National student loan debt triples, Miami average fifth highest in Ohio
Miami University students who are worried about loan debt after college are not alone: the national student loan debt has tripled over the last eight years, according to a recent report from the New York Federal Reserve.
Approximately 54 percent of Miami students are borrowing loans, with an average indebtedness of $27,200 per student according to Brent Shock, director of financial assistance at Miami.
The trend is seen throughout the nation, including Ohio. According to Shock, Miami's average debt owed is fifth in Ohio, behind other four-year public schools like Bowling Green State University, Kent State University, the University of Toledo and the University of Cincinnati. Bowling Green University students owe an average of $32,000 upon graduation, according to Shock.
Junior Taylor Vaughn is among one of many Miami students who takes out loans, and said she expects to owe approximately $27,000 after she completes her undergraduate studies at Miami.
"I'm most worried about how much is going to accumulate after grad school, and since I don't have a clear career path being a Psych major, I'm not 100 percent certain what I want to do yet," Vaughn said.
Shock listed some potential reasons for the national loan debt increase.
"The personal wealth of many families has shrunk," he said. "Many use equity in home to help finance college cost and the equity is based on the value of the home. All across the country, home values have declined in the last four or five years, which means that resource has dried up for some families."
Shock also said the increasing debt could be because more people are in college.
Thomas Hall, professor of economics at Miami, agreed with Shock.
"More people want to attend college, and the cost of college has gone up enormously," he said.
Hall said he is concerned about the economic impact of the increasing amounts of loan debt.
"The concern I have with it is how it's going to impact students who are running up debt now, later," he said. "It will delay their purchases of homes, they might not buy as expensive of an automobile as they would have otherwise. It's going to be a burden that they will have wrapped around their neck for the next couple of years."
Shock said Miami is taking new initiatives next year to help prevent students from accumulating debt.
"Beginning next school year, after a certain threshold of debt has been reached, we will be suggesting, probably via email, that students take a look at an online budgeting tool sponsored by the U.S. Department of Education," Shock said. "It's called financial awareness counseling and it's free."
Shock also said whenever the office of financial assistance speaks to a student, they advise them to look at all other options before borrowing money. In an effort to lower the amount of loans taken out, Miami requires students to accept a loan via BannerWeb, rather than assuming every student wants a loan. Hall has some advice for students who are worried about their loan debt.
"If you're going to take on this debt, educate yourself with a major that will help you pay off that debt," he said. "I would urge students to look into which majors have better earning opportunities when they graduate from college. And they should be sure to graduate. It would be a mistake to run up a bunch of debt and not finish college."
Vaughn, who is expected to graduate in May 2014, said she counteracts debt by working as much as she can.
"I work during school, so I can pay for my expenses at school, and I work a ton during the summer," Vaughn said. "I make enough during summer so that I can pay half of my tuition and all of my rent."
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