Photo: Tulane Publications (flickr)
Indiana college students graduate with an average of $27,000 in student loan debt — a $10,000 increase over the past decade.
President Obama and Congressional leaders are seeking a legislative compromise to ensure students do not owe even more in interest on their federal student loans. If they do not reach an agreement, student loan interest rates would automatically double to 6.8 percent on July 1.
StateImpact Indiana’s Kyle Stokes spoke to Mary Jane Michalak, associate commissioner of the state’s Commission for Higher Education, on the potential rate increase’s impact on Indiana students.
Here are some highlights from the interview:
Stokes: How would a rate increase impact what the Commission for Higher Education is doing?
Michalak: The Indiana Commission for Higher Education, the Division of Student Financial Aid oversees the state scholarship and grant programs, so whatever we provide in scholarship and grants, the student does not have to take out in debt. So our programs work in conjunction with student loans and institutional financial aid.
If students are going to have to take out debt and are going to have to pay higher interest rates, the way it affects our programs is not directly, but students may decide not to go to college at all because the amount of financial aid they receive from the state or the federal government may not be enough to cover all of their needs.
Stokes: The Indiana Commission has set some pretty ambitious goals for college completion. It would seem that student debt is tied to that.
Michalak: It is absolutely. In fact, what we’re pushing for now is more completion across the state. The commission’s goal is to get 60 percent of adults to complete college and have some type of certification by 2025…Now what we’re looking at is a fifth year of college will cost a student about $50,000 more in lost wages, additional tuition and fees.
Our state financial aid programs are only for four years, so students who don’t complete in four years are automatically going to take on more debt than their counterparts who do complete in four years.