Is College Worth It?

With Minnesota student debt ranking 5th in the nation, graduates worry that the benefit of their degrees may come with too steep a price


illustration by doug chayka

On a sun-drenched early-autumn afternoon, the incoming freshman class of the University of Minnesota’s Twin Cities campus arrives from around the state and beyond. These newly launched adults exude possibility and optimism as their parents help them empty out minivans with their dorm fridges and IKEA furniture. The new students document it all on social media, phones at arm’s length to take selfies of their excitement—and looking a little deer-in-the-headlights in between shots. If you’re in the right place, right time, you might even spot the U’s president, Eric Kaler, known to lug a box or two into one of the campus residence halls.

If you came of age in decades past, this isn’t the U you once knew. It’s made a deliberate shift in the last decade-plus to stake out turf as an elite public institution in the company of UC Berkeley or the University of Virginia. Today’s students are increasingly pulled from the academic elite in the state; gone are the days of the General College and near-universal access, as well as the sort of meandering, multi-year tracks that used to represent the college experience (in 1992, the U’s four-year graduate rate was a mere 15 percent; in 2012 it reached 44 percent).


At the same time, in-state tuition is more than double that for the 2002-03 school year, and five times what it cost a decade prior. Since 1985, college tuition nationally has risen more than 500 percent, outpacing even skyrocketing health-care costs. This generation of students is staring down astronomical post-secondary tuition hikes—on average, yearly tuition at American private colleges and universities now tops $30,000, with the average for state schools just over $9,000 (it’s more than $12,000 at the U). More than ever, young people have to borrow to make it work—and borrow a lot. Indebtedness for Minnesota college graduates is the fifth highest in the nation, recently having hit an average of $30,000 for those with debt; it’s estimated that total student debt in the country tops $1 trillion.

Some see educational debt as the next bubble to endanger the economy after the housing collapse that triggered the Great Recession—in fact, the total sum of student loans owed now tops American credit-card debt. And the old strategy of combining work-study with grants to limit borrowing isn’t working like it used to.

“What we’re seeing with the highest debtors is unbelievable,” says Darryl Dahlheimer, program director for financial counseling at the nonprofit Lutheran Social Service. “It’s a lifelong maiming of their finances.” One in three holders of student debt today is 90 days late or more on their payments. “Once you default, it’s a matter of cascading penalties,” he says. “It’s a forever escalator down to pain.”

Yet look at the qualifications for just about any middle-class job: They start with a bachelor’s degree. But for many, that degree today evokes a new form of indentured servitude, often cited as a reason for delaying buying a home, getting married, starting a family. And for those who pursue doctorates or professional degrees, the debt burdens can be, on average, more than two to almost five times greater. It’s a question that no one in an upwardly optimistic culture wants to ask: Can we continue to expect our young people on the cusp of adulthood to shackle themselves for what was, a generation ago, available at a reasonable cost to anyone in a position to work for it?


photo by tj turner

Where’s the Money Going?

U president Eric Kaler’s spacious office is in Morrill Hall on the main Twin Cities campus. Deliberate and thoughtful with his words, he communicates a sense of gravity that befits his high-salaried executive position, along with a veneer of cool remove that suggests years spent analyzing microemulsions and molecular reactions as a chemical engineer.

“You can spend a lot more than that for a new car if you want to,” Kaler points out in relation to that $30,000 average student debt in Minnesota (among the two-thirds of students overall who graduate owing loans). He cites the $1-million-plus that the average college graduate stands to earn in a lifetime over someone with only a high-school diploma—the foundation of the education-as-ticket-to-the-middle-class argument.

Kaler has been on the job since 2011 and it hasn’t always been a smooth ride. With his salary north of $600,000, his administration has been playing defense in public perception against charges that it’s bloated and overpaid—especially after a 2012 Wall Street Journal article that singled out the U as a supposed exemplar of waste nationwide, citing such stats as nearly one employee for every 3½ students.

The reality wasn’t so simple, and numbers can be malleable. The article used statistics from federally required employment data that had no national reporting standard. A complicated reclassification for federal reporting purposes made it look as though the U had added 1,000 jobs in non-teaching administration over the course of a decade. “I can guarantee you, we didn’t back up a bus and add 1,000 administrators,” says Lincoln Kallsen, the U’s director of institutional analysis.

But there are other numbers that fuel critics of Kaler’s administration. A 2013 op-ed by former Minnesota Governor Arne Carlson cited numbers including Kaler out-earning the current governor by nearly half a million bucks, 17 members of the U administration pulling down more than $300,000 a year, and 81 employees earning more than any state cabinet-level secretary. Kallsen counters that these numbers effectively reflect a drop in the $3.7 billion bucket that is the U’s annual budget. “You could fire the president and every vice president and you wouldn’t get to the first $15 million,” he says.

That number—$15 million—reflects a commitment by Kaler to cut $90 million in administrative spending over a cumulative six-year period through a variety of measures including attrition, restructuring, and workforce cutbacks. These annual $15 million sums aren’t actually reducing the bottom line; they’re funds transferred from administration to “Mission” activities of teaching and research, and the numbers represent only around 1 percent of the U’s state allocation and tuition budget. Still, some at the U say even this minute belt tightening comes at a cost.

“I’m not sure we have $90 million to shift and still do what the public expects us to do,” says Rebecca Ropers-Huilman, a professor of higher education who has recently served as chair of the U’s faculty committee. “The public expects us to be a top research university that is internationally recognized and good for Minnesota.”

Yet Carlson’s argument was less about specific financial impacts than the principle involved: Work in education has traditionally had a strong element of public service, with different scales and expectation for compensation and pay than for-profit business.

Kaler, for his part, defended his salary in a recent Star Tribune article by saying, “It’s a $3.5 billion business, and I’m the CEO of it. I’m paid in line with people who have similar jobs.”
It’s an interesting use of language, to say the least—equating a land-grant public university to a corporation. It’s hard to imagine any company raising its prices so much over the last 15 years without incurring calls for consumer relief. In March of this year, Target Corporation, Minnesota’s largest for-profit employer, deemed its own bureaucratic structure bloated and inefficient, and enacted painful job cuts to address  it—firing 1,700 employees, about 13 percent of those at its downtown Minneapolis headquarters.

Kaler acknowledges earlier comparisons he’s made between the public university and the American auto industry, with both needing to retool in the face of international competition. But he also allows the analogy isn’t perfect. “I’m not sure anything is untouchable, but some areas are easier to move than others,” he explains. “We have unions and tenured faculty, and it’s not as easy to reduce as it is for a private company.”

But if we’re going to look at the university as analogous to a corporation, we’ve definitely moved the goal posts from a generation ago. Critics can point to football coach Jerry Kill’s $2.3 million average annual compensation (through 2019) and the U’s sparkling new $300 million TCF Bank Stadium, but the U (like other public universities) points the finger away from itself—and to the state government.


photos by tj turner

Less From the State, More From the Students

If you went to the U in the 1970s, you attended a school funded by nearly 50 percent state money. If you happened to start in the bicentennial year of 1976, your yearly in-state tuition was $663 (roughly $2,750 in today’s dollars). If you were like a lot of young people back then, you might have taken a quarter off here and there, changed majors a couple of times, and generally luxuriated in what was considered a public good—and you could have covered your expenses with a part-time job.

Those days are gone. State spending nationwide for higher education has plummeted nearly 40 percent since 1980. In 2003, the U was hit with a $185-million cut. Then-president Bob Bruininks the next year led a plan called “Transforming the U.” Tuition was going up (14 percent-plus each year between 2002-05), financial aid would be increased, and expectations for the student body heightened. In 2015, tuition supports 25 percent of the U’s operating budget, while state funding is at 17 percent. The need for corporate grants for research income has also been a result of lower government contribution.

Kaler calls the U of M “the most economic school in Minnesota” for families with an income of $75,000 or less, citing the availability of federal and state grants, as well as the U’s Promise Scholarship. Undergraduate student-body president at the U-Twin Cities Joelle Stangler agrees—to a point. “For low-income families, the U does a spectacular job, to be honest,” she says. “Their cost of attendance is basically covered. And wealthy students don’t have to worry. But you have this group in the middle…who are really not doing well when it comes to affordability. And what happens is that they have two options: work a full-time job during the school year, or incur massive amounts of debt to commit to rigorous and competitive academics.”

“We may have made a mistake from a policy perspective a while ago, when we decided to go with the high-tuition, high-aid model,” says faculty-committee chair Ropers-Huilman. “I don’t think we’ve found the right balance of ensuring equal access. It’s not yet a fair system.”

For middle-income students receiving limited financial aid and without bottomless family resources, there are only two primary means for making up the difference: work, and loans. Usually the two go together.

“There’s no way to go to school and work that much,” says Senator Al Franken, who has focused much legislative effort toward reducing and relieving student debt. “After 15 hours a week, it’s counterproductive in terms of how well you do in school, and how fast you can graduate. If it then takes them six or seven years to graduate, it’s no way to run a railroad. It’s no way to do this.”


illustration by doug chayka

Paying It Back

How conscious are Stangler’s classmates of these trends in tuition and debt? “They’re so busy, and they’re so focused on Will I get a job,” she says. “It’s that question, the trajectory of their entire life is based on: How will I get a job?

Rep. Drew Christensen, a senior at the U and, at 22, one of the youngest state legislators in the country through his seat in the Minnesota House, agrees. “Student debt is a huge concern, but a greater concern is being able to find a good job when they graduate,” he says. “For most folks, a certain amount of debt is OK, if you have an economic climate to provide jobs to pay it back.”

These are children of the Great Recession, many of whom were in high school when the bottom dropped out of the economy—they watched their parents go underwater on mortgages, they heard the talk of a job market that would take years to recover. They also have come of age in a time when the economic recovery that has occurred has gone disproportionately to the very wealthy—it’s understandable that they might be wary, suspicious of the future, yet feeling like they are without options other than to shoulder the burden of debt in order to have their shot at a career in the professional class.

They’re certainly less likely today to find security in an academic career, among the faculty ranks. In 1969, 78 percent of faculty nationwide was in tenure-track positions; by 2009, that number had dropped to 33 percent. Many university teachers are now hired in adjunct positions and paid by the class—in 2010, the average adjunct could pull down about $22,000 a year by teaching four classes a semester (and increasingly carrying student debt of his or her own).

Analytics director Kallsen admits that the U’s adjunct numbers have increased (a jump of about 280 over the last 15 years, shifting the ratio of faculty to adjunct from roughly 11:1 to 6:1); some of that growth can be a good thing, such as the small number of one-course instructors brought in from the local professional communities included in this number. “I’d be nervous if the U of M were on that path [of over-relying on adjuncts],” he says. “We’re not employing those folks who have to hop from school to school to teach classes, and we don’t really want to.”

Administrators will explain they need adjuncts to meet their budgets; adjuncts will share how it feels to be underpaid, burdened by their own student debt, and living with no job security. Meanwhile, some parents of college students are in fact still paying off their own professional or grad school debts—Lutheran Social Service’s Dahlheimer cites “multiple cases” of couples he’s counseled in which each spouse owes more than $150,000 in student debt—while watching what their child owes creep up into the high five figures. And as for the students, good luck getting them to slow down long enough to talk between the Dinkytown party scene, a competitive classroom environment, and worries about a very uncertain future.


illustration by doug chayka

Personal Growth vs. the Future’s Price Tag  

Isn’t anyone happy? The years one spends in college, after all, should be among the most formative of a young person’s life. It’s a time to study under inspirational mentors and live on one’s own for the first time. It’s a process of intellectual, even spiritual exploration—as well as preparation for working life. But is it worth it today?

There’s a personal calculus for each individual to find the equilibrium between personal growth and training for a professional future. With today’s educational costs, students with fewer financial resources have to be very careful about that balance.

“You still want people to have a sense of discovery and personal growth—you don’t want to say that this is all about getting a job,” says Larry Pogemiller, commissioner of the Minnesota Office of Higher Education. “But you need to be intentional about what you’re doing. You need to think it through and make choices that make sense for your personal circumstances.”

In some cases that means individual families looking at reining in their own spending—including asking whether or not an 18-year-old needs to live in an apartment that publicizes its views and features gym facilities and private bathrooms for each tenant. “I lived here as a grad student on University Ave. SE, and it was pretty crappy,” Kaler laughs. “Inch-thick frost on the windows, birdseed sprouting on the carpet. Now when I help families move in here in the fall, I’ve lost track of how many flat screen TVs I’ve carried into the dormitories.”

And it’s worth considering, as it was for some in previous generations, whether going straight from high school to a university is the best course of action. Stangler, the student-body president, speaks glowingly of the concept of the gap year in Europe, in which young people work before college. Pogemiller echoes the sentiment. “If you’re still discovering yourself, you might not want to spend at the level [of paying tuition] for that year,” he says.

Even with careful spending, financial aid, and working during school, many students at the U and beyond will still incur significant debt. Whether or not that situation changes will depend on what occurs on the political level, and in recent years proposals both to cut costs and deal with debt incurred have been floated. Legislator/student Christensen, for example, advocates for raising out-of-state tuition at the U (it’s $42,000 at the U of Michigan, around $19,000 for Minnesota; the rate was cut before 2011-12 in order to attract students from outside the state).

Franken has made student debt one of the central focuses of his senatorial agenda, advocating for debt-free college through making state contributions to higher education linked to federal funds. Along with others in the Senate, he’s attached his support as well to measures allowing ex-students to refinance their loans at a lower interest rate, as well as to make financial aid more transparent, and to help control student costs by making textbooks available as open source on the internet.

For the moment, everyone is feeling strapped—from the students and parents to the administration to professors charged with bringing in more corporate research grants. Professor Ropers-Huilman cites Ohio State as an example of creative financing for changing times: The university has recently leased its campus parking operation to a company in Australia, to bring in more auxiliary money.

Kaler opts for the long view. “There are a certain number of institutions that were doing business in 1500 and still doing business today,” he says. “The Parliament of Iceland. The Catholic Church. And then there’s the university—I just don’t think the business is going to change very much, and that it’s going to be around for a long time.”

It’s easy to agree—especially with more Americans than ever going to college (enrollment increased from 16.6 million to 20.6 million between 2002 and 2012 alone). But increased access to higher education for students from a wider range of economic backgrounds, and the resulting social mobility, will continue to better our society only if it’s sustainable. Otherwise, student debt hinders graduates in the years when they could be building for their own children’s progress.

“It’s become the cultural norm to shoulder this debt,” says Stangler. “I think a lot of people are aware of it because their parents prepped them, and they’re just accepting it as a cultural norm. And that’s what I would love to see shifted on its head.”


Need Help?
The Minnesota Office of Higher Education offers resources including free online publications on topics ranging from choosing college, admissions policies, financial aid basics, and balancing aid
with loans. ohe.state.mn.us

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