The average student graduates with more than $20,000 in federal student-loan debt.
President Obama recently took a stand to protect students from excess debt by appointing Richard Cordray to head the new Consumer Financial Protection Bureau.
“The CFPB is an oversight organization for the lending industry, and their objective is simply to provide protection to the populace and the average consumer from exploitation from the lending industry,” said Deborah Thorne, an associate professor of sociology at Ohio University.
In December, the Senate blocked Cordray’s confirmation in a 53?45 vote, with 60 votes needed.
“There is opposition of the bureau from people in Congress,” Thorne said. “They want there to be no regulation on the lending industry.”
Ed Mierzwinski, of the federation of state Public Interest Research Groups, released a statement regarding the Senate’s decision.
“The Senate pledged to continue their opposition to a director, any director, until the bureau was first weakened and its independence eliminated,” Mierzwinski said.
Mierzwinski also claimed that, through the bureau, Cordray could lower student debt.
Ray Stephens, the former director of OU’s Ohio Center for Professional Accountancy, said he doesn’t necessarily agree.
“The bureau will not help students with the forgiveness of debt, and it certainly won’t make it easier to avoid debt or anything like that,” Stephens said.
About 80 percent of OU students receive financial aid, according to the Integrated Postsecondary Education Data System for the National Center for Education Statistics. Alie Morrison, a junior studying business, is one such student.
“Taking out loans is very anxiety-inducing, but I know that taking out loans was an investment into my future, and hopefully, I will be able to pay them off,” she said.
Morrison added that she has struggled with credit-card debt in the past and hopes Cordray’s appointment can help prevent students from making the same mistake that she made.
“I maxed out a credit card awhile back and am still paying the price,” she said. “I learned my lesson the hard way but am slowly but surely paying it back.”
Morrison isn’t alone.
“Every year, students graduate owing tens of thousands of dollars before they’ve even earned their first paycheck,” said Rich Williams, higher education advocate for the U.S. PIRG, in Mierzwinski’s statement. “The Consumer Financial Protection Bureau can set rules of the game to rein in the worst abuses in the campus marketplace and ultimately to drive down the cost of college.”
William said hundreds of thousands of students also assume expensive private student loans that pile on even more debt before exhausting more consumer-friendly college financing options.
During the 2010-11 school year, 42,576 federal loans were granted to OU students, totaling $185,033,860. That same year, OU students received 834 private loans totaling $22,394,816.
“I knew by coming to Ohio University that I would definitely have to take out loans, and I would avoid them if I could, but I didn’t really have any other option besides loans,” said Maci Byers, a junior studying community health.
“Loans do cause a lot of stress and worry, and I just hope and pray that I will be able to find a job that will support me and help me pay them off over time.”
bc822010@ohiou.edu
Editor's note: This story has been updated from its original form. It originally mentioned the "learning industry," rather than the "lending industry."
