Proponents say the student debt collection methods in Ohio are a “student barrier”

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By Susan Tebben

The debt owed to the state of Ohio through defaulted payments like student loans is nearly twelve times the amount the state invests in higher education over a two-year budget cycle.

That $ 63 billion, confirmed by the state’s debt collection agency – the Ohio Attorney General’s office – includes things other than student loan debt that has been collected by more than 1,600 public institutions such as courts and municipalities.

However, an inventory of university loan accounts shows that more than 363,000 non-state loan accounts (the accounts that the AG office maintains when a loan is not paid out) are open in the state. When combined with federal loans, the loans to public university students total $ 745.8 million.

Ohio law requires state colleges to recover their outstanding debt 45 days of the amount due or within 10 days of the start of the next academic session, whichever is later, according to the Ohio Department of Higher to the AG office Confiscation certifies education.

As of fiscal 2020, certified debt in the AG’s office was $ 48 million (excluding interest owed) compared to $ 62 million in the previous year.

Collecting this debt ultimately depends on the Attorney General’s office, but it is said that $ 63 billion is too much for an agency to solve.

“Because of the sheer size of the Ohio debt … and the number of debtors it has, the attorney general is employing debt collection agencies and third-party law firms to get the money back,” said a spokesman for the office.

Source: HCM strategists

A “barrier for students”

It is the third-party compound interest along with the certification process itself that critics say is deterring students, especially low-income groups and minorities, from reaping the rewards of their education rather than drowning in debt.

A study conducted last year by the Policy Matters Ohio think tank found that the debt, combined with varying late fees and fines from each school itself and a commission rate of 10%, saddled students with even more repayments along with the possible punishment for denial and transcription Registration bans.

“These guidelines can put an end to the educational endeavors of students permanently and include them in a cycle of low-wage jobs,” the study says. “Individuals themselves clearly suffer, but so do the economies of Ohio communities and the state as a whole.”

Ohio is one of only five states in the country that pass institutional debt to the AG’s office. This is based on data carried out by the consulting firm HCM Strategists.

While Ohio law says the AG’s office can extend the payment deadline for overdue fees by agreeing to a payment schedule, the state agency can also “add fees to cover the cost of processing checks or other drafts of instruments used for inadequate Funds have been returned and the cost of providing electronic payment options to be reimbursed above the 10% commission fee and other fees related to attempting to legally recover the debt.

If the debt is not paid and no action is taken to cancel the claim, the claim may be on the books up to 40 years.

A student loan advisory group, put together by Mike DeWine, now Ohio Governor, and headed through the AG’s office in 2017 (during what was then AG DeWine’s tenure) criticized the agency’s own debt certification process because colleges and universities ” certify their outstanding debts according to different guidelines and practices. “

“To ensure that all Ohio students are treated fairly and uniformly, the members of the Student Loan Debt Advisory Group believe that colleges and universities should have uniform certification practices that emphasize transparency for both the debtor and the AGO.” the group explained in the report.

It appears that these policy recommendations have not been implemented as a 2019 Annual Report by the Ohio Department of Higher Education on Affordability and Efficiency again recommended improving the practice, citing the recommendations of the Advisory Group.

Costs of higher education

While some public colleges and universities introduce a “Tuition Fee Guarantee” for incoming students, which allows students to pay a fixed amount during the four years they attend the institution, the cost of college is in the state further increased overall.

The average tuition and mandatory fees for the main university campuses in the state for fiscal year 2021 is $ 10,076 per year. This comes from a summary of the costs provided by the university Ohio Department of Higher Education. That average is a 1.3% increase from fiscal 2020 when the average was $ 9,950 per year, which is a slight jump from $ 9,817 per year last year, according to state data.

For fiscal year 2021, the main campus tuition and fees are at Miami University ($ 14,839), followed by Bowling Green State University ($ 11,179), the University of Cincinnati ($ 11,000), and Ohio University ($ 10,810) ).

Community colleges in the state averaged $ 5,023 in tuition and fees in fiscal 2021, up 1.9% year over year. Owens State Community College achieved its highest annual tuition fee of $ 6,224, an increase of 2.3% over 2020.

Eastern Gateway Community College was the second highest year of tuition fees at $ 5,610, followed by Northwest State Community College ($ 5,575), Stark State College of Technology ($ 5,458), and James A. Rhodes State College ($ 5,412).

Withholding tax

Proponents who fight against student debt collection methods say changes need to be made to school-level penalties as well, including withholding a transcript for unpaid debt. If a testimony is withheld, students will not be able to enroll in class until the debt is cleared, and those sent to the AG office will be even harder to untangle.

“The importance of access to credentials cannot be emphasized enough as it effectively halts plans by individuals to continue their education, as does access to higher-paying jobs that may require official credentials,” stated Policy Matters in their study of student debt.

The subject surfaced in discussions about the biennial state budget due to be approved by Ohio lawmakers this summer. Department of Higher Education Chancellor Randy Gardner took his time testimony before the subcommittee is currently reviewing the state’s operating budget to discuss transcripts specifically.

“This is not an issue without at least some room for debate, discussion and perhaps some controversy,” Gardner said.

The proposed budget, Gardner said, mandates the Chancellor to establish a policy regarding withholding certificates in colleges and universities. He said that almost every state in the nation “offers at least leverage for debt to campus”.

Gardner said he doesn’t believe in a one-sided approach to higher education and that the state system is better when it relies on boards of trustees and administrators from every campus.

The state higher education authority began speaking to educational leaders about withholding transcripts last week, the Chancellor said, “to see how we can encourage re-entry.” He said with hundreds of thousands of Ohioans subject to collection, transcripts will be a “real key issue” as the budget moves forward.

“I think we need to find a way to reduce these numbers and find ways to alleviate this debt,” Gardner said. “But also to respect that the debt is still owed to an institution and that I don’t believe that the state government should tell an institution that it should waive a debt owed to that institution.”

Changes to the process

The 2019 report by the State Department of Higher Ed’s Efficiency Advisory Board states that college and university financial literacy courses should be commonplace not only for students but also for parents with a summer orientation, with “the differences between scholarships and Student loans are highlighted “.

In the same year as the state report, the Department of Education issued guidance requiring that financial assistance be identified by the type of assistance given.

“The guidelines call for not referring to loans as ‘awards’, including the total cost of attending letters, dividing costs into clear components, avoiding confusion between scholarships, grants, loans and work studies, and always calculating the net cost in financial aid letters, ”reads the guidelines of the state higher education authority.

One of the recommendations of the Policy Matters study was to increase the state share of teaching in colleges and universities – the largest state aid to higher education – and to increase the Ohio College Opportunity Grant (OCOG) program. DeWine’s budget proposal, currently under scrutiny by Ohio lawmakers, provides for increases in both areas.

Student loan forgiveness does not seem to be in sight at the federal level, however. Last week said President Joe Biden he wouldn’t cancel Student loans of $ 50,000 instead of $ 10,000 in forgiveness granted through action by Congress rather than an executive order.

Student loan payments for federal loans were suspended However, due to the pandemic that began almost a year ago, it is unclear whether the extension will be extended after the current September 30 deadline.

This article was republished with permission from the Ohio Capital Journal. For more Ohio political news, see www.ohiocapitaljournal.com.

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