By Kimberly K. Estep
On Monday evening, June 8, the Tennessee House voted unanimously to pass the Responsible Borrowing Initiative Act (HB2601). Behind this legislation are some staggering statistics. For example, the average student loan debt for Tennessee borrowers, regardless of institution, is $25,250. While this is slightly better than the national average of nearly $33,000, it’s still a huge burden on the shoulders of people trying to enter the workforce and make their home in Tennessee. And what’s even worse is that, of loans made to attend public four-year colleges in Tennessee, 7.1% of them go into default. That’s more than seven out of every 100 loans. Nationally, student debt has increased 70% in the last six years, from about $1 trillion to more than $1.7 trillion.
This has to end, and The Tennessee Responsible Borrowing Initiative (RBI) Act is a critical step toward that goal.
The RBI Act requires each institution operated by the Tennessee Board of Regents, each state university, and each campus in the University of Tennessee system to provide students with a detailed college financing plan every year. Legislators hope that this will encourage students to borrow only what they need, rather than the total amount for which they are eligible. Using a “Student Loan Scenario Calculator” – a personalized approach that gives students full visibility of their total student loan debt, including prior college debt, and projected debt at the time of graduation – students will be able to make an informed decision to borrow wisely.
The bill has already passed in the Tennessee Senate (SB2503) and is now headed to Gov. Bill Lee’s desk for signature. From the video of the House proceedings on this bill, it’s obvious that legislators are outraged about the rising cost of higher education in this state and throughout the country.
Every year, the university for which I serve as chancellor, WGU Tennessee, conducts a statewide higher-education survey of Tennesseans. Our goal is to take the temperature of Tennesseans around several key issues in higher education, figure out what barriers exist to pursuing a degree, and highlight the things that Tennesseans believe state government should prioritize. In our most recent survey, conducted earlier this year, the results were clear: 67% of Tennesseans said that cost is an obstacle to completing a degree program (with 56% noting specifically that the amount of money they’d have to borrow is a significant barrier), and 80% of Tennesseans said that student loan debt should be either a top or middle priority for Gov. Lee’s administration (50% and 30%, respectively).
Additionally, we support this new legislation at WGU because, actually, the Tennessee Responsible Borrowing Initiative (RBI) is based on the WGU RBI, which we implemented in 2013, and which has been tremendously successful. In fact, the average borrowing per year per WGU student (of those who borrow) has decreased by more than 40% since 2013, and it’s still dropping. We expect to see similar incredible results from Tennessee’s legislation, and we couldn’t be more honored to have played a role in getting this cost-saving, life-improving legislation off the ground.
Student debt is a massive, national crisis. It’s going to take dedication and time just to get our collective arms around the various issues in play, let alone begin to solve the problem. But the RBI Act is exactly the kind of creative problem-solving that will help us do it. State Rep. Mark Cochran (R-McMinn and Monroe) and state Sen. Steve Dickerson (R-Davidson) showed initiative and true leadership in sponsoring this legislation. That the Tennessee legislature passed this bill, with full support in both the House and the Senate, demonstrates without ambiguity that this is the bipartisan will of Tennesseans. In all the turmoil of these uncertain times, this is a clear example of how people who may differ in other areas can work together on meaningful change for the good of the community. That’s the kind of good news we all need right now.
Dr. Kimberly K. Estep is the chancellor of WGU Tennessee, a state-endorsed affiliate of national, nonprofit, accredited Western Governors University. Follow her on Twitter at @chancellorestep.