Sen. Kay Floyd, D-Oklahoma City, recalls the photo of a friend’s son smiling in his new residence at Ada’s East Central University in August.

click to enlarge Our universities are still some of the cheapest in nation, but costs continue to rise
Mark Hancock
Dr. Jeanie Webb, President of Rose State College, chats with a group of students out on the campus, 9-24-15.

Sen. Kay Floyd, D-Oklahoma City, recalls the photo of a friend’s son smiling in his new residence at Ada’s East Central University in August.

The image marked the young man’s start seeking higher education; however, it also initiated a financial journey estimated to cost $7,364 in tuition for a single year.

“I can absolutely guarantee the last thing on this young man’s mind was student loan debt,” said Floyd. “I can also guarantee it was not the last thing on his parents’ mind. He is not their first child. Their first child graduated from college in May, and she finished with student loan debt. These parents, like thousands of Oklahoma parents, are thinking and worrying about the cost of their child’s education every single day.”

Despite Oklahoma colleges and universities consistently earning high marks for affordability, after the start of the 2008 recession, many college students began turning to student loans to pay for college. According to the Institute for College Access & Success, 53 percent of all graduates of four-year Oklahoma colleges and universities (public and private) took out loans. That percentage could get higher.

In June, the Oklahoma State Regents for Higher Education authorized an average 4.8 percent tuition hike for Oklahoma’s 25 public college and universities for the current academic year. The state’s $611 million budget shortfall ate into state higher education funding and resulted in the tuition increase. Recent reports suggest next year’s deficit could balloon to $1 billion.

The state regent’s priority is to keep tuition affordable.

“In stark contrast to double-digit increases in many other states, tuition increases at our public colleges and universities have averaged only 4.5 percent since 2009,” said Chancellor Glen D. Johnson in an email to Oklahoma Gazette. “The National Center for Education Statistics reports that the average student cost at a four-year public institution in Oklahoma is the third lowest in the nation. The U.S. Chamber of Commerce Foundation ranks Oklahoma’s state system of higher education as the fifth most affordable system in the nation.”

Oklahoma’s student debt situation also differs significantly from most other states and is a much better story, said Johnson. Oklahoma has the fifth lowest student loan debt level in the nation. Loan debt for students at public colleges and universities is 33 percent below the national average, and nearly half of all Oklahoma students leave college with no loan debt.

Student perspective

That wouldn’t be the case for an Oklahoma law student. Russell selected an Oklahoma law school to minimize his debt load. Russell estimates incurring about $90,000 in his time at law school. In contrast to other three-year law programs, he is saving money, as some Midwestern law schools cost upwards of $200,000.

Russell enters law school with prior student loan debt, despite working full-time or near full-time in college.

“I didn’t come from a family that was fiscally privileged,” said Russell, who lived with family to save money and requested that his full name not be used in this article. “I had to either pay my way or borrow. I designed a budget, and I am sticking to it. I will still come out with quite a bit of student loan debt. It is a fair trade-off. I don’t mind paying it back. I don’t have a family, so I can focus my first few years of law school working to pay back what I’ve borrowed.”

If there is a bright spot to racking up nearly $100,000 in student loan debt, it is student loan forgiveness programs. As an attorney for a federal agency, the government could pay part of the loan, which is an option Russell is considering.

Debt crisis

Nationally, outstanding student loan debt is around $1.3 trillion, surpassing credit card and auto loan debt totals. Student debt rises at a rate of about $2,853.88 per second, according to FinAid, a financial aid website.

Such soaring statistics do not surprise finance professor Dr. Randall Ice, who studied loans and personal finance for 30 years.

Student loans are “easy to get,” advancing students with far in excess of what they need to pay tuition. The extra money is intended to go towards living expenses, but not necessarily spring break trips, a vehicle or a new wardrobe. Those are foolish mistakes made by college students, said Ice, who is a professor at the University of Central Oklahoma (UCO).

“You can’t imagine how hard it is to make those payments on top of everything else,” said Ice, who notes recent grads with student loan debt struggle to finance a home or start a business.

Ice believes some student loan debt is avoidable. He advises potential students to do their homework before attending for-profit universities, which include many online and technical schools. Often, for-profit institutions are unaccredited and, therefore, class credit doesn’t transfer to public or private colleges or universities, a problem that arises at UCO as well.

“They come to us with credits from an online program, not accredited and with no academic credibility,” said Ice. “They are $10,000 in debt, and they have nothing to show for it. It is no wonder they default on their loan.”

A staggering rise in for-profit college enrollment is linked to spike in student loan debt, along with rising instances of defaults. Based on the recently released Brookings Papers on Economic Activity, borrowers at for-profit institutions and community colleges represented half of all federal loans borrowers leaving school and starting to repay their loans in 2011. That group also accounted for 70 percent of defaults.

National conversation

Student loan debt has captured the attention of Washington and those contending for the White House.

Earlier this year, President Barack Obama unveiled America’s College Promise, a plan to make the first two years of community college tuition-free for students, as long as they carry a 2.5 grade point average.

In August, Democratic candidate Hillary Clinton introduced her plan for tuition-free community colleges. Clinton also intends to lower tuition for public colleges and universities and allow debtors to refinance student loan debt.

Other Democratic candidates, former Maryland Governor Martin O’Malley and Vermont Sen. Bernie Sanders, support reforming college costs. Sanders promises free tuition at all public colleges and universities under his College for All Act.

On the Republican side, Jeb Bush and Sen. Marco Rubio voice concerns over the high cost of education. Rubio, of Florida, proposed the Student Right to Know Before You Go Act, which would require universities to give critical cost information, including expected salaries, to potential students. Bush echoes a call for tuition-free community college but hasn’t addressed the notion in his platform.

Tuition-free community colleges would strip away the financial burden many experience when looking at college. For Obama’s plan to become law, it would take an act by the GOP-controlled Congress, which is unlikely. Rose State College President Dr. Jeanie Webb is wary of the Obama plan because states are required to foot 25 percent of the bill, with the federal government picking up the other 75. She stresses that existing programs help students pay for their education but supports expanding higher education to more potential students.

“We want college accessible, and we want it affordable,” said Webb. “A college degree is the best path for a job with decent pay.”

Obama’s plan isn’t the only one requiring a financial commitment by states. Clinton’s New College Compact calls for a similar partnership. Sen. Floyd is a supporter of Clinton’s plan.

“If we relieve the burden of student debt, families will be able to send their children to college,” said Floyd. “Graduates will be able to start businesses without being held back by loans.”

Financial aid

While federal reform efforts continue, state higher education leaders caution that parents and prospective students should start planning early. It is never too early to check out scholarship opportunities, Pell grants, programs and tuition costs.

Parents can visit the state regent’s website for information and tips on programs such as the Free Application for Federal Student Aid (FAFSA), Oklahoma Promise (OHLAP) and Oklahoma College Assistance Program (OCAP).

“The state regents, our public colleges and universities have long recognized the critical importance of family financial aid planning and debt management education,” Johnson said. “Helping students and their parents navigate the financial aid process is a key initiative of our Oklahoma College Assistance Program, which provides extensive educational services and materials.”

At Rose State College, more than 70 percent of students receive financial assistance. The tuition relief comes from scholarships, financial aid or Ticket to Rose, a tuition assistance program for graduates of Carl Albert, Choctaw, Del City, Midwest City and Star Spencer school districts.

Webb contends that financial aid for students could increase. She encounters many parents and students who don’t know the tuition assistance options or the application deadlines.

“The parents don’t know where to start, where to go to look for scholarships and apply for financial aid,” Webb said. “We’ve got to do a better job letting parents know those are available and helping students. If they don’t apply, it is because they don’t know.”

Staggering statistics warrant reform, but wise borrowing, after pursuing available tuition assistance programs, would help ensure that Oklahoma students continue to invest in their future.

Print Headline: College costs, Oklahoma’s universities are still some of the least expensive in the nation, but the cost continues to increase for students and parents.

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