April 24: Fairbanks Daily News-Miner on Alaska's student loan program:

Posted: Monday, May 01, 2000

There's good news coming from the state's student loan office. Alaska's state-financed student loan program has achieved fiscal solvency. Through the sale of tax-exempt bonds and the repayment of past loans the student loan program is operating in the black.

But there are hidden costs.

The student loan program currently provides money to Alaska youths who wish to attend colleges and universities with no strings attached to the institution's location. The old loan forgiveness program, reducing the balance for students who stay or return to Alaska, has been eliminated. These new student loans must be fully repayed.

But students now have less motivation to return to Alaska once their education is complete. This, in effect, subsidizes the export of many of our best young minds.

The state is currently advertising in the Lower 48 for trained applicants to fill several job vacancies. The qualifications for some state jobs have been downgraded in order for them to be filled. Private employers are also forced to shop Outside for applicants qualified to fill openings for engineers, accountants, physicians, and other skilled positions. These imported workers are claiming some of Alaska's best-paid jobs.

University President Mark Hamilton is taking steps to counter this problem with his Alaska Scholars Program. This program offers a fully paid four year scholarship to the top 10 percent of qualified high school graduates.

Last year, 275 students took advantage of the Alaska Scholars program. This year, out of 830 eligible students, 564 have said they are interested. The scholarships are funded by the university's land management fund. As it stands now, that money will only last a few years. It's hoped that the Legislature, Congress or some other entity will recognize the value in providing more funding.

But does it make sense for the state to help finance the enrollment of Alaska students at Outside institutions offering the same degree programs available through UA? Student loan programs in most states merely administer federal student loan dollars or arrange loans from private institutions.

Alaska is one of the few states, if not the only one, that puts its money to work subsidizing enrollment at out-of-state schools. Providing loans for alternatives to the educational resources available here is a practice that needs review.

At least the old forgiveness program had the dual benefit of encouraging higher-education and providing strong incentive to put that knowledge to use in Alaska. If we can't afford a forgiveness policy, then perhaps limiting Outside loans to those required by students seeking specialized training not available in Alaska, such as law or medicine, would still be justified.

This would give students the freedom to pursue careers for which training is not available locally.

Travel is broadening and an education in itself. The state Commission on Post Secondary Education's stated philosophy that Alaskans should be allowed to pursue their studies Outside if they choose is noble and generous. However, that policy of favoring educational freedom of choice over incentives for retaining Alaska's youth, our most precious resource, has a high price attached.

Exporting our best young minds in the face of workforce shortages here at home creates a trade imbalance of the worst kind.

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