Student Loan Debt at South Carolina Colleges & Universities

College students in America today are increasingly being strapped down with mounting student debt. In 2005, undergraduate students on Virginia’s college campuses had nearly $470 million in student loan debt. Students at Historically Black Colleges and Universities (HBCUs) carried 13% of this burden, or $60 million in student loan debt, although representing only 4% of the state’s total student population (See www.economicdiversity.org). Further, students on HBCU campuses had greater average annual student loan debt than the state average, although tuition on HBCU campuses was considerably lower than other campuses.

Not only are students on HBCU campuses having to take on more debt to pay for education, but they are also having to take out a disproportionately larger number of loans in comparison to the general student population. The number of loans outstanding on HBCU campuses is a disproportionate high 17,750, or 13% of the total loans outstanding on campuses across the state. This debt is being placed on HBCUs students who according to National Center for Education Statistics, add a value impact of nearly $120 million to the Virginia economy.

Student loan debt poses one of the greatest challenges to young people in Virginia (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.