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Loan rangers

Oklahoma college graduates struggle with soaring student loan debt.

James Cooper April 3rd, 2013

College isn’t easy. And it sure isn’t cheap. Personal education debt in the U.S. swelled to $914 billion last summer, according to a 2012 report from the Federal Reserve Bank of New York.

OU campus
Credit: Mark Hancock

A big chunk of that, not surprisingly, is the tab for college loans. Since 2008, the study found that student loan debt has “increased by $303 billion, while other forms of debt fell a combined $1.6 trillion.”

In the aftermath of the worst recession since the Great Depression, young college graduates in the millennial generation — those under age 30 — face not only a 12.5-percent national unemployment rate in their age group, but also mounting debt on their student loans.

More troubling, the report found an uptick in the rate of delinquent student loans, from 8.7 percent to 8.9 percent in the second quarter of 2012.

The problem is especially pronounced in Oklahoma. A U.S.

Department of Education report last year revealed that Oklahoma’s student loan default rate in 2010 was a staggering 13 percent, the fifth-highest default rate in the nation.

While Oklahoma’s unemployment rate is lower than the national figure, recent college graduates often find difficultly securing work that pertains to their degree, forcing them to take jobs outside their field and, often, for much less money.

The debt
And where the burden to fund higher education once fell on state governments, legislatures today — and Oklahoma is no exception — have decreased higher ed funding. Costs are shifted onto colleges and universities that, in turn, pass higher tuition costs onto students and their families.

During the 1980-81 academic year, undergraduate tuition and fees to the University of Oklahoma were $613 per year. By 2012-2013, it was $8,705.

Oklahoma State University undergraduates paid $600 to attend during the 1980-81 school year. In the most recent academic year, incoming freshmen there paid $7,621.

Behind those numbers are students like 27-year-old Steven Hopkins, who recently attended Oklahoma State University to work on his master’s degree in English.

“I have a wife and two kids,” he said. “My wife stays home with the kids. We have student loan debt, but we take out as little as possible. We’ve been on welfare the whole time, and my wife has gone years without medical insurance. We’ve gambled really big on my master’s.”

While college debt for students in the Sooner State is below the national average of $25,250, Oklahoma’s college students graduating in 2011 still had an average of $20,708 in student loan debt, according to the nonprofit Institute for College Access and Success.

The report notes that the average debt of OSU graduates sits at $21,204 with 51 percent of the university’s students taking out student loans. At OU, 45 percent of students graduate with debt, with the average debt costs to attend the university at $17,757.

Steven Hopkins and his family

“I was usually working two part-time jobs and, at one point, three,” said Jill Holzbauer-Frazier, who graduated from OSU in 2009. “In spite of that, I still had to take out loans just to pay for all the added fees, books and cost of living. I didn’t live luxuriously by any means. I rarely ate out, drove an old car, didn’t have fancy tech stuff.”

After graduation, the 25-yearold Holzbauer-Frazier struggled for more than two years to find full-time work.

“I continued working food service, as that was where I had the most previous employment experience, so it was all I could really get,” she said. “My job now pays enough for me to live off of but not to put away for savings, 401K, retirement, etc.”

‘My mom made too much’
Ashley Reynolds paid her college tuition by turning to private student-loan lenders, borrowing money with higher, variable interest fees and less regulation than federal student loans.

“It’s the private ones that I had to take out,” she said. “My mom made too much for federal aid or OHLAP (Oklahoma Higher Learning Access Program), but not enough to actually help me.”

Any Oklahoma student whose parents earn less than $50,000 annually might qualify for free tuition through OHLAP, also known as Oklahoma’s Promise.

Reynolds, who graduated recently, said the private student loans have caused serious struggles.

“It’s a very predatory situation, and you don’t know any better at that age,” she said. “And they’ll never bail us out because we aren’t banks. That’s what makes me most mad. Not that I’m a huge fan of bailouts — but when they do them, it’s crappy.”

Private or public good?
A broader question exists regarding higher education funding, according to Jon Marcus, a reporter with the nonpartisan, nonprofit education news site The Hechinger Report.

“Is it a private good, or is it a public good?” Marcus asked in a recent interview on a National Public Radio affiliate, Boston’s WBUR. “Do you go to college to benefit yourself? And, in fact, a bachelor’s degree-holder makes $1 million over the course of his career more than someone who only has a high school diploma.

“Or do ... we have a higher education system and support it as taxpayers for the benefit of society because the more smart people we produce, the more we benefit the broader economy?”

Promises, promises

Advocates of Oklahoma’s Promise are breathing a sigh of relief that a state bill that would have limited the program appears dead this legislative session. Margie Terronez, an Oklahoma’s Promise recipient, credits it with enabling her to graduate next month from the University of Oklahoma.

Formerly known as Oklahoma Higher Learning Access Program (OHLAP), Oklahoma’s Promise enables eligible students to receive full tuition to any of the state’s public universities or colleges or partial tuition to private establishments.

Terronez applied for Oklahoma’s Promise after her father died when she was 15. The program is for children of families who earn $50,000 or less at the time the student applies. Provided the student fulfills academic and good-citizenship requirements and that the family’s income doesn’t exceed $100,000 by the student’s senior year, tuition is paid in full.

On March 4, the state House approved a measure that would have lowered that second income check from $100,000 to $60,000. House Bill 1721, authored by Rep. Leslie Osborn, R-Mustang, was not assigned to a Senate committee, effectively preventing it from advancing in that chamber.

When Terronez tosses her cap in May, she will be 100 percent debt-free.

“I know I had to go through a lot to get to the point where I was even allowed to have OHLAP, but I am just blessed to have had that opportunity,” she said. “Without that, I do not know I could say I would be where I am now.” —Rachael Cervenka

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