“We’ve been fielding more questions about student loans,” said Brent Shock, the financial aid director at Miami University in Oxford. “It’s an unusual conversation to have with families because … while we’ve admitted you here and, clearly, want you here, is this the right place for you financially, if this is going to cause you to leave here with too much debt?”
Shock said Miami University, along with other colleges across the region, are being more upfront with students about how much debt they will incur at school — and what it will take to pay that back. The average Ohio resident who graduated in 2013, has $29,090 in student loan debt.
At Miami, now every time a student takes out more debt, they get an online reminder from the university about how much they already owe on their loans. Shock said the university also advises students not to take out more than they need; some students qualify for federal loans that not only cover tuition and student housing costs, but extra costs such as course textbooks.
Students at University of Cincinnati, for example, this week got their first stab at paying off their student loans during the school’s first ever “financial empowerment summit,” held Thursday.
The school invited financial aid experts to tell students about their loan repayment options and to share other money advice.
Most shocking for graduate student Sangeetha Sudha, however, was the summit’s life game. The game allowed students to pick their profession and the average pay to find out if they had enough to pay for what they expect to spend on housing, groceries, a car payment and those student loans.
Sudha came out of the life game broke.
“I was surprised, my budget was over,” Sudha said.
She said college, where she’s pursuing a master’s degree in computer engineering, has been worth it. Still, she’s worried about paying back her loans and was happy to find out during Thursday’s summit that she can pursue loan repayment plans based on her income once she graduates.
Few students take advantage of or know about loan repayment plans available through the federal government, data shows. Only 14 percent of graduates take advantage of plans that can drastically lower monthly federal student loan payments, a December report from the Washington Post found. The latest federal default rates show 13.7 percent of students default on their loans.
Expect to see more events aimed at helping students avoid loan trouble, said Caroline Miller, the vice president for enrollment management at UC.
“We’re becoming more purposeful,” Miller said of informing students about loan debt. “Back 20 years ago, when a student at a public university could almost pay the tuition by working a summer job, (college loan debt) wasn’t much of an issue. But those days are gone.”
Cincinnati State this summer will roll out new initiatives that advise both current and former students on ways to pay off debt.
Officials there plan to pilot “amnesty days” for former students who have withdrawn from the university but are on the brink of or already in default of their student loans, said La Saundra Craig, the director of financial aid for the college. The amnesty days will allow former students to meet with a counselor on campus and discuss repayment options.
The program will target roughly 1,200 students who are delinquent on their loan payments and 4,500 who have defaulted since 2012, she said.
“We don’t know if it will be successful or not,” Craig said of the program. “We just know that what we have done hasn’t been impactful.”
The college also plans to host more seminars to advise students on how to pay back debt.
But Shock said colleges are somewhat limited in how much they can advise students against making poor loan choices. Entrance counseling to borrow a federal loan is required, but the government prohibits colleges from requiring any additional financial counseling or programming beyond that.
“On the one hand, there’s all this concern about student debt,” Shock said. “But, on the other hand, the levers we can pull are slim.”
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