Monday, February 18, 2019

Trinity Must Radically Reconsider Financial Solutions

Daniel Nesbitt ’22

Staff Writer 

No matter your political beliefs, there is one thing we can all agree on: college is too expensive. As the price of college has risen, so has student loan debt, now totaling more than $1.5 trillion nationwide. It is clear that something must be done to combat these problems, however, there is considerable disagreement as to the optimal solution. Some, like Bernie Sanders and Alexandria Ocasio-Cortez, advocate for tuition-free public college and student loan forgiveness at the expense of the taxpayer. Rather than relying on government intervention to solve this problem, universities must act on their own and embrace fiscal conservatism to reduce tuition costs and eliminate the reliance on federal student loans. 

Trinity’s tuition, including room and board, for the 2018-2019 school year totals a massive $71,710. This figure is approximately $10,000 above the 2017 median household income of $61,400 and is 48% higher than the average private nonprofit four-year college. Trinity should look to the President of Purdue University, former Indiana governor Mitch Daniels, for inspiration for reducing students’ financial burdens. In his time at Purdue, Daniels has managed to keep the nominal cost of tuition constant while reducing the real cost to students. To reduce tuition costs, Daniels reduced the university’s operating budget by $8 million. In addition, he cut the cost of room and board by 5%, the cost of campus dining by 10%, and made a deal with Amazon saving students 30% on textbooks. Furthermore, Daniels took a substantially lower salary than his predecessors. While reducing costs across the board, Daniels also instituted an innovative “Degree in 3” program, allowing students to receive a liberal arts degree in just 3 years, cutting the cost to students by 25%.

In addition to the “Degree in 3” program, Daniels also introduced an innovative solution to combat student debt. The solution, dubbed the “Back a Boiler” program (Purdue sports teams, students, and alumni are known as “Boilermakers”), is an income-sharing agreement (ISA) that allows students to pledge a portion of their future salary in exchange for funding. The average Purdue student enrolled in the ISA program receives $13,789 in aid to be paid back through small percentages of the student’s future income. There are also safeguards to protect the students. For example, payments do not begin until the student starts a job, and the repayment rate is capped at 15% of total pre-tax income. In addition, the payment rates and time period of payment varies by major and profession allowing for more flexibility. As Jon Hartley writes in National Review, “In essence, Purdue’s ISAs give recent graduates, many with uncertain work prospects, some relief from the high-interest fixed rates associated with federally backed student debt. 

Through reducing operating costs and introducing these two innovative programs, Daniels has saved students and families over $57 million while student borrowing has fallen drastically. Some critics of the budget cuts claimed that decreasing spending would hurt school rankings, however Purdue’s ranking has actually risen during Daniels’ time. Trinity can learn a lot from Daniels’ success at Purdue. Trinity should seriously consider introducing an ISA program as an alternative to federally subsidized loans. A study by the Federal Reserve Bank of New York found that every dollar loaned out through federally subsidized loans leads to an average $0.60 rise in tuition rates. Embracing an ISA program could benefit Trinity students substantially. Finally, Trinity must find a way to cut operating costs and reduce tuition as more and more families will be unable to finance a quality Trinity education.  

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