The Price of a College Degree
Not all states are created equal when it comes to the value of a college degree and the burden of student loan debt. According to a report published by WalletHub in 2017 that looked at 10 factors related to student loan debt as well as grant and work opportunities, Ohio ranks first in the nation when it comes to the burden of student loan debt.
Ohio scored 64.25 out of 100. In comparison, Pennsylvania scored 60.05 (rank 3), Michigan scored 60.02 (rank 7) and Indiana scored 56.73 (rank 10). The heaviest weighted factors included average student debt, the proportion of student debt as share of income, and the share of student borrowers who are 50 and older. The calculation also factored in grants and student work opportunities including unemployment rates of those age 25 to 34, availability of student jobs and availability of paid internships.
This is alarming – but not surprising. According to a study by Vanderbilt University and the University of Pennsylvania, Ohio ranks 45th in the nation on key affordability metrics. According to The Institute for College Access and Success, 64 percent of graduates in the class of 2016 borrowed to pay for their undergraduate degree. Those graduates that borrowed, on average, took out $30,391 in loans to afford a four-year degree. This ranks Ohio 14th in the nation in average student-loan debt load and 9th in the nation in the percent with debt.
College costs in Ohio are higher than national averages. For many years, Ohio’s public institutions compensated for low state support by increasing tuition. From 1996 to 2006, tuition at Ohio’s public universities rose an average of nine percent a year. Now, due to state passed tuition freezes, these increases have moderated. Tuition at four-year institutions in Ohio is now seven percent higher the national average while tuition at two-year institution in Ohio is four percent higher than the national average.
Is it worth it? This may lead students and families to ask: is the debt worth the degree? The short answer is yes. Individuals with an associate degree earn on average $250,000 more over their lifetime than those with just a high school diploma while individuals with a bachelor’s degree earn $660,000 more over their life time than those with just a high school diploma. Further, individual with college degrees also see greater health benefits, are more likely to be civically engaged and less likely to be unemployed.
A more pressing concern is relates to students who started school and took out debt but didn’t earn a degree – which is approximately one in four Ohioans. These individuals can find themselves unable to benefit from the financial gains associated with a college degree and in a very precarious financial position. They may also find themselves dealing with state-hired debt collector.
This is one of the many reasons that it’s important to get good guidance when choosing a postsecondary program. If you are trying to identify program is the right fit for you, call the College Now Resource Center to schedule an appointment for a one on one consultation.
Do you have concerns related to college cost or facing challenges paying off your student loans? We want to hear your story. Complete this form and tell us your story.
Spring 2018 Updates to the Public Student Loan Forgiveness Program
The year 2017 was a milestone year for the Federal Public Student Loan Forgiveness (PSLF) program: the first students who signed up for the federal student loan repayment option were eligible to have their loans discharged.
PSLF is a loan repayment option that aims to reduce the burden of student loan debt for individuals who work in public service. The PSLF program was included in the College Cost Reduction and Access Act of 2007, a piece of federal legislation signed into law by President George W. Bush that increased the Pell Grant, created income-based loan repayment options and cut interest rates on federal student loans.
The repayment option is rooted in the theory that individuals may avoid lower-paying public service jobs and instead choose more lucrative private sector opportunities to pay off their student loans. To incentivize students to choose public sector jobs (police, social work, legal aid, etc.), PSLF provides favorable terms: after 120 on-time monthly student loan payments, qualified employees are able to discharge their remaining debt.
Unfortunately, of the 7,500 students who believed they had qualified to have their debt discharged as of January 2018, only 1,000 actually qualified. This is partially because, according to the U.S. Department of Education, there were a “limited availability of income-based repayment plans in the early years of the program.” It is also because of the complexity of the program. Many students have filed complaints that they were given misinformation from their loan servicers, while others faced program technicalities that disqualified some of their payments.
To address this, U.S. Senator Elizabeth Warren (D-MA) introduced an amendment that was included in the FY18 federal spending bill that would expand the PSLF program to those who qualify for loan repayment but were somehow placed in the wrong federal repayment program.
To see if you qualify for payment from the $350 million fund, individuals must apply for consideration through the U.S. Department of Education. To learn more, visit the U.S. Department of Education’s website and call the College Now Resource Center to schedule an appointment for a one-on-one consultation. There are staff on-hand to help you navigate this process.
Want to learn more about qualifying for Public Student Loan Forgiveness?
This blog post is also published on the Higher Education Compact of Greater Cleveland’s blog.
Meet College Now and Harvard Alumni Tonisha Calbert and Kimberly Vargas
Many students dream of attending a prestigious institution such as Harvard University. However, in the late 1990s and early 2000s, Tonisha Calbert and Kimberly Vargas became the first two students from the Cleveland Metropolitan School District to attend Harvard since 1989 – and both women are College Now (formerly the Cleveland Scholarship Program) alumni, as well! Read on to learn how College Now helped these two attend their dream school.
Growing up in East Cleveland with her mother and five younger siblings, Tonisha tended to excel in school. She was vice president of her class, a member of the National Honor Society, and a producer and reader of the homeroom announcement broadcasts at Jane Addams High School. However, when it came time to think about college, Tonisha did not have the money to even apply.
“The fee [to apply] was only $60,” she said. “[College Now] paid it as well as the fees for the other schools I applied to.”
With a personal essay focusing on overcoming her shyness attached, Tonisha’s application was sent off, impressing admissions officials at Harvard and resulting in her acceptance to the school and a sizeable financial aid package. However, there was still a gap Tonisha had to meet. With College Now’s help, Tonisha earned $18,000 in additional scholarships, and was able to attend Harvard in the fall of 1998. After graduating in 2002 with her BA in government with a focus on ancient political philosophy, Tonisha went on to Columbia University’s law school, earning her JD in 2007. She worked as a corporate associate for Willkie Farr & Gallagher in New York City before returning to Ohio to earn her MA from Ohio State University in 2013. Currently, Tonisha is a PhD candidate in the Department of English at Ohio State.
Similar to Tonisha, Kimberly Vargas excelled in school while her family struggled to make ends meet with welfare and food stamps. On track to graduate as salutatorian from James Ford Rhodes High School, Kimberly’s guidance counselor pushed her to apply to Harvard. With the help of College Now, Kimberly was able to pay for the pricey entrance exams and application fees required to submit a competitive application. Even after she got her acceptance letter, however, Kimberly still viewed attending Harvard as an impossible dream. With a $40,000 per year price tag, “I just assumed I wasn’t going to Harvard,” she said. Winning a full scholarship, however, changed all that. In 2006, Kimberly graduated from Harvard with a degree in psychology. Realizing that she wanted to return to Cleveland and her family, Kimberly then moved back home where she earned her master’s degree from Cleveland State University and went on to work as a school psychologist for the Cleveland Metropolitan School District.
Since Tonisha and Kimberly, a number of College Now scholars have applied to and attended Harvard University (including David Boone, a 2012 graduate of MC2STEM in the Cleveland Metropolitan School District) and other prestigious schools throughout the country. Through programs such as the Cleveland Foundation College Now Scholars Program, more students are applying to and receiving acceptances to more elite institutions than ever before, which you can read more about here.