South Dakota Higher Ed Cheap, But Students Still in Debt

Just after some interesting discussion here about student loans, Republic Insider Seth Tupper points out a surprising and logic-defying news item: A survey from the Project on Student Debt finds that South Dakota's collge graduates are incurring more debt than the national average. Some key facts:

• South Dakota students who graduated from college in 2007 with debt: 81%
• Percentage of 2007 college grads in same boat nationwide: 59%
• Average debt carried by South Dakota's 2007 college grads: $22,254
• Nationwide 2007 college grad debt average: $20,098
• Average debt of grads from private Augustana College: $18,836
• Average debt of grads from public South Dakota State University: $20,804

The logic-defying part here: South Dakota ranks below the national average and median for college tuition (I'm still looking for some updated stats: here's a USA Today 2006 sample of public universities in all 50 states, some national 2006-2007 numbers, and the South Dakota Board of Regents numbers for 2006-2007 [PDF alert!]). South Dakota students supposedly have that unique work ethic that should mean they'll work harder and earn more cash to pay for college up front. How on earth could more of our students end up in debt?

SDSU financial aid director Jay Larsen isn't surprised: he tells Steve Young that one problem is that South Dakota's per capita income is low, so folks here can't afford college as easily as our neighbors. His counterpart at Augie, Brenda Murtha, notes that another problem is our stingy state government: Minnesota offers needy college students $7,000 grants. Other neighboring states have similar programs. South Dakota has no need-based grant program.

Now sure, we have one of the lowest loan default rates in the nation, so evidently our students are able to make their education pay off. But the Mitchell Daily Republic rightly notes that a big debt burden on young professionals is bad for South Dakota. Debt restricts one's job choices, limits the amount of career exploration and risk one can take right out of college. Debt also pressures fresh graduates to take the highest-paying job on the table... which all too often is going to be a job across the border in Minnesota or somewhere else that can beat South Dakota's wages.

I know any proposals for increased spending in South Dakota's 2010 budget are likely dead in the water. But South Dakota needs to look for ways to alleviate this high student debt burden. Raising wages would be the best strategy, although that's also the hardest to achieve. We could increase state funding to the universities to support a tuition decrease (the laughter you hear comes from the Board of Regents).

Or maybe, just maybe, we need to encourage students to pursue more affordable options. Maybe some of that extra debt burden is from young people going to university as if it were grades 13–16, going because that's what Mom and Dad and the guidance counselor told them they were supposed to do. Many students go straight to university after high school and drif along, waiting for some bright career idea to hit, then having to take a couple extra semesters to make up for a wasted freshman year. Many students would benefit from waiting, working for a year or two, and letting nine-to-five reality focus their vision on what they want from university. Maybe they'll realize that they don't even need university, that the job they really want to do only requires a two-year program at Southeast or Mitchell Tech.

Our wage gap neutralizes the advantages of our cheap tuition. South Dakota should act to close that gap and ease the debt burden on graduates. But students may be able to avoid that debt burden in the first place by taking time to decide whether they really want and need a university education.