April 2, 2013

2.5% of Ohio State students default on loans

OSU President E. Gordon Gee said less than 1 percent of OSU students with loans default on their debt in an interview with The Lantern on March 25.

Ohio State students have a lower rate of loan default compared to students at other nationwide universities.

OSU President E. Gordon Gee said a lower than average number of OSU students default on their debt.

Of the 11,557 OSU student borrowers who began repayment in 2008, the year the Department of Education began its tracking, 604 have entered into default within two years which means OSU’s rate is roughly 2.5 percent.

OSU’s three-year rate was 5.3 percent.

Gee said in an interview with The Lantern editorial staff on March 25 that OSU students repay their debts at a very high rate, but the national federal student debt is an ugly picture.

“We have $1 trillion in student debt, that’s kind of like a housing bubble,” Gee said. “There are a number of institutions where the numbers have gotten up into the teens or even the 20s and that is very unhealthy for our economy, so we need to focus on that.”

Hoewever, some OSU students said repaying their debts can be difficult.

“I’m going into med(ical) school so I’ll have tons of debt, basically,” said Thomas Smith, a first-year in psychology. “I have a job during the summer and I have a job right now so I’m constantly trying to pay off what I owe. You kind of accept it.”

Doug Harvey, associate bursar at OSU, said the low rate is the result of consistent communication between his office and the students.

“We have an internal collection policy where we’re very aggressive about trying to reach out to those students and make phone calls, send letters, make sure that if the student is going to move on to graduate school or some other type of educational activity that they seek and apply for a deferment for which they might be eligible.” Harvey said.

Harvey said students who communicate with the bursar’s office are the most likely to pay their loans off without issue.

“We often find that a student may be past due on a loan and just not know that they have some options,” Harvey said. “If we can explain those options, we can work with them to get the situation rectified.”

The unpaid loans don’t just affect students in debt.

“Students are going broke to go to schools and schools are going broke,” said Timothy Sharp Jr., a graduate student in art education. “Somewhere there is a missed connection.”

The national rate of student loan defaults within three years of their first repayment was 13.4 percent, according to the most recent data from the U.S. Department of Education. During the same time period, public institutions had a default rate of 11 percent, private nonprofit institutions had a default rate of 7.5 percent, and for-profit institutions had the highest rate with 22.7 percent.

According to the most recent data from the U.S. Department of Education, student debt has nearly tripled to $966 billion over the past eight years.

The university has also faced financial problems with shrinking funding from the state.

“That has happened at a lot of public universities around the country,” Gee said. “We belong to the people of the state. They love us but they don’t fund us.”

www.thelantern.com

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