By Michael Schneider, President
McPherson College
Washington, D.C., has been debating the student loan debt issue for years. While politicians argue—and the $1.7 trillion in student debt grows, crippling millions of Americans—McPherson College is taking action. Our Student Debt Project is a practical approach to financial aid that allows our students to pay as they go. It’s a program that blends financial literacy education, mentorship and work ethic, while reinforcing life-skills and values of personal responsibility, self-reliance and financial well-being.
And at the end of four years in the Student Debt Project, our students expect to graduate with little—to zero—debt. That’s a healthy start to their post-college lives, with the financial freedom to become homeowners, start families, and live free of the burden of college debt.
The student debt crisis is real. Nationally, one in five borrowers is in default. In Kansas, 377,000 residents now owe a combined $12.24 billion in student loans, according to the U.S. Department of Education Enterprise Data Warehouse. The total amount of student loans owed by Kansans is up nearly $1 billion dollars since I wrote my first student debt editorial in September 2019.
I am not opposed to student loans, but these totals are irresponsible. At McPherson College, we are proving that large loans are not necessary for a college degree.
By the end of the 2020-2021 academic year, more than 200 McPherson College students will be participating in the Student Debt Project, each assigned to cohorts with over 50 mentors who offer monthly advice on building a budget, setting personal and financial goals, and staying on track to achieve them. Our Career Services department assists each student in finding paid internships or other part-time work to help them pay down their debt. This year, students have already reduced their projected debt at graduation by nearly $10,000 per student. That’s more than a 30-percent reduction in debt, and many still have one, two, or even three more years of college to bring their debt lower or eliminate all of it.
And, as an added incentive, McPherson College matches 25 cents for every dollar the students earn and apply toward reducing or avoiding student loans.
I’m proud of students in the project and want to share a story from a freshman from Goodland, KS. Lola Hipp studies graphic design at McPherson College. She and her older sister are the first in their family to attend college. But the siblings had very different college experiences, and they both think their story is important to share.
Lola’s sister attended a state university but eventually returned home, not only dissatisfied with the state school’s program, but also saddled with more than $25,000 in debt and no college degree. Lola didn’t want to repeat that experience and is working to pay off her college as she goes. She is on track to owe less than $15,000 at graduation, which is half the national average.
Regarding the possibility of national student debt forgiveness, Lola says, “It’s nice for people who have already graduated, and I hope it comes through. But I’m not going to be banking on someone else paying down my loans. I’m proud of myself for working while going to college. I don’t want to rely on the government to pay my debt for me.”
As early as 1996, Congress recognized the issue of rising student debt with the Student Debt Reduction Act of 1996. The name of the act is a little misleading as the act just focused on reducing loan origination fees for high-need students—which is a good idea, but it is hard to see the impact today. It’s been 25 years since this act was introduced, and there have been a handful of other debt reduction acts in Congress since; however, the problem remains unresolved.
We can’t afford to wait for a solution from Washington. Can you?