Arizona: Recession Created 'Perfect Storm' for Sharp Rise in Student Loan Debt

"Arizonans came out of the recession with more than twice the student debt they carried 10 years ago, as economic forces that came with the recession created a 'perfect storm' for rising debt," according to the Eastern Arizona Courier. 

"The Federal Reserve Bank of New York said Arizonans carried $4,690 in student debt per capita in 2016, up from $1,930 in 2007, the year that marked the beginning of the recession.

Experts say the increase is due to state funding cuts to higher education budgets, increases in tuition and — in what may be counterintuitive for an economic recession — more people deciding to enroll in college.

'There were fewer jobs available. So you had students or older workers wanting to retrain for a job,' said Mark Huelsman, senior policy analyst at Demos, a national public policy advocacy group.

Enrollment at Arizona’s three public universities has grown substantially since the start of the recession, from a total of 127,446 in 2008 to 171,191 in 2016, the most recent year for which numbers are available from the Arizona Board of Regents. Those figures include enrollment in online courses of study.

All three schools gained, with Arizona State University posting the biggest increase, rising from 67,082 to 98,177. University of Arizona enrollment rose from 38,057 to 43,625, while Northern Arizona University saw its numbers grow from 22,307 to 29,989, according to data from the Arizona Board of Regents.

But those students were enrolling at a time when Huelsman said families across the country had less money to spend, leaving students 'unable to use some wealth that they thought they’d be able to fall back on.'

Completing the 'triple whammy,' Huelsman said, was a steady increase in tuition.

In Arizona, those increases were driven in large part by state cuts to higher education funding, as state lawmakers struggled to balance a budget hammered by the recession."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 1/3/2018

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