More Investment is Needed in MD Higher Education as College Debt Rises

Investment in Maryland’s colleges and universities remains lower than before the recession, according to a report by the Center on Budget and Policy Priorities. With student loan burdens increasing and recent college graduates facing a tough labor market, Maryland should continue to make investments in higher education so it remains a source of opportunity for residents working to improve their lives and to continue the state’s tradition of producing a highly-skilled workforce.

Since the start of the Great Recession in 2008, state investment in higher education in Maryland has decreased by 12 percent – over a thousand dollars per student. As states invest less in their higher education systems, students take on more debt to finance their education. 

Even as Maryland has kept tuition steady, recent graduates are taking on high levels of debt to pay for college. Maryland residents have the highest average student debt in the nation at $28,330, according to the Federal Reserve Bank of New York. According to a recent report from the state Department on Legislative Services, loans eclipse state, federal, and institutional support as the main way in which students pay for college. 

Source: Maryland Department of Legislative Services. 
Note: Unmet need refers to financial need uncovered by traditional aid sources, but these students still enrolled. 

Worse still, the Department of Legislative Services report says that it is likely that many students resorted to home equity loans, retirement plan loans, and credit cards to cover unmet need even the Great Recession drastically reduced the savings and wealth of American families. 

In light of the burden that the cost of college puts on students and their families, the unaffordable cost of higher education may actually increase inequality rather than promoting economic opportunity. For example, student loan debt is preventing some recent graduates from buying homes and starting families, and student loans now surpass credit card debt and car loans as the main source of debt in the country, according to the Federal Reserve Bank of New York.

The state of Maryland has the ability to help reverse these troubling trends. Public universities and community college have been a way for state residents to access education and economic opportunity, but for this to continue, Maryland must make greater investments in higher education. 

Check back here in the coming weeks for more on higher education investment in Maryland.