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“student Loans And Philanthropy: Giving Back Amidst Debt” – Nearly 43 million Americans have student loan debt – from federal loan programs, private institutions, or other sources. The total cumulative amount is approximately $1.7 trillion (Helhoski, 2021).
The economic and social burden that student debt poses to the United States — and the many proposals that exist to alleviate or reform that burden — make national headlines.
“student Loans And Philanthropy: Giving Back Amidst Debt”
This month, the team at the Johnson Center began work on the annual report 11 Trends in Philanthropy; We are preparing to publish the 2022 report in January. We’ve looked at many of the topics we see emerging in philanthropy today, and use extensive conversations and research to determine whether or not what we’re seeing is a “trend” – defined as a topic or issue that is
Lgbtq Student Debt
In looking at the problem of student debt and philanthropy, we landed on the latter. We found a tremendous amount of amazing data, but not much in the way of commentary, attention, or new work on this topic in our sector.
“In looking at the issue of student debt and philanthropy … [we] found a tremendous amount of surprising data, but not much in the way of commentary, attention, or new work on this topic in our sector.”
On a small-dollar scale, the proliferation of online crowdfunding platforms has made it easier for individual donors of all levels to help cover the education costs of others. As of 2017 (the most recent data we could find), more than 130,000 higher education fundraising campaigns on GoFundMe have collected more than $60 million (Vivanco, 2017). LoanGifting (2021) launched in 2013 as an online platform specifically dedicated to letting individuals and families seek help with student loans through online dashboards, gift tracking, and communication tools.
The biggest moves seem to come from individual donors as well. In 2017, for example, Nicki Minaj announced on Instagram that she paid off the loan of eight of her fans (Melas, 2017). In 2019, Robert Smith’s Graduation Day announcement that he would pay off the student loan debt of every member of Morehouse College’s graduating class was met with wild applause and a cascade of op/eds (2021).
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In institutional philanthropy, however, we find no evidence that addressing the student debt crisis is a major program or initiative of any major private funder. Today, addressing this crisis is not a trend.
The data on student loan debt presents a stark imperative for anyone who wants to work on strengthening civil society and advancing social justice. Some key points from research publications illustrate the situation:
“Nearly 90 percent of student loan defaulters received a Pell Grant because their income and wealth were low when they applied to college. Nearly 46 percent of non-borrowers attended a for-profit school, even though they represent only 9 percent of students. Half the losers never finish a degree…” (p. 2).
Innovation exists. Rolling Jubilee (2021) began in 2012 as a project of Strike Debt, an offshoot of the Occupy Wall Street movement. This organization buys debt (all types, not just student loan debt) that has become “delinquent” in non-payment, often at a fraction of the full value of the debt. Then, instead of collecting that debt, Rolling Jubilee informed the original borrowers that their debt was written off. In nearly a decade of operation, Rolling Jubilee has “cancelled” nearly $32 million in debt.
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In Michigan, the Council of Michigan Foundations (CMF) is working with state policymakers, community foundations, and the Michigan Association of State Universities (MASU) to address the problem of scholarship displacement – a reality that can increase a student’s loan burden.
Scholarship displacement occurs when colleges and universities reduce or remove institutional gift aid, other scholarships or grants from a student’s financial aid upon receiving an external scholarship award for a student that places the student’s total amount in scholarships above the student’s financial need. the determine or. School Cost of Attendance (COA) (Council of Michigan Foundations, 2021).
Recently, CMF and MASU convened a group of financial aid directors and foundation scholarship staff in February 2021 to review recommendations for change. The partners have also created a set of tools for foundations, nonprofits, and communities seeking to raise awareness of and address this issue.
In addition, the California Association of Nonprofits hosts the Nonprofit Student Debt Project and accompanying tools. However, we could not find any information about its impact so far.
Giving To Charity
“Community foundations, family foundations, sports teams, schools, individuals, and others dedicate countless hours, dollars, and tips to support scholarships and scholarship recipients.”
Of course, there is also a vast universe of philanthropic scholarships available to students of all backgrounds, fields of interest, and education levels. Community foundations, family foundations, sports teams, schools, individuals, and others dedicate countless hours, dollars, and tips to support scholarships and scholarship recipients. According to data drawn from the National Study of Postsecondary Student Aid (Kantrowitz, 2019), 2016 (the most recent data available) saw the total number of undergraduate scholarships awarded to just under 1.6 million dollars, with the total value of $ 6.1 billion.
Alumni giving, foundation grants, and other sources of philanthropic funding can have a more significant impact on higher education spending than student giving. Interestingly, the COVID-19 pandemic seems to have had an up-and-down impact on this provision in 2020 and 2021.
While some institutions, such as Cornell University (Provost, 2021) and Virginia Tech (Raboteau, 2021), saw record-breaking donations during the pandemic, their experience was clearly unique. A survey of development officers in the United States and Canada conducted by EAB (Martin, 2021) revealed that 54% of institutions surveyed saw a significant decline in overall giving in 2020. A median drop of 9.4% in new gifts and promises (para. 5). ) was driven mainly by a decline in large gifts of more than $ 25, 000 (para. 7).
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“What is more concerning… is the overall drop in the number of donors that development officers have been able to engage during the pandemic: about a quarter of respondents reported seeing a 20%+ drop in their donor pool.”
Most concerning, the report notes (para. 12), is the overall decrease in the number of donors that development officers have been able to engage during the pandemic: about a quarter of respondents reported seeing a 20%+ drop in donor pool.
So far, philanthropic interest in reducing the financial burden of students through the institutions themselves does not seem to be moving much. According to a report by Genevieve Shaker of Indiana University (2020), “The proportion of gifts directed to student financial aid at the institutional level has been relatively flat over the past fifteen years, exceeding nearly 13% in 2018.”
We’ve likely all heard the anecdote that alumni who are still paying off their student loans every month feel little motivation to pay back their alma maters.
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However, research from GiveCampus (2019) suggests the opposite is true. The researchers found that, among 1,000 survey respondents, those college graduates who still paid off their loans were three times more likely (34%) to have made a donation to their alma mater in the past year than those who had no loans. burden (12%) (p. 1).
Perhaps unsurprisingly – and despite Shaker’s findings mentioned above – when presented with a range of causes the gifts could support, “scholarship funding” was the clear favorite, with 57% choosing this option (p. 4).
Social change is often considered to be generational. Change takes time; culture and politics move slowly. But consider 2001 – does it feel that long ago? Somehow, it feels like yesterday, and yet, 20 years is a generation.
In that same 20-year period, specifically from 2000 to 2018, the racial wealth gap between young Black and white college graduates increased by 57%, in no small part due to increased student debt (Smith, 2020). When our challenges can move and gather that quickly, “generation” must come to work today.
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“[F]rom 2000 to 2018, the racial wealth gap between young Black and white college graduates increased by 57%, largely due to rising student debt.”
Philanthropy has the ability to both respond to immediate crises and work on a multi-generational scale. That’s what we’ll need to solve the current student loan debt crisis and help millions of families regain their capacity for education-based wealth generation.
Because we are not just talking about mass debt relief. As Kevin Carey points out, “The American higher education system is a huge debt-producing machine with no one in control… So, if nothing else were to change, the day after any type of mass loan forgiveness came in in implementation, the debt tie would be. begin to rise again” (Carey, 2020).
We are talking about mass innovation – a philanthropy movement could help incubate, finance and implement. This is my challenge to you. Let’s make this a trend.
Thrivent Invests In College Ave Student Loans
Tory Martin, M.A. Director of Communications and Strategic Partnerships Tory Martin joined the Johnson Center in October 2017 and currently serves as director of communications and strategic partnerships. In this role, she is responsible for connecting the work and mission of the Johnson Center with a growing community of philanthropists and…
The burden of student debt and its impact on racial justice,
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