In college search, families consider student debt, job prospects - Omaha.com
Published Monday, March 4, 2013 at 12:30 am / Updated at 12:02 pm
High cost of higher education
In college search, families consider student debt, job prospects

LINCOLN — Rachelle and Mike Pechacek can't help but worry as their daughter Emilie, a Bellevue West senior, ponders yet another campus in her hunt for just the right college.

“We talk about it often,” said Rachelle Pechacek, a first-grade teacher. “Is that the best place for her? Will she get the best education? Will she get a job after she graduates? Will she have what she needs to build her future?”

Like other students and families across the country, they feel uneasy about higher education's price tag. Leaders with an interest in higher education, from the president to professors, are brainstorming new ideas and tools to help prospective students and their families navigate the search for a college.

Strategies under discussion include highlighting schools' performance measures in areas like costs, completion rates and debt levels. A newly developed federal scorecard gives prospective students a snapshot of how colleges perform. Eventually, colleges' accreditation and their access to federal financial aid dollars could be tied to those performance measures.

Analysts now say total U.S. student debt exceeds $1 trillion, with one in 10 borrowers owing more than $54,000 in loans. Graduates would have to land a job that pays more than $93,000 a year to comfortably repay such loans within the typical 10-year term. That's a monthly payment of about $620.

Meanwhile, about one in five first-time college students at four-year institutions will drop out before finishing a bachelor's degree. About one in seven will default on their loans within three years of leaving college, with those who leave without a degree in more danger of default.

President Barack Obama pointed to such concerns last month in his State of the Union address. He spoke of establishing affordability and value as factors in supplying federal student aid to colleges. He suggested requiring college accrediting agencies to examine affordability and value when they review college programs and practices. (Colleges must be accredited before their students can receive federal financial aid.)

He also touted a new online college scorecard developed by the U.S. Department of Education. Its aim is to show parents and students where they can get the most bang for their educational buck. To do that, it provides a succinct summary of college performance in four key areas: cost, graduation rates, student loan default rates and debt loads.

Click here for a closer look at Nebraska college affordability.

For example, the scorecard shows that the six public university campuses serving undergraduates in Nebraska and Iowa tend to have comparatively low net costs and comparatively high graduation rates. Debt levels for the University of Nebraska rank in the low to middle range, while those for Iowa's universities, which have seen greater reductions in state appropriations, are considered high.

Private nonprofit universities — such as Creighton, Drake, Grinnell and Nebraska Wesleyan — tend to have higher net costs and higher debt levels than their public counterparts, but they also have significantly higher graduation rates.

In the Big Ten Conference, Nebraska has lower net costs than eight of the 12 current members, and Iowa has lower net costs than six. But UNL has the lowest graduation rate, with Iowa fourth from the bottom.

Joyce Lehn, a guidance counselor at Lincoln Southwest High School, said students and families are very aware of the rising costs of college.

“It's become more of a concern for students at an earlier age,” the longtime guidance counselor said. “When I started, you didn't hear freshmen and sophomores talk about it as much. Now they know they need to start planning earlier.”

Along with information about future careers, students and their families want to know what they need to do to prepare academically and financially, she said.

Click here for a closer look at Iowa college affordability.

“With the expense involved, they want to look at all avenues,” Lehn said.

Rachelle Pechacek said her daughter had applied to at least 10 colleges and toured three. An athlete who wants to study business and marketing, Emilie would prefer a small college, out of state, where she could play softball.

“She has a running list of the pros and cons of every college she's considered — she's pretty analytical,” Rachelle said. “She wants to make the best choice, because once she makes her choice, she plans on staying there four years.”

The president's proposals are part of a nationwide discussion of how to attack higher education's rising costs while ensuring that colleges provide the best value for students' dollars.

Not all agree that the scorecard offers students much new information. In fact, the scorecard as yet falls short of its original plan to include job placement rates. For now, the card says the measure still is under development and urges prospective students to ask college officials about how graduates fare in the job market.

Some question whether the scorecard offers much that cannot be found elsewhere. Stuart Butler, an analyst with the Heritage Foundation, a conservative think tank, noted that the private sector already provides cost-benefit analysis through college rating systems provided by U.S. News & World Report, Forbes and Kiplinger, among others.

Still, the Center for American Progress, a liberal think tank headed by John Podesta, former chief of staff for President Bill Clinton, praised the scorecard as an improvement because it offers students a clearer sense of what it might cost to attend.

Like many students, Emilie Pechacek will have to take out student loans to help pay the costs of her schooling.

“It's becoming a reality. It's March. As she's looking at the numbers, she realizes how expensive it is going to be after four years,” Rachelle Pechacek said. “Even with scholarships, it still could be $10,000 in loans a year.

“I've met people in their 40s who are still paying off their college loans,” she said. “I don't want that for my children.”

Contact the writer: 402-473-9581, leslie.reed@owh.com

Contact the writer: Leslie Reed

leslie.reed@owh.com    |   402-473-9581    |  

Leslie covers higher education issues and events affecting Nebraska college students and their families.

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