Student Loan Debt - the next financial crisis?

Now that Black Friday has passed, holiday shopping is in full swing. The media is making regular references to consumers “shopping on a budget” and “credit card use is down this year.” As federal regulations changed over the past few years, credit card use has changed also. Lower credit card limits, increased minimum payments, and a collective uncertainty about the economy have changed consumer spending habits. The slowing pace of credit card debt reached a little known nexus this past June when total student loan debt in this country actually outpaced total credit card debt. I’m not kidding. When I heard about this it was hard to believe and after a little research it’s quite possible that student loan debt is a likely future chapter yet to be written in the troubling and complex economic storyline in this country.

The industry website www.finaid.org has a revolving clock (similar to the national debt) that displays the current estimate of current student loan debt, including both federal and private loans – it increases at a rate of about $2,853.88 per second and totals more than $870 billion. The reasons for escalating student loan debt are many and include the fact that rising tuition costs at colleges (particularly, but not exclusively, private colleges) have outpaced need-based grants; unemployment has increased and remains stagnant; the housing market drop has limited home equity loan possibilities; and perhaps the biggest factor of all is the inability to resist the temptation to accept student loans simply because they are accepted without a thorough plan to repay the excessive debt.

The average cost of college can vary greatly depending on the college or colleges of choice www.collegeboard.com/student/pay/add-it-up/4494.html. More than fifty percent of all college freshman in New York (and nationwide) attend a community college where tuition ranges between $2,900 to more than $4,000 in New York (MVCC is $3,400 for a full-time student). Four-year schools have even greater variance in tuition from as low as about $6,000 at some public institutions to more than $50,000 at some selective private four-year schools. Advice and best practice suggestions for limiting student loan debt abound on the Internet and in financial aid offices at colleges around the country, including MVCC. Although paying for college for my own children is still a few years away, I’ve reviewed many of these suggestions and developed my own list to keep in mind.

• Assess all your options and choose a college that is the right fit for the student in terms of education, degree, environment, AND finances.
• Borrow as little as possible – just because the funds are there doesn’t require that they be accepted.
• Look ahead to the career cluster (even if you don’t have a specific job in mind) to see what type of job and income level might be possible after graduation and factor in repaying the student loans along with rent/mortgage payments and other living expenses.
• Know that student loan debt will be factored in to overall credit scores and could haunt the student for years to come and limit possibilities with future loans for a car and/or a house.
• Do your research and understand loan terms like unsubsidized loans and the various governmental programs.
• Don’t get lured into a fee for service financial aid consultant – the process is confusing, but you don’t need to extend even more dollars to figure out how much debt you’ll acquire along with a college education.
• Upon graduation, don’t defer repayment of student loans if at all possible. At the very least, make interest-only payments so that the payment doesn’t include interest on top of the original loan interest.

Hopefully, with more of us following an advice list like this we’ll see student loan debt decline rather than continue to escalate toward a national crisis – the magnitude of which is rarely mentioned in the media. If you have any thoughts on this post, please contact me at presblog@mvcc.edu.  (My thanks go to our financial aid office for raising this topic and helping me understand the magnitude of the issues.)

Thanks for Homegrown Businesses

As the Thanksgiving holiday arrives, I am certainly thankful and honored to be serving in my fourth year as President of MVCC. I am also thankful for the incredible opportunities I have to call on local businesses to better see their operations and listen to their issues and needs. I keep my ears open to better understand how MVCC can be aligned to help local businesses succeed in these ever-changing times. We can always be more successful educating their current employees or placing our interns or graduates in their operations. These visits often include a behind the scenes tour and this is where I’m consistently amazed at what goes on right here in the Mohawk Valley.

I have found that local businesses here:
• Produce 50% of all straps on helmets for firefighters in this country.
• Include one that ships so much product around the world, they rank in the top 5 customers of Federal Express.
• Include five with manufacturing plants in China – challenged to find 50 well-trained technicians locally some pursue 500 manual labor workers in China.
• Produce nanotechnology components utilized in every Motorola cell phone sold around the world.
• Produce every uniform for the U.S. forest service.
• Package 55% of all retail olive oil & 80% of all olive oil on Wal-Mart shelves.
• Include one that dominates its entire industry east of the Mississippi river.
• Produce every glove used by the Transportation Security Administration staff in every U.S. airport.
• Include one that does business with companies in more than 100 countries.
• Include one that produces large video screens in use at sports stadiums throughout the country.

These are local, homegrown, home-based businesses that are not just surviving – they’re thriving! And these are businesses additional to solid employment opportunities in healthcare and emerging growth in cybersecurity-related industries. A recent editorial in the Observer-Dispatch by Alice Savino highlighted the fact that, contrary to the common experience, jobs are available. However a big challenge we face is that employers and potential employees aren’t always finding one another.

When talking to employers, I hear a reoccurring theme about skill gaps they're finding in many job candidates. Even more than people well-trained for specific jobs, employers need people who are punctual, respectful, possess a positive attitude, have a willingness to learn, and (and I'm not kidding here) read, write, and utilize mathematics. More than anything, employers want people who can reason critically, solve problems and, above all…think! MVCC has a workplace success curriculum that addresses these gaps. But, frankly, the need seems greater. Every degree and certificate program could, and should, integrate these themes as much as possible. It will make our graduates even more marketable! If we can further develop our local workforce around these basics, small businesses - and the entire Mohawk Valley region - will grow more effectively.

I think we’d all be more thankful of what we have in the Mohawk Valley if we could more easily recognize that success in this region is no longer (and likely won’t be again) found in a few major businesses with 5,000 employees each but, rather, is more likely found in a hundred or more companies with 250 employees. We’re not there yet, but based on the successfully homegrown companies like those listed above, we’re well on our way – we just don’t know it! If you have any comments on this post, please contact me at presblog@mvcc.edu.

Everyday is Veterans Day

"A Veteran is someone who, at one point, wrote a blank check payable to the United States of America for an amount up to and including their life. That is beyond honor..." - Anonymous

Last Thursday was Veterans Day. I participated in the flag-raising ceremony at our Utica Campus and was moved by the attendance of former and current MVCC students who have served our country. With 140 veterans, 12 dependents of active duty personnel, and 15 national guard/active reserve personnel currently enrolled, MVCC is proud to have been named a "Military Friend School" for 2010 by G.I. Jobs Magazine - a designation given to the top 15 percent of all institutions of higher education in the United States which are dedicated to helping today's Veterans realize their career goals.

The day after our Veterans Day ceremony, I had the opportunity to speak as part of a panel presentation to the Continuing Education Association of New York. The conference was held at the Thayer Hotel on the campus of the U.S. Military Academy at West Point. While our country is involved in two wars that have little resemblance to any previous wars, my trip to West Point afforded me an opportunity to pause at Trophy Point overlooking the Hudson River and reflect on the incredible sacrifice so many have made for our country.

My work with the Homeless Coalition has informed my thinking about how easily it is for veterans to fall into homelessness upon returning to civilian life and the many challenges that come with that transition. MVCC has partnered with the local Workforce Investment Board and others to help the local Utica Center for Development - Veterans Outreach Center redevelop the former Utica YMCA facility.  Our faculty and students transformed the entrance area of the building into a modern Internet Cafe' where veterans can access 100% of their government benefits online. As funding becomes available, we will continue to assist as we can with the transformation by updating the residential units on the second floor for homeless veterans and partner with the OMH-BOCES and other local colleges to offer classes in a new educational access center at that location.

The needs of our current and former veterans are great and certainly deserving of everything our communities can offer. The President of the MVCC Veterans Student Club, Ron Metz, did a great job serving as the Master of Ceremonies at our Veterans Day Ceremony.  His words were echoed by our guest speaker, County Executive Tony Picente, whose words ring true with great significance - "everyday should be Veterans Day."  If you have any thoughts on this post, please contact me at presblog@mvcc.edu.

More Than a Grant

I am often reminded of the notion that success is the product of preparation and opportunity.  Last week a series of on-campus events actually turned out to be more than what might have, at first, appeared.  On the surface, last week’s College Senate meeting might have appeared to be a singular moment in time, comprised of civil discussion, a vote, a resulting recommendation...just another day at the Senate. I would argue that it was much, much more.

Preparation
For the past 18 months, a great deal of work has gone into refining the College's governance system.  From two joint Cabinet/Senate Advisory retreats where great strides were made to review committee by-laws; create simplified charters; define Councils and Workgroups (that operate apart from the normal Senate committee structure); and clarify communication channels between the Cabinet and Senate, we've accomplished much.  After the first-ever joint meeting of Senate committee chairs, many Senate committees are taking a proactive approach to fulfilling their charters - going beyond simply reacting to issues as they arise. Agendas and attendance at Senate meetings this fall have been full and engaging, with candid discussion and give-and-take dialogue.  Simultaneously, the Strategic Planning Council has found its rhythm; is refining institutional strategic priorities; and leading a vocal charge for the need to infuse data and measurement into our decision-making processes. Their work prompted the Cabinet Conversations this fall that have expanded unprecedented dialogue and reflection across the entire institution.  It’s as though we were preparing for something…

Opportunity
One month ago we witnessed the first-ever White House Community College Summit where the nation turned its attention toward community colleges and the critical role they play in America. The event also prompted the Bill & Melinda Gates Foundation to announce a $35 million Completion by Design Initiative.  They selected nine states (NY was one) and specific community colleges within each of those states (MVCC is 1 of 8 in SUNY) that would be invited to apply.  The general thrust of the initiative is to accelerate efforts to move community colleges from simply providing access to focusing on student completion and success by taking proven programs and services and bringing them to scale for a more significant impact.  The work will require making hard decisions and overcoming daunting challenges – most of the toughest changes required will be fairly unknown early on - all in the name of increasing student success and completion.  It is an initiative that should not be taken lightly.   It will require the collective will to want to become better than we are. It is a tremendous opportunity to rise to the call of a nation and perform on a national stage – an opportunity that has potential to serve as a catalyst to even greater success.

Success
It may seem odd for me to talk about success while we’re just finishing the application but, as the saying goes, “the journey is often as important as the destination.”  As an organization with an emerging vibrant culture, the process to get us to the point of applying to participate in the Completion by Design initiative is a success in itself.  For the Grants Council and Cabinet to stay on top of an information stream that was changing daily, with national and state implications, is testimony to MVCC's responsiveness and increasingly effective interdepartmental communication.

The capstone step in this process was last week's College Senate meeting, where the work of the last 18 months came into full view with a thoughtful, civil, and measured conversation about the pros and cons of our participation in this national initiative. This collaborative process was repeated as the MVCC Professional Association worked with college administrators to come to a full understanding of the grant opportunity and its implications for the college community. The process we followed in this effort clearly made this more than a grant – the start of the Completion by Design process felt more like "Enlightened Civil Discourse by Design."  Who knew that the formula for success could have unexpected derivatives and pay multiple dividends?

If you have any comments on this post, please contact me directly at presblog@mvcc.edu.