College life and debt seem to go together for many students, but a national student loan debt which has nearly quadrupled in 10 years has many starting to take notice.
Lucia Dunn, a professor in the Department of Economics, said debt is a serious problem among college students.
“It’s hard enough when people get debt at any stage in life, but to get debt so young, when you’re just starting out, does have more implications,” she said.
“It causes a lot of students to drop out because they have debts they have to pay, and they have to go to work,” Dunn said. “Some work to the extent that it’s an interference with their academic studies — it’s hurting students’ grades, and hurting students’ potential.”
A large amount of debt is in the form of student loans. A recent survey by Nellie Mae, a student loan company, said students across the nation now acquire an average of $27,600 in educational debt — three and a half times what it was a decade ago.
“At least 50 percent of Ohio State students who have graduated have used student loans,” said Tally Hart, director of the Office of Student Financial Aid.
Hart said the loans are mainly a problem for students when they don’t graduate.
“The smaller the amount, the bigger the problem, because students who have small amounts of loan debt are often students who don’t complete their program,” she said. “The larger the amount of loans taken out, the more likely they are to repay it because they will graduate.”
Students who have trouble paying off college loans also have a large amount of credit card debt, Hart said.
While many students place greater importance on paying off their credit cards, Dunn said they should put their student loan debt first.
“If they default on their student loan debt, they will never be able to get a student loan again,” Dunn said. “Default on a credit card, and somebody else around the corner will give you another credit card.”
Because credit card companies pressure students more, they feel they have to pay those debts off first, Dunn said.
“It’s such a part of our expectations to have debt,” said Jeremy Wells, a graduate student in higher education.
Wells said debt may cause some students to finish school later than expected.
“Students may be working longer hours or taking an extra job, so it might take them longer to graduate,” he said.
Students can take steps to manage debt.
“It’s really important to know what debt has the highest interest rate,” Hart said. “Make an effort to keep all your loans on good repayment status, try to find ways to economize, and complete your degree as soon as you can.”
Dunn said students should use credit wisely: “Use debt when it’s something you really need — like textbooks or gas in your car to get to work — then it’s being used with an investment.”
