The Ohio State University Board of Trustees meets Friday to consider the next round of tuition increases. Several other state colleges and universities have already raised tuition and related costs, prompting students and their families to sharpen their pencils and determine how to pay the bills.
The cost of college has risen so rapidly in recent years that the majority of students receive some type of financial aid. While scholarships, grants and other types of aid which do not have to be repaid are available, more and more often, students and their families are turning to loans which are about to become far more expensive. Interest rates on the student-only Stafford Loan, the least expensive federal education loan, and the parent-only PLUS loans are reviewed annually and reset at the end of May. Effective July 1st, the rates on those loans are expected to jump by two percentage points.
David, who prefers not to give his last name, is a student at Ohio State and says he goes to school full time and works full time to pay the bills. Ohio State University Director of Financial Aid Tally Hart says students in situations like his are putting themselves at risk. Hart says students who try to go to school full time and work full time do least well academically. But David is only a sophomore and already has a $3500. loan. He's worried about an estimated debt of $14,000 awaiting him when he graduates.
Hart says the typical student at Ohio State who finishes a four-year degree owes nearly $16,000. in student loans. And, Hart says, staying in school is an essential part of being in a position to repay those loans. "Our default rate is at an all-time low. That's because our retention and completion rate is at an all-time high."
But student loans are not the only form of debt students are likely to encounter on-campus. OSU Economics Professor Lucia Dunn is concerned about credit card debt and says students are "just like everybody else only more so. They just don't realize how fast this debt can add up and what the ramifications are when the time to repay comes."
Dunn says students are not prepared to deal with the consequences of credit card debt. "Many student have no good training from parents who are often having problems with credit cards themselves."
Dunn says credit card companies put considerably more pressure on students to repay than Sallie Mae and others issuing student loans. She says students have told her about how credit card collectors threaten them. One young woman was so worried that she dropped out of school for a year to pay off her credit card debt.
Dunn says, defaulting on a credit card is one thing, but defaulting on a student loan means you never get another student loan for the rest of your life.
Tabitha Hickman, in her first year at Ohio State, says "If you drop out of college because you can't afford to pay for it, you'll never get back into college because you can't pay for it." Hickman is an out-of-state student who calculates her debt at graduation to be 120-thousand dollars.
"You just have to look the other way and say, it's a necessity."
Special thanks to WOSU's Sabrina Hersi- Issa and Kara Romangnino for production assistance with these stories.