Chris Miller of Kent said he didn’t fully grasp the hole he was digging when he studied public relations at the University of Akron.
By the time he graduated 18 months ago, he was $85,000 in debt, some of it for loans he took out to cover living expenses. But that is not the worst of it.
Because he wasn’t earning enough money to make his monthly payments, he put the loans in forbearance — in other words, on hold but still accruing interest — and they have ballooned to $102,000.
He said he makes $50,000 working for a dot-com company — good money, he admits, in a job he absolutely loves.
But he cannot afford the $1,283 monthly payments that he will face when his forbearance ends this fall.
“I realize I’ll never be able to afford a home. I do take the blame [for my debts], but I need something realistic” to repay, he said. “I’m never going to escape.”
He is not alone:
Between 2004-05 and 2009-10, student debt surged nationwide and is hanging over a generation of young people and their parents.
One in 10 now has debt higher than $40,000, but that’s just for those with loans that are part of the federal student loan program. Three-quarters of Miller’s $102,000 is through private loans, for which data reporting is unreliable, and his parents are co-signers.
Ohio ranks seventh
Ohio is a standout. For nearly two decades, average tuition at public universities hovered at the fifth- to seventh-highest in the country, according to federal data, slipping only recently to 13th because of improvements in state aid during the administration of former Gov. Ted Strickland.
But that has left a toll.
The state ranks seventh overall for the percentage of students who have borrowed — 68 percent — and seventh for average student debt at graduation — $27,713 — according to the nonprofit Institute of College Access and Success.
The national average debt is $25,250.
Among public colleges, debt in the last 10 years grew the fastest at the University of Cincinnati (58 percent to about $26,500) and the University of Akron (48 percent to about $22,100), according to the numbers the institutions reported to the U.S. Department of Education and Common Data Set for magazine rankings.
At Kent State, where debt was the second-highest among the public institutions statewide, financial aid director Mark Evans chalked the borrowing up to many factors:
• A hike in the federal loan limit from $23,000 to $31,000, allowing students to borrow more.
• Lower state support of Ohio’s public universities, causing universities to hike tuition and fees.
• State reductions in the Ohio College Opportunity Grant, from $2,496 to $1,088, in 2009-10. The grants, available to Ohio residents, are based on family need.
“If you were to take a look at our large generation of high-need students, our two-year live-on-campus residency requirement, reductions in state aid, there’s an explanation, I would believe,” he said.
UA financial aid director Michelle Ellis said that more students are using loans to fund living expenses on top of tuition and fees.
“Folks are strapped,” she said. “That could be because of the kind of student who comes to UA,” often the first in the family to go to college and from families of limited means.
Glenn Daniels of Akron expects to owe at least $50,000 when he gets his bachelor’s degree in communication from UA. He believes a degree will help him to fulfill a big goal: to own a fitness gym.
“It will help me look better when I go into a bank,” he said. “It fits me for what I’m trying to do.”
He said he’s “probably going to dread it when it’s all said and done.” But as a compounder for Goodyear, he is in a good position to pay the loans back right now.
Private schools higher
Average debt in states in the Midwest and East tends to be higher because of the proliferation of private colleges, according to research by the Institute of College Access and Success.
Ohio is no exception. Debt is higher at private schools, where the published tuition rate is $30,000 to $50,000 — at least three times more than public universities.
At Ohio Northern University in Ada, where student debt was the greatest, the average bachelor’s degree graduate who borrowed owed almost $50,000, slightly more than the $44,000 yearly cost of one year of attendance.
That debt level pushed Ohio Northern into the Institute of College Access and Success’ Top 20 list.
Larry Lesick, ONU vice president of enrollment, said the university tries to hold down debt. One way is to alert students when they’re making decisions, such as changing majors, that could delay their graduation. Last year, ONU steered almost 150 wayward students back into line, he said.
Still, he is amazed that students have little understanding of the financial aid process and what it could mean later.
Mom and Dad, it seems, handle the financial aid process and the student may be largely unaware of what’s going on.
“We do an entrance interview” to bring them up to speed, Lesick said. “How much of it sticks – that is questionable.”
BGSU tops state list
At about $28,200, KSU graduates with loans were in hock more than those from any other state university except Bowling Green, where the average debt was about $31,500.
That puts both universities above the state average of about $27,700 and national average of $25,250, according to the Institute of College Access and Success’ Project on Student Debt.
“It is of great concern,” said institute program director Matt Reed. “It affects what students can do when they come out of college. And the prospect of taking out a lot of debt may deter students from going to college in the first place.”
Nationwide, two-thirds of college graduates had federal and private loans in 2010, with students in states in the Midwest and Northeast owing the most money.
Americans have amassed more than $900 billion in student loan debt — more than all of the credit-card debt nationwide.
But others say they are worried about the cost of college and whether they can afford it.
Sharon Budin said her daughter, Mariah, may not be able to enroll for her sophomore year at UA.
The $18,000 annual cost of tuition, fees, room and board is too much for her family, as she is a Presbyterian minister and her husband is an activities director at an assisted-living facility.
If Mariah’s grandmother does not agree to co-sign a loan for another year, Mariah, who is majoring in photojournalism with an eye to working in the entertainment industry, may have to enroll at Cuyahoga Community College and commute from the family home in Beachwood, as her two older siblings did.
“It’s been a struggle,” Sharon Budin said. “I just don’t know how the middle class, and we’re on the bottom rung of the middle class, is supposed to educate their children.”
Kent State sophomore Alex “Sasha” Bratslavsky of Mayfield Heights expects to owe more than $30,000 when he finishes his bachelor’s degree in pre-medicine. Scholarships and grants covered some of his tuition and fees in his first year.
“It’s room and board that’s killing me,” he said.
He chose to live on campus to get the full college experience. That cost may be nothing to worry about, as he would command a high salary as a physician.
But it’s a “very risky business,” he said. “If [medical school] doesn’t work out, then I’m in big trouble.”
Some students and their families do not know how much a graduate can earn with a certain degree, so they miscalculate how big a loan they can repay, said Joseph Frizado, vice provost for academic operations and assessment at Bowling Green.
“We do have students with a lot of unrealistic dreams,” he said. “With the turn in the economy, it makes the realistic dreams that much harder.”
Carol Biliczky can be reached at cbiliczky@thebeaconjournal.com or 330-996-3729.
David Knox, former computer-assisted reporter, provided the research on debt.
