incomes of under $75,000 would be asked to incur…no loans.  That they would meet full documented need with grant…And Dartmouth’s ability and willingness to invest at that level in their students is probably a good model for what we would all aspire to, if we had the resources.  I think that our goal is to provide a good quality education to try and do it…at as reasonable a cost as we’re able to, and that we hope that students and their families are in a position to do that.  And we serve a large part of the state, first generation student population.  We are serving a lot of students whose families present more need than perhaps would’ve been true five or ten years ago, as a result of the economy.

Q: And what…six percent of [university] funding comes from the state?

A: As a result of the most recent budget brought to us by the Legislature [last summer], about 6 percent of our operating budget this year will be state-funded.

Q: And how much, prior to this cut, was the state giving?

A: Well, last year, the allocation to the University System was $100 million, of which the University [of New Hampshire’s] share was about $62 million.  This year, with the cut of $48 million, the University’s share is $32 million.  So we’ve lost, essentially, $30 million.  A year ago, the state’s contribution would’ve been about 13 percent of our operating budget…For years, the support for the university system has been 50th among 50 states.  And at one point, the statistic was, a 40 percent increase in our funding would have moved us up to 49th.  With this year’s cut, I haven’t recalculated how large an increase we would need to catch up to Vermont.

Q: How much does state support affect what you can offer [for financial aid]?

A: Well, most of the state’s funding cut has actually been experienced, to this point, by staff. In terms of financial aid, last year we spent about $36 million, $36.5 million on need-based aid.  This year our estimate is we’ll be somewhere around $40 million in need-based aid.  So we’ve done what we’ve been able to do to try to insulate students from the effect of the state’s cut.  But over time, we’ve got to develop a different business model.  And…I know that people will flinch at the notion of “business model” in the context of higher education, but at least some people will, we’ve got to find a way to channel resources to support our students, but also to sustain the work that our faculty and staff do for student education and student development.

Q: Is there anything you’d like to add?

A: Well, as I said, it’s not a source of pride that our students are obligated to the loan amounts that they take out.  What has been a source of some pride, for me, in the 13 years that I’ve been here, and I think the university collectively, we think this is something admirable: Our students typically have among the lowest default rates for student loans in the country.  And I realize that’s trying to salvage something good out of something that’s not great, you know, again, ideally, our students would not require loans, because the amount of support from the state would be sufficient, that it would help us keep the costs more in check.  But to the extent that our students use loans to pay for their education, they recognize the value, to be there, it’s worthwhile for them, and the fact that they are able to repay their loans is both responsible on their part, but also a good indication that the education they’ve received lends itself to the ability to make those payments.