Emails, Jenny LaCoste-Caputo, executive director for public affairs, University of Texas System, April 20 and 25 and May 5 and 9, 2016

On Apr 20, 2016, at 3:24 PM, Selby, Gardner (CMG-Austin) wrote:

Hello again.

I write this time seeking the chancellor's basis his student-debt claim underlined in my transcription below. Of course, correct me if I've mistyped or if I got the meeting details wrong in any way.

?

Chancellor McRaven, mentioning student debt, said at the Jan. 21, 2016 Texas Higher Education Coordinating Board meeting: “I’m proud to say, and I checked these numbers for about the hundredth time yesterday, because I always make sure that I don’t get my pants on fire in terms of that Pants on Fire meter,” drawing laughter, “but across the University of Texas, our undergraduates, our undergraduates, their debt is less than $21,000, for our undergraduates. That’s probably one of the lowest debts across the nation. And so we’re proud of that. , responding to a board member urging him to make sure the system makes sure students who come to its schools from community colleges are on track to four-year degrees,

(1:23:09 to 1:23:20 mark of the meeting video posted here<http://www.thecb.state.tx.us/apps/Events/archive/webcast.cfm?youtube=A8Ygt89xt90>)

g.

W. Gardner Selby

Reporter / News

Austin American-Statesman

PolitiFact Texas

6:05 p.m.

April 20, 2016

Median Cumulative Debt: $20,755

Data source: Financial Aid Database System (FADS) that is data collected by the Texas Higher Education Coordinating Board (THECB) from our campuses.

Population: Bachelor’s recipients between 2001-02 and 2012-13 who borrowed. This is based on students who initially enrolled as first-time in college students; if a student enrolled at a non-UT System institution at any time, that debt would not be included. Dollars are adjusted for inflation.

Let me know now if this is sufficient or if additional information is needed.

2:01 p.m.

April 25, 2016

Here are answers to your latest questions:

If this was the median at a date certain, what date?

The median is based on cumulative debt at the time the student earned their bachelor’s degree.

It is based on bachelor’s degree recipients who earned their degree between Academic Years 2001-02 and 2012-13.

The calculation only includes bachelor’s degree recipients who initially enrolled at a UT academic institution as a first-time in college student -- and who took out student loans. Student loans tied to enrollment at a non-UT System institution are not included because UT System only has information on student financial aid tied to its own institutions.

The dollars are adjusted for inflation (2014 dollars).

--How did student debt loads range?

Cumulative undergraduate student loan debt does vary. Below are the 10th, 25th, 50th, 75th, and 90th percentiles for your reference.

10th Percentile = $5,415

25th Percentile = $11,535

Median (50th Percentile) = $20,755

75th Percentile = $29, 725

90th Percentile = $42,051

--Is there a web page or such we should visit? Are there system or other experts to interview?

Please see the responses below for related external sources and websites.

--Did the figures consider loans for housing?

Yes. The cumulative student loan debt includes borrowing related to tuition and fees, room and board, books & supplies, and transportation and other living expenses.

--How did the chancellor conclude this figure ranks among the lowest nationally?

According to data presented on The Institute for Access and College Success’ website, College Insight, the national average debt for bachelor’s degree recipients from public, 4-year institutions in 2013 is $25,060. http://college-insight.org/

Further, according to The College Board’s Trends in Student Aid Report, the average cumulative debt for bachelor’s degree recipients from public, 4-year institutions in 2012-13 is $25,500. The College Board’s Report: http://trends.collegeboard.org/sites/default/files/trends-student-aid-web-final-508-2.pdf

--Has the system or perhaps one or more of its institutions considered reducing the debt burden on students by charging much higher tuition as private universities do? Why or why not? I speculate that if that was attempted, wealthy residents could likely easily pay a lot more and the extra revenue could be used to provide more grant aid to poor- and middle-income people.

As a public institution, we feel we have a mandate from the Texas Legislature and a responsibility to Texans to keep tuition as affordable as possible, while at the same time meeting the needs of the universities to provide the best possible educational experience for our students. While raising tuition dramatically to provide more revenue is a tactic used by many private universities, it is not an approach that public universities have attempted, largely because it has the potential to put a college education out of reach for students from middle-income families. It’s unlikely that enough students would be able to pay an enormously high sticker price in order to subsidize the cost for middle- and low-income students at a public university. Currently, we are providing a path for low- and middle-income students to receive a UT education: about 63% of fulltime resident undergraduates receive grants, scholarships or tuition waivers. Many students receive grants, scholarships, and tuition waivers that cover 100% of tuition and fees and money for living expenses beyond that. On average, aid recipients from families making $60,000 a year or less pay nothing in tuition and fees and receive an additional stipend. Aid recipients from families making $80,000 or less generally have about 80% of tuition and fees covered by scholarships, grants and waivers. Overall, about 63% of full-time resident undergraduates at UT institutions receive grants, scholarships or tuition waivers.

--Any other journalism or other independent analyses that you recommend on this topic?

The two sources referenced above are reputable resources: The Institute for College Access and Success’ College Insight tool and The College Board’s annual Trends in Student Aid Report.

--What else seems relevant?

We also feel it’s relevant to consider student debt in the context of earnings after graduation. A degree is an investment that pays off. Just one year after graduation, a UT bachelor’s degree recipient working in Texas earned a median of about $44,000. This is compared to the median earnings of high school graduates nationally -- $24,000 per year. By the tenth year after graduation, bachelor’s degree recipients’ earnings have increased to a median of about $60,000 per year. The University of Texas System is committed to helping students make informed decisions about the costs of higher education – that is why we developed the seekUT tool http://www.utsystem.edu/seekut/ - to help students and families make informed decisions about student debt and post-graduation earnings.

Let me know if you need anything else,

Jenny

11:43 a.m.

May 5, 2016

Is the following accurate?

You told me that among students who took out loans and earned UT bachelor’s degrees from 2001-02 through 2012-13, the median cumulative debt was $20,755 (meaning half of such graduates had more debt and half had less) in inflation-adjusted 2014 dollars.

Some UT graduates have less accumulated debt, others more. Some 10 percent owe $5,415 or less, another 10 percent owe $42,051 or more.

Yes, the above is accurate.

Second, it looks to me like the cited results don’t reflect every UT graduate to take out loans nor do they necessarily roll in every school loan. You said the cumulative median figure reflects graduates who also had been first-time college students on a UT campus. And, you said, the figure did not consider loan debt accumulated at non-UT institutions (such as community colleges, we took that to include).

Make sense?

This is correct. This calculation does not reflect every UT bachelor’s degree recipient who borrowed. If the student transferred into at UT institution (i.e. was not a first-time in college student at the UT institution) then they are not included in this calculation. We do not have access to data on student borrowing at other institutions. Thus, including transfer students in our calculation would most likely underestimate the student debt since we would only be able to account for the debt the student took on at their UT institution, and not any debt that may have been taken on prior to their enrollment in a UT institution. This an accepted and standard methodology that is used by the Common Data Set and the College Board annual report on Trends in Student Aid (resources that we previously mentioned), among others.

Next, I am going to look through the sources you recommended in part because I don’t know yet the raw student counts that figure into the analysis. How many loan-taking graduates are not included?

The calculation includes 43,900 bachelor’s degree recipients between 2001-02 through 2012-13 who borrowed (those graduates who entered their UT institution as a first-time in college student).

There were 82,380 bachelor’s degree recipients during this time period that borrowed, but are not included in the calculation (those graduates who entered their UT institution as a transfer student).

Thus, our calculation accounts for approximately 35% of the borrowers that graduated during 2001-02 through 2012-13.

From: Selby, Gardner (CMG-Austin)

Sent: Thursday, May 5, 2016 11:53 AM

To: LaCoste-Caputo, Jenny

Good stuff, thanks. Does the chancellor think this information is flawed because it considers just over a third of borrowers who graduated with a BA or BS?

From: LaCoste-Caputo, Jenny

Sent: Thursday, May 05, 2016 11:59 AM

To: Selby, Gardner (CMG-Austin)

You’re welcome. No, the chancellor believes the methodology is sound. If we included transfer students – based on the data that we have – it would likely push the number lower because we do not have access to information on debt they may have already accrued. And that lower number would not be an accurate representation of total student debt. So looking at students that we know we can account for during their entire college experience gives us a reliable number.

From: Selby, Gardner (CMG-Austin)

Sent: Thursday, May 5, 2016 12:01 PM

To: LaCoste-Caputo, Jenny

Is there other regional, state or national data that covers more of the graduates?

2:49 p.m.

The THECB has student-level data on all students at public universities in Texas so they would be able to track. However, to our knowledge, they haven’t done an analysis to come up with an average of student debt. They have done analyses on debt that includes parental debt. The methodology we are using is widely used and the accepted methodology for calculating cumulative student loan debt and it appears to be what other Texas public systems are using as well. For national data, I’d refer again to the Institute for College Access and Success and the College Board.

2:56 p.m.

May 9, 2016

From: Selby, Gardner (CMG-Austin)

Sent: Friday, May 06, 2016 1:51 PM

To: 'LaCoste-Caputo, Jenny'

Subject: RE: Folo

(Selby) One more query: Does the system have a comparable figure for the latest graduating class?

The most recent graduating class for which we have the data to calculate this is the 2012-13 graduates. The median for this particular graduating cohort is $23,350. This calculation follows the same methodology we have previously discussed.

(Selby) Also, why did the chancellor look at this over a dozen years when recent single-year data might be more relevant?

In this instance, the chancellor looked at student debt over 12 graduating cohorts in order to gain a better understanding our graduate’s debt in the context of what they typically earn as a member of the Texas workforce. Looking at graduating cohorts over time allows for an examination of the burden student loan debt payments place on our graduates not only immediately after graduation, but also up to 10 years after they have graduated. For example, looking at earlier graduating cohorts, such as 2001-02 and 2002-03, allows for looking at median earnings at one (2003 and 2004, respectively) and 10 years after graduation (2013 and 2014, respectively) and the consideration of student loan debt in that context. Further, this type of analysis allows for the production of debt-to-income ratios for our graduates at different points in time after graduation, through which we have learned that, on average, UT System graduates have a debt-to-income ratio of about 5.3% one year after graduation. This is a ratio well below those considered even moderately risky (9%) and even below the 6% threshold that is considered cautious borrowing. At 10 years after graduation, the debt-to-income ratio drops to 3.8%, on average. The chancellor is committed to maintaining the affordability of UT institutions and ensuring that student loan debt is, and will remain, manageable for our graduates. Looking at metrics such as debt-to-income ratios at different points in time after graduation is just one of many ways UT System monitors this important issue.