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Student loans have become a very controversial topic over the past decade. Many people feel like they will never get out of debt, while others say, “Why not take advantage of the situation?” Weighing these two sides of the argument, I decided to make the decision myself. After analyzing my situation, I realized that student loans were something I had no control over. In order to pay them back, I would need to keep working until retirement age. That was definitely not what I wanted. So, after much thought, I decided that now was the time to start saving to pay off my student loans. Saving money is the best way to build wealth, and I am glad I did. Not only do I feel good about paying off my loans, but I am able to use those funds whenever I want. If I ever decide to pay off my home mortgage, I know exactly where to put it!
Student loans are often held by private banks. However, the federal government runs the Federal Direct Loan Program. These loans are funded by the U.S. Department of Education. There is both public and private option programs. The private lenders are called loan servicers. When you receive a loan, the lender becomes its owner. A servicer then collects payments and makes decisions that affect your account.
The largest federally sponsored program is the Federal Family Education Loan (FFEL). FFEL was created in 1965 to help students defray their cost of education. For many years, it operated under the auspices of the Department of Health, Education, and Welfare (HEW). Today, FFEL is administered by the U.S Department of Education’s office of financial aid.
The interest rate on FFEL is set by law at 6 percent per year, compounded monthly, and capped at 8 percent per year. If rates rise above the cap, you may be eligible for a lower rate based on income. The amount of interest received is subtracted from your loan payment. Payments are automatically deducted from your salary each month. You can choose how long you wish to repay your loan. As a general rule, you should plan to pay off your loan within 10 to 30 years.
Repayment begins six months after graduation or withdrawal, whichever comes first. Your repayment period is fixed, regardless of when you took out the loan. Once you begin repaying, you must continue until you have paid at least half of the original principal plus accumulated interest. The remaining balance will be forgiven after 25 years of continuous service.
If you borrow less than $20,000 and work full-time, you may qualify for a Public Service Loan forgiveness program. To find out if you are eligible, contact your loan servicer.
If you attend college or trade school outside of Ohio, you may be eligible to participate in the Ohio Guaranteed Student Loan program. Visit www.ohiohighered.org/GuaranteedLoanProgram.aspx for details.
Here you will find helpful information about all types of student loans including direct loans.
Student loans can be confusing, and sometimes, they just cause sleepless nights. The best thing we can do is educate ourselves about our finances. Start by reading the list of top 10 tips below.
Do not pay any unsecured debts before your priority debts.
Pay off your credit cards as soon as possible, preferably before the end of the month.
Pay extra toward your student loans each week.
Establish a budget and stick to it.
Save regularly and invest wisely.
Student Loans Ohio
The government provides students with financial aid in order to help pay for their tuition and living expenses while they’re enrolled at college or university. However, even though the federal government may provide financial assistance, some colleges and universities still require student borrowers to take out private student loans to finance their education. These loans generally have higher interest rates than federal student loans.
Borrowers who receive federal student loans should make sure that they understand how their loan payments work. Most borrowers will need to begin repaying their loans after graduating from school, although many borrowers opt to defer repayment until after they find employment. Before taking out any type of loan, borrowers should compare different types of loans to determine which best meets their needs.
Loan forgiveness programs
Many colleges and universities offer borrower forgiveness plans that allow students to get rid of some or all of their unpaid student debt before they graduate. Under these programs, borrowers can eliminate certain amounts of their loan balances each month, depending on the amount of debt being forgiven.
Student Loans Ohio
Student Loan Default Rate Increased 5 Times Since 2007
In 2011, the student loan default rate increased for the first time since 2006, reaching 4.9 percent. In 2012, it jumped again, hitting 6.1 percent. That’s a five-fold increase in just four years.
Average Debt Has Now Surged To $26,000 Per Person (Over Half Of All Students)
The average student loan debt per person soared above $25,000 last year for the first time ever. And while some people may not have much debt, many others now owe over half their lifetime salary, or even the equivalent of two full-time jobs!
More Than 2 Million People Are Paying Off Their Debts While Working
And that means they’re missing out on opportunities to pay down the rest of their debts. Even worse, about half of borrowers who have defaulted say they’ve been unable to find work due to their unpaid loans.
Nationwide, 1 Out of Every 10 Borrowers Is Behind On Payments — But At A Cost
Banks charge late fees of as little as 15 to as high as 35 percent. Which means if you miss just one payment, you could end up paying thousands of dollars in interest charges alone.
If You Don’t Repay Your Debt, You Could Get Fired From Your Job
You’ll lose access to credit cards, car financing and even home ownership. Plus, you may even face legal consequences that affect everything from your ability to get hired to getting approved for a mortgage.
Most Likely To Go Bankrupt? College Grads
College graduates were the worst off, with almost 20% suffering financial hardship because of their student loans. Graduates with master’s degrees fared better than those with bachelor’s degrees.
Almost 50 Percent Will Never Be Able To Fully Repay Their Debt
Overall, 42 million Americans carry student debt, with a third having taken on more than $50,000 in total. And although the government plans to forgive certain types of debt after 25 years of payments, the fact still remains that it can take decades to fully repay these loans.
Student Loans Ohio
How many students go to college?
Ohio ranks first in terms of percentage of population enrolled in post-secondary education (18.3%). According to the National Center for Education Statistics, about 1.8 million people were enrolled in colleges and universities in 2016. Compared to the national average of 13.7%, the state’s rate was much higher. Also, among states reporting comparable data, Ohio ranked third highest in percentage of graduates who obtained bachelor’s degrees (28.9%) and nearly second highest in percentage of graduates obtaining graduate degrees (14.9%).
Which counties have the lowest unemployment rates?
Ohio County had the lowest unemployment rate in 2015 at 4.6%. In 2014, the county’s unemployment rate was 6.4%. In 2013, the county’ s unemployment rate was 7.8%. These figures were reported in the U.S. Bureau of Labor Statistics’ “State Employment and Unemployment – April 2015” report.
What is the median age of residents in Ohio?
In 2014, the median age of residents was 40 years old. Ohio had a total population of 10,836,859 in that year.
What is the difference between a felony and misdemeanor charge?
A felony is punishable by more than one year in prison. A misdemeanor may result in imprisonment of up to six months. However, in some instances, a person charged with a misdemeanor could face probation or community service instead of jail time.
Who were the top five fastest growing cities in the United States in 2015?
The Cleveland metro area ranked number one in terms of population increase among urban clusters, according to a study conducted by the Brookings Institution. Other major metropolitan areas in the Midwest included Detroit, Michigan; Chicago, Illinois; Grand Rapids, Michigan; and Cincinnati, Ohio.
Where did the term “ghetto blaster” come from?
An electric guitar amplifier designed by Jimi Hendrix in 1965. Named after its distinctive sound, it became known as “the ghetto blaster,” an early example of a portable music device intended for play in public places.
What is a “Dorm Room?”
According to Wikipedia, a dorm room is a residential space that provides sleeping accommodations for university students. Dorm rooms tend to be smaller and less luxurious than private homes. Most dorm rooms come equipped with beds and dressers. Students often share bathrooms and showers in their dormitory.
Student Loans Ohio
Statewide Student Loan Debt
According to Statisticbrain.com, Ohio student loan debt tops $7 billion and is the highest amount owed by any state college students at $816 million. Nationally, total student loan debt has surpassed $1 trillion. According to a report by the Institute of Higher Education Policy (IHE), the average student loan borrower in Ohio owes about $37,000 in loans. The cost of higher education has continued to rise over time while the median wage has remained relatively flat. As these two factors combine, student loan debt continues to increase.
High Cost of Living
The Cleveland Plain Dealer recently recognized Columbus Ohio as America’s Best City for Jobs in 2017. However, according to U.S. News & World Report, the area is No. 1 for having one of the highest costs of living in the country. Nationwide, housing costs make up nearly 50 percent of the national budget. In Ohio, the average monthly rent is $902 per month. One of the largest expenses is food, which averages out to be $1028 per month. These costs may seem inconsequential compared to tuition costs, however they add up more quickly than expected.
Low Unemployment Rate
Ohio’s unemployment rate ranks among the lowest in the nation at 4.5 percent, with only six states reporting lower rates. However, this figure does not account for underemployment, meaning workers who have jobs but cannot find full-time employment. The Bureau of Labor Statistics reports that Ohio’s labor force participation rate was 59.0 percent in 2016. This means that roughly 2.4 million people were working, even though they could not find full-time employment opportunities.
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