N.C. schools battle back against student debt crisis

College degrees are essential to career success, but student debt is piling up.
College degrees are essential to career success, but student debt is piling up. AP File Photo

As the cost of higher education continues to skyrocket and federal and state funding for it declines, America’s college students and their families are facing a well-publicized debt crisis.

In an article last month for, financial aid expert Mark Kantrowitz reported that two-thirds of students nationally who earned a bachelor’s degree in 2015 graduated with debt – and their average debt hit a new high of $35,000. Twenty years ago, just half of those earning bachelor’s degrees graduated with debt, and it averaged only about $10,000.

Meanwhile, bioethicist Samuel Garner put a human face on the problem in a recent essay for the online magazine Slate. He explains how he and his family racked up nearly $200,000 in debt – much of it unwittingly through private, high-interest loans – while financing his undergraduate and graduate educations.

In an age of growing income disparity, earning a college degree is increasingly necessary for landing a good job. But the financial impact for graduates, who often struggle for years to pay off their student loans, can be monumental. They delay buying houses, starting families and saving for retirement. In short, they enter adulthood on a financial precipice.

Yet, as the national debate about the crisis roils, private and public colleges and universities across North Carolina are experimenting with better ways of managing the debt challenge.

None has been bolder than Davidson College. The school announced in 2007 that its financial aid packages would no longer contain loans – just grants and campus employment. Through an initiative called the Davidson Trust, Davidson became the nation’s first liberal arts college to implement a true no-loan policy. Today, it is one of fewer than 20 higher education institutions in the U.S. – and the only one in North Carolina – with that approach.

Nearly a decade later, the approach is thriving thanks to generous support from charitable foundations, alumni, students and other donors who have raised more than $141 million in commitments to the Davidson Trust. “It’s a community project,” says Davidson President Carol Quillen – and one that’s focused, she says, on “creating a society where equal educational opportunity is actually real.”

The result: a significantly more diverse body of students who transition smoothly into the workforce. Since 2007, applications and admissions for minority groups, first-generation students and federal Pell Grant recipients have risen steadily.

Other higher education institutions across the state have put variations of Davidson’s policy into play. Duke and UNC-Chapel Hill, for example, do not include loans in financial aid packages for low-income students. Appalachian State and N.C. State offer no-loan plans for in-state students with low-income backgrounds. Many schools cannot afford no-loan policies, but they can help students borrow more wisely. The Boston-based nonprofit American Student Assistance, for example, provides financial literacy training and loan counseling for students at partner schools throughout the U.S. North Carolina is one of the most active participants with 11 institutions in the network.

All of these efforts bode well for North Carolina. As Quillen puts it, “The Davidson Trust is a talent strategy. It’s about attracting the most talented students in the country to Davidson.” That’s great news for our state’s talent pipeline – and a challenge for our other colleges to recruit more innovatively.

Christopher Gergen is CEO of Forward Impact and a fellow in Innovation and Entrepreneurship at Duke University. Stephen Martin is deputy chief of staff at the Center for Creative Leadership in Greensboro. Email: authors@bullcity