As student debt continues to grow, a new study found that about two-thirds of student-loan borrowers in the U.S. “misunderstood” or were “surprised” by aspects of the loaning process.
The study, done by Young Invincibles, a Washington, D.C.-based nonprofit representing the overall interests of 18- to 34-year-olds, surveyed about 6,500 undergraduate and graduate student-loan borrowers who had an average of $76,000 in student debt.
“A lot of people borrow incrementally, and given that they are borrowing every year, it is hard to keep into perspective how much they are going to owe when they are finished with college,” said Healey Whitsett, author of the study and senior analyst at NERA Economic Consulting.
During the 2009–10 academic year, 32,359 Ohio University students across all campuses received a combined 25,000 loans, totaling about $190 million in federal, institutional and private aid, according to a previous Post story.
“It is difficult for people to understand interest, monthly payments, and it’s not something that borrowers fully grasp when they are making these large and important borrowing decisions,” Whitsett said.
Of those surveyed, more than two-thirds of students who took out both private and federal loans did not understand the main differences between the two.
Some OU students, such as Anna Heaton, share those frustrations.
“I honestly don’t understand the loan process at all,” said Heaton, a freshman studying psychology. “My dad did all of it —the FAFSA, everything.”
The study also mentions that 37 million Americans hold student debt, but not all of them are still in school.
“I’m not the least bit surprised by the study, and it’s not the fault of the students, it is the fault of the industry,” said Deborah Thorne, an associate professor of sociology at OU. “I think it’s evident that, based on the fine print, they don’t have any interest of the students at heart.”
Thorne, 50, estimates her debt will not be paid off until 2027. She earned her Ph.D. in 2001 at Washington State University.
Incoming OU freshman Jenna Polen, from Millersburg, Ohio, said she’s intimidated by the idea of borrowing money to pay her college expenses.
“I haven’t done any research about loans,” Polen said. “I really don’t know where to start.”
The information available on loans is often difficult to find and, subsequently, difficult to understand, Whitsett said.
“A lot more needs to be done to distribute information and educate people on how much an impact decisions like these will make on their financial future — and future in general, for that matter,” she said.
bc822010@ohiou.edu
