Four speakers — each coming from different backgrounds — gathered Tuesday at Morrison Hall to discuss trends, implications and potential policy reform regarding student debt in the United States as part of a Berkeley Forum panel.
At the forum, panelists debated on how to mitigate the effects of student debt. The forum panel included Robert Hiltonsmith, senior policy analyst at Demos; Sandy Baum, author of “Student Debt: Rhetoric and Realities of Higher Education Financing;” Seth Frotman, assistant director of the Consumer Financial Protection Bureau and Kevin Fudge, director of consumer advocacy at American Student Assistance.
Campus sophomore Hersh Bhargava, moderator for the talk, said the Berkeley Forum chose the topic due to its relevance, noting the fluctuating nature of student debt. According to Bhargava, the speakers each contributed a variety of viewpoints to the discussion, which helped the audience learn about the issue from several different angles.
Speakers kickstarted the talk by referencing in-state tuition increases at UC Berkeley, from $2,600 forty years ago to $13,500 today, according to Bhargava. Hiltonsmith explained why student debt has increased so dramatically, stating that public funding has not increased alongside rises in student enrollment at universities.
“We’ve got huge rising enrollment in higher education and public funding has not kept up with that rising enrollment,” Hiltonsmith said during the panel.
Baum noted the implications of selecting a specific pool of students to describe a larger trend with student debt. She said during the panel that she wasn’t worried about UC Berkeley students not being able to repay their debt, since they are more likely to have a higher return on their investment in their education.
According to Baum, college is a good investment for most students.
“One of the things I worry about is if you look at individual students you can get some misperceptions about how students overall are affected by student debt,” Baum said during the panel. “More and more people are going to college. … Being able to borrow (loans) actually opens up opportunities. The amount of debt has been increasing so the question is how much is too much.”
Hiltonsmith, however, countered Baum’s statement about where to draw the line of too much debt.
“In my opinion, we are already passed the point where enough is enough,” Hiltonsmith said. “Even for folks who come from somewhat well-off backgrounds, I think levels of student debt are causing them to struggle.”
Topics also included the impact of student debt on other areas of life. Forty-four million Americans collectively owe $1.46 trillion in student debt, according to Frotman.
Frotman added that the accumulation of student debt can impact financial decisions — such as buying a home or going to graduate school — and personal decisions like starting a family. Fudge said during the panel that there are aspects to student debt that aren’t visible, such as its effect on students’ mental health and distress levels.
Graduation and dropout rates were also included in the discussion, and the panelists referred to paying for college as an investment. Fudge posed a question regarding how to maximize the return on this investment because it has large implications for the future. He called the college tuition payment process “capitalism without risk for the school,” adding that universities should be incentivized to ensure students complete their education.
“We have students who aren’t the best fit for college attending and later dropping out,” Fudge said during the panel.
There was general consensus among members of the panel that the advantages of receiving a college education outweigh the disadvantages.
“If we have one mantra in America, it’s that higher education is the great equalizer,” Frotman said during the panel. “And I think we all should be really serious about this if we are forcing student debt on a sect of people who really need to finance their education through pretty significant debt loans as compared to their peers.”