As students return to college, New Hampshire leads the nation in student debt

When freshman at the University of New Hampshire moved on to campus on Friday, Aug. 24, there were plenty of heavy things to carry—tote bins full of clothes, bags of groceries, and bulky mini-fridges. But it’s the debt that many members of the class of 2016 will take on in order to complete their degrees that may prove to be the heaviest burden.

“It’s definitely something I thought about. I did have to take out loans,” said Kathryn Bell, a freshman from Weymouth, Mass. “I had mixed feelings.”

Bell was in the final stages of moving in and her parents were helping her bring bags of groceries to her dorm. “Obviously, (debt) is a big factor with the way the economy is going,” Bell’s father, Jim, said. “We were thinking about it; the final decision (to attend UNH) wasn’t based on it, but it was a factor.”

According to a 2011 report by The Project on Student Debt, the average college senior who graduated in 2010 had $25,250 in debt, up five percent from the previous year. New Hampshire has the dubious honor of leading the country in student debt. The Project on Student Debt found the average graduating college senior in the Granite State left school $31,048 in debt. Maine came in second, with an average student debt load of $29,983. Students at the University of New Hampshire had it particularly rough—according to the report, about 76 percent of grads left the school with an average of $32,323 in debt.

Debt for New Hampshire students has increased by 36 percent from 2005 to 2010, according to the New Hampshire College & University Council, a non-profit consortium of higher education institutions in the state. Meanwhile, the NHCUC estimates that between now and 2018, 71 percent of new jobs in the state will require a college degree or post-secondary education.

With that much debt, new graduates might put off things like getting an apartment, getting married, or buying a home. “All those things get pushed back, primarily by the fact that it’s so tough to find a job in this economy. It’s a cloud over the students,” said Thomas Horgan, president of the NHCUC. He hopes New Hampshire’s current status as the state with the highest student debt and lowest funding for education is “as bad as it gets.” Higher education funding has been on the back burner for many years, Horgan said, and ever-decreasing state support will have consequences.

“High student debt and increasing numbers of students leaving New Hampshire for higher education are those consequences. Those are going to have serious implications for the type of state we are in the future,” Horgan said.

Higher college costs and a decreased state support will send students elsewhere, to states with more affordable college options, Horgan said. And once those students are gone, they’re gone for good. According to Horgan, businesses won’t be able to find the skilled workers they’re looking for. In addition, fewer people are moving into the state than in the last 50 years and the state’s native population is getting older, not younger.

“There’s a big storm cloud on the economic horizon,” Horgan said. 

But for students, faculty, and staff at state colleges and universities, the storm is already here. During the last legislative session, New Hampshire Republicans took aim at the university system. Lawmakers voted to cut state support for the state’s university system, which includes the University of New Hampshire, Keene State College, Plymouth State University, and Granite State College, by $50 million in 2011. At UNH, that meant that state funding was cut by 48 percent, or about $32.5 million. State funding now accounts for just 7 percent of the university’s operating budget. Meanwhile, about $11 million in funds for college scholarships was taken out of the state budget and put into the university system’s operating budget.

Republicans in the N.H. House of Representatives also put forward a measure to eliminate the University System of New Hampshire’s chancellor’s office, claiming that office performs administrative functions that could be picked up by the system’s board of trustees and state college presidents. The bill ultimately failed in the Senate.

At UNH, tuition for students who live in the state has increased every year since 1989, while tuition for out-of-state students has increased yearly since 1974. In an interview with The Nashua Telegraph earlier this month, UNH President Mark Huddleston indicated that the university is willing to freeze in-state tuition rates if lawmakers restore the $50 million in cuts. According to a recent study by Illinois State University, New Hampshire ranks last in the nation when it comes to state funding for higher education, with the state contributing $63.19 per person in the state to the university system.

Meanwhile, the unemployment rate for college graduates rose from 8.7 percent in 2009 to 9.1 percent in 2010. However, college grads still fared better than workers with only high school diplomas: the unemployment rate in 2010 for 20- to 24-year-olds with only a high school education was 20.4 percent.

The percentage of students graduating with debt in Maine and New Hampshire is also high. New Hampshire came in second in the rankings, with 74 percent of the class of 2010 saddled with debt; Maine came in seventh, with 68 percent.

In March 2012, Michigan Rep. Hansen Clarke introduced the Student Loan Forgiveness Act in the House of Representatives. The act would cap interest rates on federal student loans at 3.4 percent and would forgive loans if a student makes payments equal to 10 percent of his or her discretionary income for 10 years.

Horgan doesn’t believe the act will gain traction. “There’s not going to be a lot of support,” he said. “People think when you take out a student loan, or a mortgage on a house, you ought to be responsible.”

However, there are creative ways to mitigate student debt, he said, including creating incentives, such as a lower interest rate or reduced debt load, for students who graduate on time or maintain a certain grade point average.

“It’s not just a free walk away from the debt obligation, but it encourages students to be responsible and stay in school,” he said.