In June of 2021, I published an article about Texas’ ambitious 60x30TX strategic plan. There are four major goals for the plan that has been in existence since 2015. By 2030, the Texas Higher Education Coordinating Board (THECB) wants the following to be achieved:
- At least 60 percent of Texans ages 25-34 will have a certificate or degree.
- At least 550,000 students in 2030 will complete a certificate, associate, bachelor’s, or master’s degree from an institution of higher education in Texas.
- All graduates from Texas public institutions of higher education will have completed programs with identified marketable skills.
- Undergraduate student loan debt will not exceed 60 percent of first-year wages for graduates of Texas public institutions. No more than half of all students who earn an undergraduate degree or certificate will have debt.
The THECB issues annual reports indicating progress toward these goals. The most recent one was published in July 2021. There has been and continues to be a lot of national discussion about college student loan debt levels without coordinated agreement about what is reasonable and why. Texas, our second largest state in terms of population, took a bold step seven years ago to create goals and report on them each year. In this article, I intend to review the Texas results and comment.
In its most recent report, the goal is restated for clarity. The THECB wants undergraduate students to graduate with manageable student loan debt – no greater than 60 percent of the median student’s wages in the first year after graduation. The goal applies to students who graduate with debt regardless of whether they complete a certificate, associates, or bachelor’s degree. Students must also have wage earnings in the year after they graduate which I assume removes students who continue their education on a full-time basis post-graduation.
There are two related targets that are tracked as well. First, debt should be limited so that no more than half of all students who complete an undergraduate degree or certificate have student loan debt. It’s my assumption that this goal is designed to see that public institutions keep their tuition, fees, and other costs affordable. It’s great to see this goal tracked by Texas. I have written in the past that the U.S. Department of Education’s College Scorecard misleads its readers by not reporting data from students who do not borrow (note: the Scorecard does not even indicate what percentage of students attending an institution borrow).
The second related target is to decrease the excess semester credit hours (SCHs) that students attempt in completing an associates or bachelor’s degree to no more than three excess SCHs by 2030, averaging across all students completing degrees, not just those who borrow.
Student loan debt statistics in the report represent student debt excluding debt incurred by students’ parents. I have been a proponent of eliminating the federal government’s ParentPLUS loans because I believe institutions should not require parents to borrow money for their child to attend college. Taxpayers should not subsidize those loans, particularly since they are subsidizing the institutions as well. There are many affordable colleges. Hopefully, Texas recognizes this misleading statistic and returns to including parent-incurred debt although it is likely that the affordability of public institutions means that few students have parent student loan debt.
In the most recent report, graduates with debt in 2018 had a median student debt-to-first-year-wage percentage of 51 percent, under the target of 60 percent. This represents a decrease from 56 percent in 2013, the base year (note: Because 2020 wage data was not available in order to publish the report in July, data from 2018 graduates are used to match with earnings data from 2019).
In 2020, 55.9 percent of students earning a degree or certificate graduated without debt, meaning 44.1 percent graduated with debt. This was a decline from 48.1 percent graduating with debt in 2016. The explanation given for the decrease is that it may be related to institutional aid practices, changes in state aid policies, or higher family income for some students. What is not evident is whether more higher income families are choosing to send their children to the lower cost public institutions in state.
A graphic sourced from the report and printed below provides more detail on the mix of students who borrow and do not borrow in each undergraduate degree category.
Students earning bachelor’s degrees were the most likely to incur debt, likely because of the longer time it takes to earn the degree. Associates degrees and certificates earned at two-year colleges may also have lower tuition per semester credit hour.
In the table below (also sourced from the report), the percentage of students graduating by debt by year and by credential is tracked, showing progressive declines since 2017.
During the same period, the average number of excess SCHs declined from 19 to 14. The report cites institutional focus on creating guided pathways and improving advising as strategies used to improve outcomes for students (and save time and money).
While implementing these standards, graduation rates have increased across bachelor’s and associates programs. In the table below, graduation rates increased in all categories.
Of note is the longer period that Texas uses to track associate’s completion rates versus the U.S. Department of Education. Given the substantial differences in graduation rates for students earning associates degrees, it is likely that many are attending school part-time while working full-time.
It’s always important before citing data that you review the footnotes discussing the methodology used. As previously discussed, student debt does not include debt assumed by parents which I believe is a flaw in the methodology. At the same time, the debt as a percentage of earnings calculation is only calculated for students who borrow. One statistic that includes private college and university students is the percentage of graduates who borrow since that data is available from the state’s financial aid records. Wages reported do not include wages for self-employed graduates, nor do they include wages for graduates who are unemployed.
I like that the THECB has not deconstructed the institutional ratio of debt to earnings to specific degrees. There are varied reasons why students select degrees including selecting one that enables them to graduate on time or one whose courses are easier to complete. At the same time, 60x30TX has a goal that requires colleges to graduate students with marketable skills. Colleges and universities have been asked to submit materials supporting their analysis as to whether they meet this requirement. It may be possible if the THECB determines that all degrees are marketable at an institution are marketable, they will not deconstruct the debt as a percentage of income and apply it to individual degrees.
Another point I like about the 60x30TX methodology for tracking debt versus first year earnings is that it only tracks first year earnings for graduates. Granted, there are some professions where wages are higher in later years, but those trends are more likely to occur with professional graduate degrees versus undergraduate degrees.
I like the simplicity of the four 60x30TX objectives. I like the fact that there are additional objectives as part of the debt objective. Texas expects its publicly funded institutions to be affordable. It also expects them to provide programs that are marketable to employers. It expects them to provide pathways and advising for quicker times to completion. The reports are easy to understand as well as to track progress. It will be interesting if other states adopt similar objectives.