Ohio student loan default rate among highest
DAYTON, Ohio (AP) — Ohio’s student loan default rate is among the 10 highest in the country with nearly 30,000 Ohioans defaulting on federal loans they were supposed to start repaying in 2010, a newspaper reported.
A total of 29,500 Ohioans are among more than 600,000 former college students defaulting on student loans for the three-year period, the Dayton Daily News reports. Ohio’s default rate over that time increased from 13.2 percent to 16.2 percent, according to new data from the U.S. Department of Education.
The Consumer Financial Protection Bureau reports that more than 7 million borrowers are currently in default on a federal or private student loan, meaning they missed payment for nine months.
Defaults leave borrowers facing problems that include late fees, added interests, wage garnishment and court costs.
“The consequences of default are so severe,” said Lauren Asher, president of The Institute for College Access and Success.
She said the debt can follow borrowers for the rest of their lives, ruining their credit and making it difficult to buy a car or rent an apartment. It can also limit job prospects and make it impossible to get federal grants or loans to return to school, Asher said.
Ohioans graduate with an average $28,683 in loans, according to the Project on Student Debt. But fees and interest can cause that debt to increase quickly when borrowers don’t find jobs after college and default on their loans.
Ronnie Battson, 57, said he owes $60,000 for a $24,000 loan he took out to fund his computer networking degree from ITT Technical Institute in 2001. The Dayton resident said he has applied for jobs in his field without success and now works as a security guard at minimum wage, while his student debt keeps growing.
“It gets really discouraging,” he said.
The Department of Education advises borrowers in default to contact the agencies billing them, explain their situation and ask the agencies to work with them.
U.S. Sen. Elizabeth Warren, D-Mass, who has proposed changes aimed at helping borrowers, says debt can be very destructive.
“It kills hope. It kills opportunity,” she said.
Warren has proposed restoring bankruptcy protections for student debt and giving graduates the ability to refinance their debt to take advantage of historically low interest rates. She also wants loans be made at no profit to the government.