Many feel student loan programs need improvement

According to the Consumer Financial Protection Bureau (CFPB), college graduates have amassed student loan debt in excess of the $1 trillion mark for the first time, ranking second only to outstanding home mortgages.

Additionally, the Project on Student Debt (PSD) reports that 70-percent of 2012 graduates owed, on average, $29,400, while more than half-a-million members of the class of 2010 have defaulted on their loans.

Kevin Multop, director of financial aid at Central Oregon Community College, agrees that the scope of student borrowing is a national concern and needs to be addressed.

"We are struggling with student default rates just like all other educational institutions," he said, adding that he senses that students are borrowing less because of the attention being drawn to the issue.

In July of 2013, the Oregon Legislature passed HB 3472, directing the Higher Education Coordinating Commission to design a pilot program, named "Pay it Forward, Pay it Back" to, potentially, replace the current system of tuition and fees.

Multop points out that the program is not an alternative method of paying for college tuition, directly, but is, instead, a state-based income tax. The bill proposes a 3 percent tax for four-year graduates, and a 1.5 percent tax on two-year graduates. Annual payments would start out at an estimated $800, and increase each year, for up to 24 years, or until tuition costs are repaid.

Multop is not convinced that such a program, as proposed, is viable, wishing instead to focus on the cause for student defaults.

"Many feel that student loan programs need a lot of improvement," he said, "but I continue to be positive about the current federal programs that are in place."

"There is no reason why students should go into default," he added. "I feel there is a breakdown in communication between the student borrower and the loan servicer as to options when facing possible default. Students simply get overwhelmed and walk away."

The National Center for Education Statistics estimates the cost of attending COCC for a full academic year at $15,960 for resident students, and $7,404 for students living at home.

For COCC students receiving aid, 54 percent receive grants or scholarships averaging $4,942; 52 percent receive Pell grants averaging $4,506; and 54 percent receive federal loans averaging $7,498.

Darin Kessi, counselor at Crook County High School, said that students seem to have an ever-increasing awareness of college costs.

"It seems that more of our students, and their families, are looking at college with 'the best value' as one of their highest factors in choosing where to attend," he said, adding that COCC is becoming a more popular choice.

"Every year we've seen an increase in the number of our graduates enrolling, and attending, COCC or other community colleges," said Kessi. "Community college still offers the best value, after high school, for our students, in terms of the finance piece."

The National Student Loan Data System reports that 26.3 percent of COCC 2010 graduates defaulted on their loans in 2012.

Given those statistics, Multop explained that the college has partnered with American Student Assistance to offer students help in managing their loans.

"I look forward to seeing statistics on how this program is helping," said Multop, "and I hope to see a tangible reduction in student loan defaults."

From Kessi's perspective, the high school's Advanced Diploma program is another option available to CCHS's graduating seniors.

"Our district covers a portion of the student's expenses to attend COCC," explained Kessi, "and includes the cost of tuition and a number of fees, up to 36 credits for a school year."

Kessi noted that students must achieve a C average and, after their first year, use more traditional resources to pay for schooling.

Multop would like to see the conversation expanded, to include overall education funding.

"The decrease in grant money, along with less state funding for education, is a double whammy," he said. "That's why we end up talking about student loans, because costs have become the burden of the students."

Kessi agrees, saying that attending college has become more difficult.

"It seems to me that more of our students are working, and attending college, at the same time, in an effort to offset the need of taking on student loans," he said.

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