Majority of students take on loans to learn

Caelin Mills

According to the Climate Survey conducted at Kent State last spring, more than half of the 4,754 student respondents used loans to pay their tuition.

Additionally, of the 50 percent who reported experiencing financial hardship — 2,390 respondents — over 60 percent of these students cited difficulty affording tuition.

In Ohio, the average college student in 2015 graduated with $30,000 in debt, according to a report conducted by The Institute of College Access and Success.

The federal government offers financial aid for higher education through the Free Application for Federal Student Aid (FAFSA). FAFSA measures the financial needs of a student.

According to Mark Evans, director of Financial Aid at Kent State, the form doesn’t take into account important factors such as the value of one’s home or mortgage payments.

“There is no perfect formula because every family’s situation is different,” Evans said.

Daniel Hawes, professor of political science at Kent State, said he doesn’t believe students know enough about loans and debt before starting college.

“There’s a lot of support by universities to help students find financial aid,” Hawes said. “There’s not a lot of support in teaching students or showing them the consequences of that aid.”

Curtis Reynolds, professor of economics, agreed that students aren’t always aware of the consequences that come with taking out thousands of dollars in loans.

“My guess is (that) students don’t know that much about what debt is,” Reynolds said. “There’s been some moves by the Department of Education to try and clarify some of those things such as what the loans are, what the debt is going to be and what their payments are going to be like.”

Cole Hochron, a sophomore exercise science major, said he is currently $25,000 in debt. He estimates he will have between $40,000 and $50,000 to pay back when he graduates.

He believes the most stressful part about taking out loans is making payments on time, but isn’t worried about not being able to pay off his debt.

“I guess I live optimistically,” Hochron said. “I’d like to say that I’ll have a job, and I’ll be able to pay it off over time.”

According to Evans, around 90 percent of the incoming freshmen class at Kent State this fall will receive some type of financial aid through the university.

He said the university informs students of their financial aid options and resources through presentations before students begin school during Destination Kent State (DKS).

Evans believes the biggest problem with incoming students is they don’t start saving for college early enough and don’t search for scholarships.

Sophomore nursing major Renee Deckman said more scholarships are available to certain majors compared to others. She said she is currently $10,000 in debt and will graduate with between $30,000 and $40,000 to pay back.

“I know that for nursing they do give out a lot of scholarships, but I feel other majors don’t,” Deckman said. “I transferred from biology to nursing, and in biology I didn’t get much money.”

Hawes cited lower state funding as one of the main causes of increasing tuition and student loan debt.

“In the 1980s, over 60 percent of our total revenue came from the state — now it’s 14 percent,” Hawes said, “At the same time, costs continue to go up. You have inflation, pay raises, infrastructure (and) more students, so the costs keep going up, state funding goes down. That has to be filled in somewhere and it’s tuition.”

Reynolds believes the inflation is also because the return on a bachelor’s degree is increasing as well, making it worthwhile for people to go to college. The increased demand for a college degree drives up the price.

“The best estimates are that each year of schooling —  assuming that you graduate — raises your annual income by about 10 percent,” Reynolds said.

Hawes agreed, saying the importance of a degree is it brings opportunities. But students have to be sure they choose a major where there’s a demand for jobs in that field.

“On average, the degree more than pays for itself easily, but maybe not for everyone,” Hates said. “Some individuals can’t find work in their art history major. That’s not to say people shouldn’t major in art history. But there’s not a lot of jobs for that out there.”

Reynolds believes the biggest reasons students run into debt problems are due to dropping out, expensive schools and for-profit schools with low graduation rates.

He thinks it’s unclear whether student debt is the cause of graduates becoming less likely to buy a house or put money into a retirement fund.

Hawes called these the long-term economic consequences of student debt, as those approaching retirement usually have savings and a home as their largest asset they are able to sell.

He said students are unable to buy homes because they can’t afford a down payment due to their loan payments, or can’t get approved for a mortgage because they’re already in debt.

Hawes said policies such as loan forgiveness programs and income-based repayment programs are effective in managing the growth of student debt.

This allows for a graduate who works a certain amount of years in the public sector and makes 10 years of payments to have their federal student loan debt forgiven, according to Hawes. 

“Those are the policies that currently exist, and I think students need to be more informed about their existence,” Hawes said.

While the university hasn’t experienced increased default rates, many across the United States have.

If a school’s default rate exceeds 30 percent, the institution is in danger of not being able to accommodate federal financial aid.

Evans said there are many options available to the students experiencing this and the financial aid office is the first place to start.

“If a student has questions or concerns or is struggling, the worst thing they can do is not come and talk to us,” Evans said. “Staff will try to work through all the options we have to help a family continue and be successful.”

Caelin Mills is the student politics reporter, contact her at [email protected]