Getting a Handle on Educational Costs and Borrowing

Dr. Richard Valachovic
In this month’s letter, ADEA President and CEO Dr. Rick Valachovic shares steps ADEA is taking to help our student members and academic dental institutions come to grips with the high cost of education.

Getting a Handle on Educational Costs and Borrowing

If you are a student, or if you are supporting a student, this summer’s news about the rise in federal student loan interest rates undoubtedly caught your eye. These interest rates doubled on July 1 from 3.4% to 6.8% for undergraduate loans and prompted Congress to pass legislation on July 31. The bill, which was signed into law by President Obama, brought interest rates back down to 3.86% for undergraduates, 5.41% for graduate students and 6.4% for parents who borrow through the Federal Stafford Loan program this fall. The rate adjustment was welcome news to many, but the rates are likely to rise again soon as reported in the latest ADEA Washington Update.

I don’t have to tell you that student loan debt has grown dramatically in recent years, prompting many to call the increase a crisis. With the average cost of attending dental school up nearly 50% since 2000, our community is especially cognizant of the burden of student borrowing. That awareness spurred Dr. Jerry Glickman during his tenure as ADEA President (2012–13) to form the ADEA Presidential Task Force on the Cost of Higher Education and Student Borrowing, which issued a report earlier this year.The task force looked for ways to address two related challenges: improving the financial position of dental education programs and containing student debt. Neither of these goals will be easy to attain. The costs of higher education—and of dental education in particular—have risen for reasons largely beyond our control.

  • The pace of technological change and the need for schools and programs to prepare students to practice in a technologically sophisticated environment have added to the cost of dental education. (Think about how many of our institutions have invested in electronic health records, cone-beam computed tomography or high-fidelity simulation equipment alone in the last decade.)
  • Disinvestment by states in higher education has forced many public schools to compensate for lost revenue by raising tuition and admitting more out-of-state students. (I discussed these trends in detail in the February 2012 issue of Charting Progress.)
  • Skyrocketing health care costs have pushed the cost of total compensation for employees higher each year (even as some state institutions have frozen salaries) and will continue to drive up the cost of education in the near term.

The result of these tuition increases is a predictable rise in student borrowing and a concurrent increase in concern among dental educators, especially deans and program directors. In a recent ADEA survey, 100% of the deans who responded said they were concerned about student indebtedness, and I know from my conversations that most of them are seeking ways to lower the cost of dental education. Yet despite this universal aspiration that student debt not become an impediment to the future of the dental workforce, there are only so many ways that deans and program directors can—on their own—mitigate the rise in tuition costs. This challenge explains why the work of the ADEA task force was so vital, and why we are fortunate to have this report to guide our community as a whole.

The ADEA Presidential Task Force on the Cost of Higher Education and Student Borrowing issued six recommendations:

Recommendation 1. Promote financial literacy and ensure that the highest quality financial aid service and counseling are available to prospective and current students, residents and fellows.

ADEA has long provided information to students seeking financial aid, but the report is calling on all of us to expand what we offer in this area. ADEA was already preparing to do just that and this month launched the AAMC/ADEA Dental Loan Organizer and Calculator (DLOC). This tool was first developed by our colleagues at the Association of American Medical Colleges (AAMC) to help medical students make informed choices about their loan repayment options. The AAMC/ADEA DLOC calculator allows users to download information about their federal loans directly from a government database, add information about their private loans and adjust other variables, such as projected salary. Students can then calculate their expenditures under various loan repayment scenarios. The AAMC/ADEA DLOC should prove enormously valuable as students consider career paths and the relative benefits of Income-Based Repayment, Pay As You Earn and a range of federal service-based repayment programs.

Recommendation 2. Continue to pursue funding for scholarships from stakeholder communities.

ADEA will continue to advocate for adequate appropriations for federal financial aid programs, and we will encourage our corporate and philanthropic partners to support the next generation of oral health professionals with scholarship programs of their own.

Recommendation 3. Continue to promote mission alignment with resource management in academic dental institutions.

The report urges academic dental institutions to examine their budgets for redundancies and seek better synergies among programs. These actions take vision and leadership, but recent history tells us that it is possible to find such efficiencies. In 2009, I spoke to a number of deans who were responding to the economic downturn in creative ways. They instituted forward-looking changes to their business models, which enabled them to cope with decreased revenues while continuing to flourish and grow.

Recommendation 4. Explore alternative dental education models.

This exploration is already happening, most visibly perhaps at some of our newest schools and programs, but also within many long-established institutions. As my Charting Progress articles on interprofessional education (May and June 2013) and on massive open online courses (July 2013) make clear, we are living in an era when alternative ways of learning abound. It remains to be seen which new modes of content delivery and skill acquisition are best suited to dental education, but some of these may ultimately prove less expensive than the modes we currently employ.

Recommendation 5. Enhance advocacy partnerships with other dental organizations.

Partnerships play an integral role in how ADEA goes about its business. “The relentless pursuit of strategic alliances for ADEA” has always been my personal mantra. We will continue to form alliances to ensure that concerns related to the costs of predoctoral, allied and advanced dental education programs are addressed.

Recommendation 6. Continue to take a leadership role in representing the interests of ADEA’s membership on issues related to the cost of dental education and student borrowing… .

This last recommendation goes into some specifics, which I won’t detail here. Suffice it to say that we must—and we are—remaining engaged in federal and state advocacy issues that impact how students pay for education and how academic dental institutions are (or might be) reimbursed for the safety-net care provided by their faculty, students and residents.

The ADEA task force report notes that allied dental education programs also face challenges related to cost and borrowing. While we know that within community colleges allied dental programs are among the most expensive to administer, we have less information about the magnitude and shape of allied students’ indebtedness. We are also unsure about how the financial pressures on allied programs compare to those on dental schools. The ADEA Policy Center plans to investigate these questions in 2014. Meanwhile, the task force recommendations give us welcome guidance and an inducement to do more to address the issues of cost and borrowing.

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