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Is college completion really the root of the student debt crisis?

Students chided President Michael Crow's remarks, but experts agree that completion rates are the real problem


ASU President Michael Crow talks during an interview at the Fulton Center in Tempe, Arizona, on Monday, March 18, 2019.

ASU President Michael Crow called for the University and the legislature to direct their focus to student completion earlier this year, calling the student-debt crisis a "misnomer."

While some student leaders decried that notion, studies and experts agree that poor student completion rates within higher education are responsible for an outsized portion of the nation's skyrocketing student debt. 

Crow originally made the comments during his annual update before the Senate Higher Education and Workforce Development Committee in January 2019.

“People sometimes talk about the student debt crisis,” Crow said. “That’s a false misnomer, there is no student debt crisis. There’s a student completion crisis.”

In a meeting with The State Press earlier this month, Crow clarified his previous comments and said there was in fact a student debt crisis, adding that both issues were interrelated. 

“I didn’t say there was no student debt crisis at all, I said there was another more important crisis, and that crisis is student completion,” Crow said. “If you have $40,000 in debt and you don’t have a certificate or a college degree, then your ability to have the revenue necessary in your own income to help retire that debt moves away.”

Related: ASU overhauls fee structure in new tuition proposal

Despite students' complaints and criticism, studies and experts agree with Crow: The outsized and crippling debt held by students in America is held by those who don't finish their degrees.

Michael Itzkowitz, a senior fellow with the Third Way, a Washington D.C.-based think tank, said that the majority of debt is held by those who have made an educational investment, but have not followed through enough to get a return on that investment. 

“They've made an educational investment but have gotten nothing in return,” Itzkowitz said. "And that's why we see statistics, such as student borrowers who drop out with debt and no degree are three times more likely than graduates to default on their loans — and defaulting on loans is really the worst of the worst situation for students.” 

Related: ABOR: Arizona graduates hold less debt than national average

Itzkowitz said that while the student debt crisis is severe, it is misunderstood and poorly portrayed.

“We shouldn't necessarily be focused on the graduate student who has accumulated $100,000 over time, but will then go to make hundreds of thousands of dollars through their first starting salary as a lawyer — we should be more focused on the students who start college, but ultimately don't finish," he said. 

Even with all current revenue streams from tuition and the state combined, the University is still operating at a loss on an annual basis of $225 million, Crow said before the committee. 

Related: University tuition increases, overhaul receive criticism from students

Student representatives echoed Crow's concerns, and said the University had programs in place to help students to completion.

Aly Perkins, the President of Undergraduate Student Government Downtown and a senior studying public service and public policy pointed to programs such as counseling, health services, tutors and first year success coaches. 

"These resources help students stay in school and finish their degrees by offering support based on a student’s specific needs," Perkins said in an emailed statement. "That is one of the reasons student government works hard to advertise these resources; you never know who may need them, and usage could mean the difference between dropping out or graduating." 

"Once a month, the student regents and ASU, NAU, and UA student leadership convene to discuss ways that we can increase retention and better support students across the state," Perkins said. 

Perkins also said that what Crow said about completion rates made sense. 

"President Crow often mentions that the value of the degree pays itself off over time," she said. "As I watch ASU increase in state, national, and global rankings, I think he definitely has grounds to claim this," Perkins said. 

But some student groups such as Young Democratic Socialists of America at ASU rebuke this argument, saying that debt is an issue that prevents people from completing college.

While some believe a degree might make it easier to pay off debt, Jake Phillip Morris, a member of Young Democratic Socialists of America at ASU and a sophomore studying earth and environmental studies, said that  many students can’t bear the debt burden enough to even make it through their first year of college. 

“They can work on (student completion and student debt) at the same time,” Morris said. “There are tons of students who are dropping out their first year, at least partially due to debt. Once you're in the hole, you can't climb out."

Crow said that the debt could be paid down due to the University's high return on investment, which he said is 12 percent on average.

"We know that (return on investment) raises from seven percent for someone trained in education to twenty percent plus for someone trained in engineering, but the average is twelve, so we know that if you complete you are going to be okay," he said. 

All parties agree that while the University could increase its four-year graduation rate, which currently sits at just over 54 percent as of 2014 according to the University, a sizable amount of the blame falls with the legislature, where education funding has been cut year after year since 2008. 

“Well, don't get me wrong, I don't lay the entirety of the problem at the feet of President Crow," said YDSA Chair Tanzil Chowdhury. "The legislature definitely is corrupt and definitely needs to be paying much more into our education system."

Itzkowitz said there are crises of both debt and completion.

Students who don't complete their degrees "are the students who are most likely to be struggling and the least likely to be able to pay down their educational debt," he said. 

"They are also the students that are most likely to default on their students loans, which leaves them in the worst of the worst situation, so in that sense it is a real crisis, but it's a crisis that's different than what is being portrayed.”

Correction: A previous version of this story incorrectly identified the major of Jake Phillip Morris. The story has been updated to reflect his correct major.

Clarification: This story has been updated to clarify a paraphrase of one of Jake Phillip Morris' quotes.

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