NASHVILLE, Tenn.–While student debt gets significant attention, why the lack of discussion around the root cause—the skyrocketing cost of a college education that one person called “unconscionable.”'
That question was part of a Q&A panel discussion during CU Student Choice’s Empower U Conference here. Sharing their perspectives and insights were Kelly Lapinski, an attorney with McGlinchey Stafford; Harrison Wadsworth, principal with Bose Public Affairs Group in Washington, and Scott Patterson, president and CEO of CU Student Choice, a CUSO that provides private student lending solutions to credit unions.
Here’s what each had to say about the issue of rising costs:
Lapinski: The regulatory agencies I interact with don’t seem to be focused on root cause analysis or the debt people incurred. They are more focused on once you have this debt, how do we ensure consumers are being protected. In the prior administration, there was an effort to educate people on the cost of education and the cost of debt. That effort has stepped back.
Wadsworth: That’s been left to the private sector to step in. This is the old question, ‘Is it the principal or the interest that is the problem?’ Now we’ve moved beyond that and it’s the ‘servicing,’ which is just an excuse for not addressing the problem and not focusing on the fact there is too much debt. There is a Standard & Poor’s study showing that in the past 10 years the amount of originations has reduced 10%, while the amount of debt has soared past $1.5 trillion. Originations are down, but volume is up. We are headed for a crisis. It’s hard to have a system with unlimited borrowing and the only controls being set by the colleges. We could see support for risk-sharing by colleges where colleges are required to share some of the risk with the government.
Patterson: It seems to me the federal government is holding a big stick that they are not willing to use when it comes to the cost of education. The cost of education over the last 30 years has risen faster than inflation, faster than healthcare. It’s almost unconscionable. The good news is the value of education is still there; obtaining a college degree is a very empowering thing in many people’s lives.”