Saving is key to sustaining Idaho’s go-on efforts

The Brookings Institute released a study on student loan debt that revealed some troubling trends. In Idaho, it’s crucial that we understand what mounting bad news around student loan debt means for the college-going culture we’re trying to foster, and look for ways to keep our momentum from stalling.

Christine Stoll

The Brookings study showed that high-dollar borrowers are repaying their loans more slowly than in the past, accumulating interest without chipping away at the principal balance. Small-balance borrowers are in trouble too: they account for a majority of loans in default.

An important question for us all to ponder is, “How likely is it that people who struggle to pay back their student loans will encourage their own children down the path to college?” According to Pew Research Center, only half of American college graduates aged 25-39 with student debt believe the benefits of higher education outweigh the costs.

Of course, studies by organizations like the New York Fed and Georgetown University show that higher education remains an excellent investment — college graduates earn far more over a lifetime than high school grads — but perceptions and personal experience matter.

Currently, Idaho ranks fairly low — 30th of 51 — in student loan default rates, which is good news. Idaho’s schools are relatively affordable and offer a high-value education. Still, approximately 198,000 Idahoans hold student loan debt. The Institute for College Access and Success estimates that Idaho’s four-year college graduates leave school with an average of $27,639 in loans.

Widespread reliance on borrowing cannot become the status quo if we wish to sustain the work being done across our state to improve college-going rates. Idaho’s work to fund more scholarships is a meaningful and necessary first step. Frank discussions about the price tag of higher education should take place, too. Long term, however, families need a financial tool over which they have more direct control.

Consider the case of Susan Miller, an Idahoan who saved $25 per month for each of her two children with IDeal—Idaho 529 College Savings Program, starting when the children were toddlers. By the time Susan’s oldest son reached college, she had saved enough in his IDeal account to significantly offset the costs of his education. While Susan’s investment results can’t be assured for every family, saving $25 dollars a month is doable for many Idahoans and can potentially make a difference for their children.

Further, research by Washington University indicates that the simple act of saving any amount for a student’s higher education makes that student up to seven times more likely to go on. Promoting college savings, then, can address the practical elements of going on as well as the perceptions that inform each family’s views on whether higher education is a worthy investment.

Promoting college savings is crucial to the long-term success of our go-on efforts. If you agree, I encourage you — as a community leader, education stakeholder, parent, or concerned citizen — to lead by example. Start putting aside money for someone you love, and then help spread the word.

Written by Christine Stoll, the executive director of IDeal, Idaho’s 529 college savings program. IDeal is located within State Treasurer Ron Crane’s office and is administered by the Idaho College Savings Program Board. For more information about IDeal, contact Christine Stoll at 208-332-2935, [email protected], or visit www.idsaves.org.

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