The cost of college is rapidly increasing, but a great New York Times article exposed a new report showing the cost is anything but uniform throughout the U.S., varying greatly state to state and region to region.
A research group called the Institute for College Access and Success reported that students attending schools in the East and Midwest borrowed significantly more money than students attending schools in the West and South.
In an online database, the institute posted college-specific figures highlighting the varying costs by region. States that boast the highest student debt are New Hampshire, Pennsylvania, Rhode Island, Maine, Minnesota and Ohio. Delaware wins the highest debt per borrower – almost $34,000.
On the other hand, graduates from schools in Arizona, California, Louisiana, Nevada, Utah, and Wyoming are the least likely to have student debt, and if students did borrow, the debts were small. New Mexico wins the lowest debt per borrower at about $18,000.
Obviously some schools bring different educational strengths, prestige and sticker prices, but the rapidly increasing growing debt for recent graduates brings up a bigger question – is the current funding model for American colleges really the best?
Companies like Lumni believe there is a much better way. They literally invest in an individual to go to college. For example, they will pay a student’s college education in exchange for a small percent of their income for a fixed period of time after they graduate. This means whether the student makes $30,000 or $200,000 annually, they should always be able to keep up with payments. And, the graduates earning high salaries can make up for those making modest incomes.
In an earlier post, we mentioned that the state of Oregon was trying a similar approach. Legislation was proposed earlier this year to allow college students to attend Oregon public universities for free in exchange for 3 percent of their income for a fixed period of time after graduating. This would work the same way that Lumni operates. If Oregon and Lumni can prove success, you can expect others to replicate the model. And in a few years, the way government and companies fund college educations may be disrupted, and the student debt problem may be solved.