Ohioans saddled with too much student debt
Posted July 27, 2017 in Press Releases
New campaign seeks better protections for student borrowers
More than 687,000 Ohioans owe $19 billion in federal student loan debt. In order to pay their loans back, they must traverse a dangerous climate of repayment scams and predatory loan servicers that could put them in even deeper holes.
In 2014, an estimated 42.2 percent of Ohioans with student debt couldn’t fully repay their loans due to financial difficulties or problematic loan terms. Twenty-seven percent were delinquent and 15.7 percent were in default. Student borrowers need protection more than ever, but policymakers have rolled back state and federal regulations. The Ohio Student Association and Policy Matters Ohio are joining forces to protect student borrowers. Today they release the campaign’s first report.
"This country was built on the idea of freedom and mobility, but student debt is making that impossible for many people my age,” said Prentiss Haney Executive Director of the Ohio Student Association. “It's going to take a statewide movement to get student debt under control, so that’s why the Ohio Student Association is launching the student debt liberation campaign this fall."
Over the next few months, Policy Matters and the Ohio Student Association will research student debt in Ohio and organize those directly affected by the problem. The campaign will culminate in a policy platform that helps people repay their loans without being taken advantage of or scammed.
Loan servicing companies and for-profit colleges are two of the biggest drivers of student debt, delinquency and default. Under the Obama Administration, the U.S. Department of Education implemented a series of regulations aimed protecting borrowers from abuses of loan servicers. The Consumer Financial Protection Bureau sued the nation’s largest loan service Navient, (formerly part of Sallie Mae) for failing borrowers at all stages of repayment.
The Obama administration also created rules that curb the high-debt-to income ratios and fraudulent job claims made by some for-profit colleges that contribute to default. Now President Trump’s Secretary of Education Betsy DeVos is rolling back many of these protections.
“Ohio borrowers who get caught up in predatory practices face serious financial consequences like lowered credit scores,” Policy Matters State Policy Fellow and report author Victoria Jackson said. “Other states like Connecticut, Illinois, and Pennsylvania have stepped up to protect their residents and it is past time for Ohio to do the same.”