Student Loan Debt at North Carolina Colleges & Universities

College students in America today are increasingly being strapped down with mounting student debt. In 2005, undergraduate students on Georgia’s college campuses had nearly $550 million in student loan debt. The average annual student loan debt for students on North campuses is $6,773. At public institutions, this annual debt tends to be higher than average tuition and fees paid by students, suggesting that students are relying on debt to cover their basic living expenses.

Students at Historically Black Colleges and Universities (HBCUs) are being hit disproportionately hard, carrying 21% of this debt burden, or $122 million in student loan
debt, although representing only 7% of the state’s total student population (See www.economicdiversity.org). Of all the states across the nation, North Carolina HBCUs have the greatest amount of student loan debt.

This debt is being placed on young HBCU students in who according to National Center for Education Statistics, add a value impact of $175 million to North Carolina’s economy.

Student loan debt poses one of the greatest challenges to young people in North Carolina (many of whom will attend HBCUs) in closing the wealth gap and bridging the gulf of economic injustice. Unfortunately, this crisis is not occurring in a vacuum as tuition prices are rising, grant funding is lagging, student loans are unforgiving, and exploitative credit companies are also targeting students.

Responsible community leaders must take a strong position to see that the problem of student debt is addressed and this crushing millstone is removed before our young are tragically buried in a mountain of debt they may never escape.

Some Policy Recommendations:

• Institute a new interest-free federal loan that would match any Pell grant award.
  
  
• Allow student loan discharge in Bankruptcy and reform debt collection practices.
  
  
• Codify recent Sallie Mae settlement to prohibit lender channeling and enhance financial literacy.
  

Recent Policy Developments:

• Passage of the College Cost Reduction and Access Act, which reduces student loan interest rates, increases Pell grant funding, and provides for debt forgiveness for certain public servants.