Report: Michigan is high on price of college degrees

College graduates in Michigan and elsewhere are rightly anxious about their future job prospects -- an anxiety only heightened by the piles of debt so many have accumulated while on campus.

Erin Dillon, senior policy analyst for Education Sector and co-author of a new report highlighting the relationship between obtaining a college degree and acquiring student debt in this country, wrote, "(I)t's taking more and more debt to produce each degree." Dillon's report differs from a standard compilation of debt load (such as this) by comparing borrowing to number of degrees awarded.

Michigan State University President Lou Anna K. Simon says MSU is dedicated to helping students obtain financial literacy, even while financial aid websites such as and report the average 2011 American graduate finished school with approximately $27,200 in debt.

Education Sector pegged MSU's three-year debt to credential ratio at $18,913, about 16 percent higher than the national average of $16,247 for public, four-year universities. Ratios for public universities in Michigan ranged from a low of $11,292 for the Universityof Michigan Ann Arbor to a high of $28,028 at Wayne State University. Dillon and co-author Kevin Carey found that Michigan

was a top 20 state for costs for public universities.

"The average Wayne State University student’s debt upon graduation is $20,250, which is less than the national average of about $24,000, and much less than the Education Sector’s new borrowing to credential ratio," said WSU spokesman Matt Lockwood. "That said, Wayne State is striving to both improve its graduation/retention rates -- which have a bearing on the ratio -- and minimize student debt. ... Wayne State’s commitment to minimizing student debt is demonstrated by the fact that its tuition is 13th among Michigan’s 15 public universities and it has nearly tripled its financial aid in the past three years."

In East Lansing, Rick Shipman, financial aid director at MSU, says the average federal Stafford loan debt of graduating seniors at his school has been increasing steadily, from an average of $17,100 in 2007 to a whopping $21,818 in 2010. That's more than five times the rate of general inflation for the period.

“In terms of MSU’s activities geared toward managing debt levels, all students are required to participate in loan counseling before they receive federal loan funds and again before they graduate,” said Shipman. “The counseling is a bit different for those borrowing for the first time versus those leaving school, but essentially both versions help students understand their rights and responsibilities as borrowers. There is a focus on default aversion and the many programs provided to assist students who are unable to make standard monthly payments.”

In addition to counseling, MSU’s Office of Financial Aid delivers workshops to populations especially "at risk" because of socioeconomic background or high debt histories. These workshops aim to help students understand how they can minimize borrowing and manage their repayment process, regardless of their employment conditions after graduation.

Yet, some schools are taking even more drastic measures than Simon’s initiative. According to The Chronicle of  Higher Education, Virginia’s Tidewater Community College “won’t disburse federal loans to students until they submit a detailed budget with their loan-repayment plans.”

Jennifer Harpham, the college’s financial-aid director, stipulates that the institution’s new policy “wasn’t a response to irresponsible borrowing by students,” but instead a “part of the college’s efforts to help students plan for loan repayment.”

Dan Bock, a 31-year-old Lansing-based environmental lawyer, will be the first to admit that his route in pursuing a higher education was anything but traditional. As the son of a school principal and graphic designer, Bock grew up in a comfortable household, but he still decided to attend a community college after high school in order to offset some of the financial burden of attending a four-year college right off the bat.

“I did my first two years of undergrad at a community college and later transferred to the Universityof Michigan,” said Bock. “Even though I received some scholarship money during undergrad, I would regularly work between 20-35 hours a week in order to alleviate some of the financial stress school entailed at the time. I was basically working to finance my education.”

Bock later received a full scholarship to the Michigan State University College of Law, where he went on to study environmental law. Yet again, his decision to go with MSU versus other programs, wasn’t necessarily traditional … or immediate. Bock also received admission toVermont Law School -- a private institution with one of the leading programs in the country when it comes to environmental law -- leaving him with a somewhat grappling decision to make.

“One of the main factors in me choosing to go with MSU was money,” explained Bock. “Of course, I was beyond grateful to get a full ride to law school, but the downside of that was that I could have theoretically gone to a school with a better environmental law program -- like Vermont Law School -- had finances not been such a huge issue.”

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David Waymire
Thu, 11/03/2011 - 9:00am
Unfortunately, no mention of the role of continual cuts in state support for higher education or the quality of Michigan's universities in this piece about student loans. 1. Michigan is in the bottom 5 in the nation in per student support of higher education by state dollars. 2. Michigan's public universities are considered among the very best in the nation...far better as a group than almost any other state you can think of. mention of quality in this discussion.. That's useful perspective for the comment that " Michigan was a top 20 state for costs for public universities." As someone who works with the public universities in Michigan, I'd say our state is lucky to have the great schools we have for the costs incurred. I'm surprised we are not higher on that list, given the value involved. And I'd also observe that the fastest way to lower our quality is to continue to cut funding -- state and personal, through tuition -- that seems to be high on the agenda of our Legislature.
Thu, 11/03/2011 - 1:28pm
To bad no mention of the degrees these people are getting and their employablility after graduation. I wonder if there is a difference in the ability to repay the debt based on the degrees they are earning. Why would a univeristy being will to encourage students going into debt for a degree that is unlikely to generate sufficient to pay for the debt?
Bob McElroy, MD
Tue, 11/08/2011 - 1:54pm
Since moving to northern MIchigan in retirement from southern Indiana I have been appalled at the tuition increases forced on Michigan's universities by the failure of the legislation to provide adequate financial support. In 2012 donations to colleges and universities are no longer tax deductible. The state of Michigan has utterly failed it's young people in forcing high levels of indebtedness to get a college education. An extension of the undergraduate cost is the cost of a medical education---the state of Indiana supports it's medical school to the tune of 5% of it's cost. High levels of indebtedness lead young men and women to make distorted decisions in medical careers which has been a significant factor in the escalating cost of medical care. University education in Europe and Scotland is basically free and deemed a public good.