Penn State

Pennsylvania ranked 5th worst in country for student debt

Financial website WalletHub calls Pennsylvania the fifth worst state for student debt. Gov. Tom Wolf’s office says the problem is still a priority. Penn State reaffirms President Eric Barron’s access and affordability goals, blames state funding.
Financial website WalletHub calls Pennsylvania the fifth worst state for student debt. Gov. Tom Wolf’s office says the problem is still a priority. Penn State reaffirms President Eric Barron’s access and affordability goals, blames state funding.

When you think about going to a university, thinking about college loans is a big part of the picture for many people.

It’s not a great part for Pennsylvanians. On Wednesday, the Keystone State was rated the fifth worst in the union when it comes to student debt.

The ranking came from financial website WalletHub. It pointed to Pennsylvania’s 47th place finish for the average accumulated student debt, 45th for proportion of students with debt, 41st for student job availability, 40th for the number of student loan borrowers older than 50, 34th for overall unemployment rate, 25th for student debt as a percentage of income (adjusted for cost of living) and 19th for student loans past due or in default.

Pennsylvania came in behind Maine, Oregon, West Virginia and the dubious gold medalist for worst student debt, the District of Columbia. Only students in New Hampshire and Delaware have more debt. Only Idaho and New Hampshire have a higher percentage of debt, with Pennsylvania tied with Minnesota and Wisconsin.

“It’s a real problem, and the governor understands that,” said Jeffrey Sheridan, spokesman for Gov. Tom Wolf.

Wolf faced off with the state legislature in a nine-month battle of wills and budgets from July 2015 to March 2016. The governor’s budget, and his oft-touted talking points, pointed toward education as a top priority. He not only proposed more money for basic education, but increases for secondary, including a plan to restore massive cuts made to Penn State’s appropriation under the previous two governors.

“We need to make sure that higher education is affordable for middle-class families across Pennsylvania,” Sheridan said.

Anna Griswold, assistant vice president for undergraduate education and executive director for student aid at Penn State, knows too well how much debt a student can incur while pursuing a degree. The average for a Penn State graduate is about $37,000.

“I think one reason Pennsylvania comes up in that higher debt level is that it’s driven largely by the fact that we are a state with one of the highest number of private higher education institutions. Those are all high-cost schools,” she said.

There are more than 100 colleges and universities in Pennsylvania according to U.S. News and World Report, and that doesn’t take into consideration the two dozen Commonwealth Campuses of Penn State. They range from Franklin and Marshall, Bucknell, Carnegie Mellon and Penn in the $50,000 per year range to Pennsylvania State System of Higher Education schools like Lock Haven and West Chester around $9,000.

A Penn State education costs about $17,000 a year, depending on which campus a student attends, for a total topping $70,000 over four years. That makes that average student debt only about half of the cost of a degree, and that doesn’t count room and board, fees or books.

President Eric Barron has been addressing that cost since taking the helm in 2014, making access and affordability one of the pillars of his administration.

“I think that the university is looking at a number of initiatives that encourage all of us work with students to see they can graduate with their degree in the shortest time possible. That eliminates another year of borrowing,” Griswold said.

In the 2015-16 school year, Barron implemented a tuition freeze. Eight of the commonwealth campuses will see a similar freeze for the coming year, with remaining campuses seeing a 1.25 to 2.29 percent increase.

“We are very similar to the average debt for students who attend private schools,” Griswold said.

Penn State has been criticized for its price tag, second only to private Northwestern in the Big Ten. It is one of the more expensive public institutions, but it isn’t entirely public. Penn State is not a state school, but a state-related one, like Temple, Pitt and Lincoln. Temple costs a little less than Penn State at about $15,000 while Pitt comes in a touch higher at about $18,000.

Because of that odd hybrid status, the state-related schools don’t just have a budget set by the state like the PSSHE schools; they receive appropriations from the state. Penn State’s general appropriation from the state was $230.4 million for the coming year. The budget was $5.1 billion.

“The more states contribute, the less students need to borrow,” said Griswold. “Pennsylvania is also one of the states with lowest support for higher education.”

Barron has complained of that disparity before. Some of the university’s Big Ten brethren get almost twice as much in subsidy from their states.

“Student debt is always something that is of concern,” said Jennifer Kocher, spokeswoman for state Senate Majority Leader Jake Corman, R-Benner Township. Corman was the leader of the opposition in Wolf’s budget battle, making his priority a balanced budget with an emphasis on addressing the state’s looming pension crisis, something that also impacts education.

“We want to do everything we can toward making a quality education is accessible to all who want it. With that in mind, the Senate added additional funding for higher education during this year’s budget process,” Kocher said.

Penn State did see a 2.5 percent increase in its general appropriation, plus other programs, something the university heralded as a “welcome development.”

While the increase was not enough to head off the tuition increase for all in-state students, it was enough for the university to continue some of those affordability programs, including Plan4 Penn State, an initiative aimed at helping students stay in school, reduce their borrowing and graduate on time.

Lori Falce: 814-235-3910, @LoriFalce