It’s often said that higher education is a pathway to success, both for individuals and the state of Ohio. By 2025, 65 percent of Ohio jobs will require a postsecondary education.1 To fill those jobs and ensure a bright economic future for Ohio, nearly two million more Ohioans need to earn postsecondary credentials—including technical certifications, associates degrees, and higher—within the next eight years.2 Ohio’s public institutions of higher education provide Ohioans with an affordable, convenient way to earn a postsecondary credential, but many Ohioans must still finance their higher education with student loans.3
When used appropriately, student loans provide citizens with access to higher education to pursue their dreams of a productive and rewarding career—access they might not otherwise have. Unfortunately, many students leave college with more debt than they can handle.
Today, 42 million Americans4 owe more than $1.3 trillion in outstanding student loans5. More than half a million of those individuals are in default on their student loans,6 including more than 30,000 Ohioans7.
Ohio ranks among the most debt-burdened states for student loans. According to the Institute for College Access and Success, 66 percent of Ohio graduates leave college with student loan debt, ranking Ohio eighth in the nation for proportion of college graduates with student debt.8 Ohio graduates leave college with an average of $30,239 in student loan debt.
Not only do Ohio graduates have more debt than graduates from most other states, but they also default on their student loans at a higher rate than the national average. In fact, 30,573 Ohioans, or 13.6 percent of borrowers, are in default on their student loans, compared with 11.3 percent nationally.9
Ohio Attorney General Mike DeWine is passionate about educating Ohioans on the benefits and responsibilities of student loans. In January 2016, the Attorney General created the Student Loan Center on the Ohio Attorney General website at www.OhioAttorneyGeneral.gov. The Student Loan Center provides students and parents with everything they need to know before, during, and after college, including picking a career, finding an Ohio college or university, filling out the Free Application for Federal Student Aid (FAFSA), budgeting for college, and repaying student loans. The Ohio Attorney General’s Office has also partnered with the Ohio Association of Student Financial Aid Administrators to provide free financial aid night presentations to Ohio’s high schools. Schools can request a financial aid night presentation through the Attorney General website.
Ohio Attorney General Mike DeWine takes his responsibility to educate Ohioans about student loans very seriously, as the Ohio Attorney General’s Office is charged with collecting state debt, including that of Ohio’s public colleges and universities.
Colleges and universities are initially responsible for collecting their own student loan debt. That debt must then be certified to the Attorney General’s Office for collection, either 45 days after the amount is due or within 10 days after the start of the next academic session, whichever is later10.
Collecting student debt can be a costly process. It involves using skip-tracing methods and other means to try to locate a debtor, mailing collection letters, making calls, sharing documents, verifying loans, communicating with state educational institutions, and, possibly, taking debtors to court. To assist with this process, the Attorney General has authority to hire special counsel11.
To ensure that debt collection and special counsel costs are paid by the debtor and not passed off to other citizens, the Ohio Revised Code permits The Attorney General’s Office to assess and recover costs from the indebted party.12 The Attorney General’s Office and the state’s institutions of higher education regularly work with students to find options to pay their debt, such as the establishment of payment plans.13
In September 2016, Ohio Attorney General Mike DeWine convened the Student Loan Debt Advisory Group. The group was charged with examining:
• The uniformity of university policies, fees, and penalties regarding unpaid student accounts.
• The adequacy of students’ education regarding all responsibilities when taking student loans.
• The university certification process for student debt accounts.
• Student loan debt collection strategies within the Ohio Attorney General’s Office.
The group convened five times over the course of six months. During their meetings, group members heard presentations from the Ohio Attorney General’s Office staff, college and university officials, legislators, special counsel, third-party vendors, and others. Each provided group members with an in-depth look at student loan debt, based on their area of expertise. Advisory group members also surveyed public colleges and universities on their student debt collection policies, including fees, collection costs, and other amounts assessed on outstanding student debt.
Based on the information presented, the 17 members of the Student Loan Debt Advisory Group made 22 recommendations for the Attorney General’s collection practices, college and university policies and certification practices, and student financial literacy education. Those recommendations will be available to view on the Ohio Attorney General website soon. Please visit www.OhioAttorneyGeneral.gov for the latest information on the report.