Established 1826 — Oldest College Newspaper West of the Alleghenies
NEWS

Average student debt for borrowers higher at MU than national average

<p>Miami is set issue tens of millions of dollars in refunds to students in light of the novel coronavirus.</p>

Miami is set issue tens of millions of dollars in refunds to students in light of the novel coronavirus.

By Laura Fitzgerald, The Miami Student

Miami University's average debt for graduates is higher than the state average for public universities, leaving some Miami students worried about debt after graduation.

The average debt for Miami borrowers is $30,015, according to the same study. Diane Cheng, associate research director of the Institute for College Access and Success, said this is significantly higher than the state average for public institutions, at $29,436.

Miami's average debt for borrowers is higher than that of other similar Ohio institutions because Miami's cost of tuition is higher. Tuition and fees for in-state tuition for the 2014-15 school year was $14,287, while the national average is $8,794, Cheng said.

According to a study conducted by the Institute for College Access and Success, 53 percent of Miami graduates had incurred student debt in 2015, compared to the state average of 66 percent.

This reflects the growing national trend of rising student loan debt. The national average debt for those who borrowed went up four percent from 2014 to 2015.

Cheng said student loan debt is rising because more students are relying on borrowing to defray the costs of an education. In addition, family income is not keeping pace with the rising cost of college, and states are investing less money in higher education.

"State funding for colleges is much lower now than before the recession," Cheng said.

The amount that a graduate owes isn't always an indicator of how well they will be able to pay their loans, Cheng said. Borrowers may be able to reduce their loan payments with federal loans if their income suddenly drops. That might not always be the case for private loans. Federal loans are generally safer than private loans because federal loans are held to a stricter standard.

"If you fall on hard times, it's really on the mercy of your lender," Cheng said of private loans.

Brent Shock, assistant vice president for enrollment management and director of student financial services at Miami, said student loan debt can be a manageable investment, as long as the student doesn't borrow more than they need.

"Student loan debt is an important investment in a person's future, provided it's done smartly," Shock said.

Enjoy what you're reading?
Signup for our newsletter

At Miami, the office of financial aid is educating students on how to manage their debt.

The office of financial aid started mailing information to students with high loan debt last semester, Shock said. This semester, the office is reaching out to those students and setting up one-on-one counseling.

Miami increased its need and merit-based scholarship offerings by $20 million over the past three years, Shock said. Need-based scholarships increased by about $1.5 million this year.

Shock said student loan debt can be manageable as long as students do not borrow more than they need and they pick a career that will allow them to pay off their debt.

Senior Carlo Costanzo said he will graduate with less than $8,000 in debt. He said that while he did not specifically plan out how to pay for college, he has done so with a job and two merit and need-based scholarships.

"It's a combination of saving and not splurging and working a ton," Costanzo said of his financial strategy.

Costanzo works about 20 hours a week during the year at the equestrian center and full-time on breaks.

"I think having less debt when I graduate is a better pay-off than being a little extra stressed now," Costanzo said.

Junior Morgan Mittler said she will have about $40,000 to $60,000 of debt when she graduates.

She did not receive any need- or merit-based aid, and when her parents called the office of financial aid, they didn't offer her any help. She didn't receive any student loan debt counseling either.

Mittler is worried about getting a job right after she graduates and says she'll probably be paying off her student loans for a long time.

"I feel so much pressure to get a job right after school," Mittler said. "I won't be one of those kids that goes home and sits around for a couple months because I don't have that option."

Mittler said her financial situation impacted her decision to major in marketing, which she picked in part so she would be able to get a stable job after graduation. If she did not have to worry about paying for school, she might have picked a major like writing or Spanish.

"I wasn't exactly sure of the path I wanted to take [when I entered college], but I knew that I had to get a degree in something that would pay well because I was gonna have to pay for school," Mittler said.

She has a job at the equestrian center to help pay off one of her loans and will pay off her second loan after graduation. While she said she would still have a job if she didn't have to pay off her loans, her job does impact her ability to see her family.

Despite this, Mittler was surprised by the average amount of debt Miamians carry.

"I just feel that there's a mentality that the students who come to this school have enough money already," Mittler said. "So I don't think that [keeping student loan debt down] is something they put effort into."

Read More

Trending