How does a $28,683 bill sound?
That’s the average amount of what an Ohio graduate will be faced with once the good ole glory days of college are over.
Ohio has been ranked No. 7 in the top 10 worst states for student debt, according to CollegeInsight. The report says that 68 percent of graduates will have obligations to a lender and statistics show more than 40 percent will struggle with repayment within the first five years out of college.
Among the states listed in the report with the highest student debt, New Hampshire comes in at the top spot with an average of $32,440 in loans and every three out of four college students facing this debt.
The other states with high student debt are: North Dakota, Minnesota, Pennsylvania, Iowa, Rhode Island, Connecticut, Maine and South Dakota.
The best states for student loan accumulation are: Hawaii, Utah, Nevada, California, Arizona, Louisiana, Tennessee, Oklahoma, North Carolina and Wyoming.
The main problem with higher education is tuition. In the past 30 years, the cost of an undergraduate degree has increased by 1,000 percent, according to the Center for American Progress.
As of 2012, more than half of Americans borrowed money to pay for the costs of education. American loan borrowers collectively owe nearly $1 trillion.
Sounds like the American dream, doesn't it?
A look at The ‘Student Debt Crisis’
- As of 2012, there is roughly $1 trillion in total outstanding student loan in the U.S., according to the Consumer Finance Protection Bureau.
- The federal debt is at $16.7 trillion, meaning student debt accounts for about 6 percent of the nation's debt, according to Forbes.
- Of the 37 million borrowers who have these outstanding student loans, 5.4 million of them have at least one late payment.
- As of 2012, $864 billion dollars were disbursed through federal student loans. $150 billion was given through private organizations.
- There is approximately $85 billion in loan debt that is past due, according to the Federal Reserve Bank of NY.
- For every loan borrower who defaults on his or her loans, at least two more become delinquent without default, reads a report from the Institute for Higher Education Policy.
- Two out of five borrowers (41 percent) are delinquent at some point in their first five years after college.
- A year ago, FinAid.org figures American student debt is growing at a rate of $2,853 per second. They predicted the debt would reach $1 trillion. Currently, it's just over that mark.
- The U.S. Bureau of Labor Statistics reported that college costs are rising faster than the cost of medical care.
A Local Look:
2013-2014 full-time, in-state student tuition costs:
Alexis Mosher, 23, a Youth Leader at the Butler County Juvenile Detention Center had taken out student loans during her undergraduate time at the University of Cincinnati.
After her graduation in 2012, the job market for recent grads was unfavorable. "I wasn't full-time when I was supposed to start loan repayment and with rent and other bills, I just couldn't afford to start," Mosher said. "The amount they were starting me out with, working part-time, was just insane."
Now that Mosher has obtained a full-time position, she is prepared to begin repayment and says she will be able to pay them no problem.
Due to factors like the economy and unemployment, many students are caught in a struggle. Forty-eight percent of 25-34 year-olds say they are unemployed and struggle to repay loans while 70 percent say that in general, over the last four years its harder to make ends meet, according to American Student Assistance.
What's being done?
Lenders have expanded the rules for repayment obligations and the federal government has been attempting to battle the growing problem.
Income-based and 'pay as you go' programs, forbearance and deferment, and extensions on repayment times are all options for repaying debt.
In 2010, H.R. 4872 'Health Care and Education Reconciliation Act of 2010' was signed into law by the President. The law ended private federal lending of subsidized loans and approved the expansion of Pell Grants, according to the Federal Bank of NY. Despite this, some students who applied through FAFSA saw Pell Grants cut last year, for anyone who wanted to take more credits or take summer classes.
Income based programs used to cap at 15 percent of total monthly income. Part of President Obama student reform initiatives, beginning in 2014, new borrowers will pay no more than 10 percent of disposable income and any remaining debt after 20 years will be forgiven. This reform is only for future borrowers, although President Obama is attempting to include any current student debt holders. See more here.
Obama passed a bipartisan bill that establishes variable interest rates on Stafford loans but caps the rate at 8.25 percent. The variable rate each year will be set to the rate on 10-year Treasury notes, plus 2.05 percent.
Other legislation is currently being debated, which you can track the progress of at Govtrack.us. Bills such as H.R. 1330 'Student Loan Fairness Act' would combine two bills and establish a '10/10' standard of repayment.
Although many economists say the crisis is on the unwind, current borrowers would disagree. Most current legislation passed isn't intended for current loan holders, only future graduates in debt.
For more information and resources on the student debt crisis, visit:
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Bob is highlighting what's working and what needs fixing from preschools to doctoral programs. A Cincinnati native, Bob was previously a regular contributor to the New York Times and was a staff reporter on many beats through 10 years at the Cincinnati Post and Kentucky Post newspapers.