Editor’s note:

The following is the first part of a five-part series on student debt. Find links to the other pieces at the bottom of the page.

Degrees in Debt — At the last meeting of the Government of the Student Body last Wednesday, President Luke Roling started his State of the Student Body Address to the full senate by announcing Iowa State as a national leader in student debt.

“It’s kind of a paradox,” Roling said, “considering Iowa State has one of the lowest tuitions compared with its peers.”

Yet in 2007, the Project on Student Debt ranked Iowa as the U.S. state with the highest average student debt — with an average student debt load of $26,208. Iowa has since dropped to second in the ranking, but Iowa students’ debt has continued to climb to an average of $28,174, with ISU students averaging $31,616. The only area with a higher average debt is the District of Columbia. The national average for graduates of four-year private nonprofit universities is $27,650.

Roberta Johnson, director of financial aid, said part of the reason ISU debt load is so large is the under-utilization of Parent PLUS loans and other federal options.

While 2008 graduates of the University of Iowa had an average total debt of $22,856, according to the Project on Student Debt, the average federal debt of those graduates was $22,615. Iowa State’s 2008 graduates only had $18,845 in federal debt to $31,616 in average total debt.

Iowa private student loans grew 5,000 percent from 1995 to 2005 while U.S. private student loans grew 1,100 percent, according to the college board and Iowa College Student Aid Commission. Over the same time period, government grants and federal loans barely doubled in growth. At Iowa State, the number of students who obtained private loans increased 114,680 percent, while PLUS loans only saw an increase of 29 percent, according to the Board of Regents’ report “Access and Affordability.”

The Iowa College Student Aid Commission reports federal PLUS loans grew 394 percent nationally but only 175 percent in Iowa from 1995-06. PLUS loans in neighboring states Missouri and Illinois grew 901 percent and 744 percent.

Johnson believes private loans are here to stay, due to the gap between the maximum given by federal loans, and the amount required to cover books, living expenses and room and board.

In-state tuition at Iowa State increased 99.7 percent from the 2000-01 school year to the 2010-11 year. If tuition had remained constant over that period, with inflation at the rate of the consumer price index, Iowa residents would be looking at tuition near $3,800 instead of $6,102, according to the U.S. Bureau of Labor.

And even though these reports and studies constantly refer to four-year institutions, the Regents’ report states that the average time to obtain a degree from regent universities is four-and-a-half years. With five-year programs like landscape architecture and architecture, the average debt load is significantly higher: $42,937.

State Funding — “[State] appropriations for Iowa State in 2001 were $270 million,” said State Sen. Herman Quirmbach of Story County. “It fell down to $227 million in 2005.”

After the 2004 elections, funding began to increase again.

“Starting with fiscal year 2006, we started to raise university appropriations, and we hit a high point of $276 million in 2009,” Quirmbach said. “Of course, then the recession came along.”

Quirmbach said that in many ways Iowa’s economy was better off, but that Iowa was “not immune.”

“When 60 percent of your budget is tied up in education and the revenues fall off, that way you can’t balance your budget without taking some out of your education, as much as I hate to say it,” Quirmbach said.

Since education makes up such a large chunk of the budget, it took a large hit when Gov. Chet Culver imposed the 10 percent across-the-board cut.

But State Rep. Peter Cownie of West Des Moines, who is in his first term on the education committee in the house, feels like the state could’ve done better, and that education needs to be prioritized.

“Personally, I don’t feel like education should’ve been cut 10 percent,” Cownie said. “In that case, I personally say it was a step backwards for education.”

In order to offset state cuts, Iowa’s universities have had to cut back and look for other sources of revenue.

“In 2010 we’re in the regrettable situation where legislatures gradually have cut their funding from the universities,” said ISU university professor of political science Steffen Schmidt. “So to maintain their quality, universities have had to get contracts and grants from the outside, increase tuition to cover the cost of their quality.”

But Schmidt said student tuition does not completely cover the cost of delivering an education.

“It’s not like you go into McDonald’s and paying for your meal and you’re paying the cost of the food plus they make a profit,” Schmidt said.

Quirmbach said he is grateful for the federal stimulus funding Iowa’s education system received, stating things would have been much more dire had those funds not come along.

“My concern is, is public education still going to be public?” Quirmbach said. “I would prefer to see the state providing more income [to universities] than tuition.”

Schmidt echoed that sentiment.

“[Public universities] were created to have an education that was really accessible so that we can build up a workforce that is really prosperous and so people can have enough training and education to stimulate economic activities and improve our economy,” he said.

Quirmbach said a deal was struck with the regents that was if the legislature increased funding in increments of roughly $40 million a year then the regents would hold tuition increases to inflation rates.

But the bottom line is that three-quarters of ISU funding came from the state in 1981, and only one-fifth came from tuition. Today, those sources are nearly even.

In September 2009, University of California at Berkley chancellor Robert J. Birgeneau and vice chancellor Frank D. Yeary proposed in a Washington Post Op-Ed a modern Morrill Act — the original was the founding of Land Grant universities like Iowa State — to increase federal support for a limited number of public universities.

“The public universities were created because not everyone could afford to go to Harvard, Yale or the other Ivy League schools,” Schmidt wrote.

Johnson said the upcoming release of current average indebtedness by the regents will be less than $30,000.

Financial Aid — The first federal student loan program established by the National Defense Education Act was passed into law in 1958, at a time when Congress was concerned with keeping up with the Soviet Union in math and science after the launch of Sputnik 1.

In 1965, the federal government began guaranteeing student loans provided by banks, like Wells Fargo or Chase, and nonprofits, such as Iowa Student Loan, through the Federal Family Education Loan program. That was eliminated for fiscal year 2011 by the Student Aid and Fiscal Responsibility Act, included in the health care reconciliation bill. The Congressional Budget Office estimates the elimination of this program will generate $67.8 billion in savings over the next 10 years.

President Barack Obama intends to use this money to expand Pell grants and direct loans. Similar measures were proposed in President George W. Bush’s final three annual budgets.

Many states also appropriate money to go to financially needy prospective college students. In Arizona, 96.7 percent of this money goes toward public postsecondary institutions, and in California this number is 67 percent. However, in Iowa, public universities only receive 6.1 percent of this funding, and the other 93.9 percent of goes to grants for students attending private colleges. The next nearest state in Iowa’s peer group is Michigan with, 31.7 percent of funding going to public institutions.

“The history on this is that the Independent College Association in Iowa — which represents the private colleges — successfully lobbied the legislature many years ago to provide grants to help students attend their schools, since the legislature was also appropriating funds to help public institutions keep their tuitions low,” Johnson said. “Now that the amount of money appropriated to public institutions is less than 50 percent of our funding, the recommendation of the access and affordability group was that the Board of Regents should make funding need-based grants to students who are attending public institutions a legislative priority.”

Every dollar the state cuts in higher education funding can require more than $2 in tuition increases to make up the difference, according to the regents’ report. The same report stated between 1981 and 2009, “appropriations as a percent of regent university general education funding decreased from 77.4 percent to 49.5 percent” while “tuition increased from 20.8 percent to 44.9 percent.”

Find the rest of the student debt series:

April 26: ISU student debt high, despite low tuition costs

April 27: College loans remain a struggle

April 28: For-profit education furthers debt