Student loan debt tops credit card debt, but Ohio State still below average
Published: Sunday, February 17, 2013
Updated: Sunday, February 17, 2013 22:02
National student loan debt has exceeded credit card debt for 2012, and as graduation nears, the question of how to pay back debt is on some students’ minds.
Student loan debt reached $920 billion last year, with credit card debt at $796 billion, according to a Wednesday webinar hosted by Campus Progress, a national organization for students that promotes solutions to political and social issues.
Other sources reported that people nationwide hold more than $1 trillion in private student loan debt.
Ohio State seniors on average graduated with $24,840 in student loan debt in 2011 according to the Office of Student Financial Aid, below the national average of $26,600 for undergraduate students. It takes a student with $26,000 in student loan debt about 20 years to pay it off on average, according to Campus Progress.
The webinar was focused on an opportunity for reform. The campaign, “It’s Our Interest,” is devoted to pushing policymakers to consider allowing students to refinance student loans.
“Congress has more people with student debt than ever before,” Brian Stewart, spokesman for Campus Progress, said in the webinar.
Stafford Loans, the most common student loans that are backed by the government, have a lower interest rate, but starting July 1, interest rates for these loans are set to double to 6.8 percent.
“The impact of interest compounding over the life of the loan (which can be a 10- or 20-year period) can significantly increase the total amount that needs to be repaid,” said Diane Stemper, executive director for student financial aid at OSU, in an email.
Refinancing student loans, according to Campus Progress, could save $14 billion in interest and would produce $21 billion in economic growth.
Stewart said along with these benefits, refinancing student loans would help encourage higher education.
Beth Bodenstein, a sixth-year in sociology, will graduate next spring with about $80,000 in student loan debt. She will begin paying interest on these loans six months after graduation.
“I know my parents are going to help me out because they said they would, it’s not like I am completely on my own. But paying them off the second that I graduate, I don’t think I would be able to,” Bodenstein said. “I just don’t want my parents to feel obligated to bail me out.”
Michaela Martin, a third-year in human nutrition, relies on loans to help pay for her education. Martin plans to work as a resident adviser next year to help pay for housing costs.
“Without my loan I would not be able to afford school and I would have to work a lot,” Martin said.
Stemper said students should think carefully about how much money they borrow.
“Borrow enough but not too much,” Stemper said in an email. “What may seem like a small amount of loan can add up to a much higher amount being repaid.”