OM Addressing Student Loans Crisis

More than half of all college students borrow money to go to school.  According to the Chronicle of Higher Education, of the 20 million Americans attending college, 12 million will borrow money to help cover costs.

Although loans help make education possible for many, the National Urban League worries that minority students, in particular, may not know what they’re signing up for.

Sumontro Sinha is a University of Miami graduate with an engineering degree.  As he  works in his parents’ garage, he takes a moment to demonstrate a wind tunnel designed to see how much wind an airplane wing in a glass panel can resist.

Sumontro Sinha gets to work in his parents’ garage. Just another typical Sunday night for the engineering grad.

“We’re roughly 30 miles per hour,” he says as he turns up the intensity with a look of satisfaction.

Sinha, an Oxford native, attended The University of Miami as part of a family tradition – both of his parents received their doctoral degrees there –  but the out-of-state tuition and living costs forced him to take out student loans in order to attend.

Sinha, who graduated in 2012, has now moved back in with his parents to help save money to repay loans.  He commutes daily from Oxford to his job in Huntsville, Ala., where he works with defense contracting.  His dream is to work for NASA, but for now has to go where the money is.

“It shapes every decision that you make. What you do. What you don’t do. What you spend money on. What you don’t. I definitely feel a lot less free because of the loans,” Sinha says.

At times, he wonders if it was all worth it.

“It does make me think twice about whether or not I should have paid all that money to attend that school.”

However, Sinha’s father is quick to remind his son that, despite the loans, his engineering degree can never be taken away from him.   Sinha’s father is the co-signer on his son’s loans and jokes that if his son can’t make his payments, the bank will come after him next.

In fact, according to the Federal Reserve Bank of St. Louis, Mississippi has one of the nation’s highest default rates with 14 percent of those who take out student loans going into delinquency. The average student loan in Mississippi is $25,000.

All students at The University of Mississippi  who take out student loans, and indeed all student borrowers nationwide,  are required to go through online counseling in order to understand the terms, the amount and the repayment plans of their loans.

Student loan brochures in the Ole Miss Office of Financial Aid

Although Ole Miss does not target minority students, in particular, it will begin taking a more active role to educate students about money management starting this summer.  The university will pilot a financial literacy program geared toward students enrolled in EDHE 105 courses. The optional class is available only to freshmen and is designed to teach students the essential tools needed to be successful throughout their college careers.

The Ole Miss Office of Financial Aid office is responsible for creating the course and its implementation. Laura Diven-Brown, director of financial aid at the University of Mississippi, is excited about the project and her staff’s hard work.

“We really want people to be wise coming out of school, knowing how to manage a budget, what they can afford and make some good smart decisions. We are finding that a lot of people are coming to college from high school, and they don’t have some of that background,” Diven-Brown says.

Groups such as the Ole Miss chapter of the national organization MoneyThink have already recognized this problem. Once a week the group works with seniors at Lafayette High School and Oxford High School to teach them about how to handle money and help them understand student loans.

“These are things that college students usually fall into a pitfall for,” MoneyThink mentor Austin Yarber says.

Lafayatte High senior Demetrius Plaxico participates in the program and when he speaks, a confidence can be heard in his voice. Plaxico acknowledges that although  his parents will only be a phone call away when he attends college next year, he wants to be independent.  He feels that the knowledge gained from MoneyThink will help him accomplish just that.

But not everyone is so fortunate.  As Sumontro turns in for night in preparation for the long commute he has to make early in the morning, he reflects on what he wished his university had told him.

“When  you come to that first payment that’s when you really realize … oh crap … this is how much it actually is, and how much I’m actually going to have to pay for that a month,” Sinha says. “If they could remind you every month or week how much they [student loans] cost, you would take more preventive steps to make sure you could make the payment.” –– Bracey Harris and Kyndall Cox, broadcast journalism majors, Meek School of Journalism and New Media

bsharris@go.olemiss.edu

kcox2@go.olemiss.edu