Loan defaults reflect badly on colleges, students

An editorial from The Exponent Telegram 

CLARKSBURG, W.Va. — It’s disappointing that West Virginia once again ranks high in a category that we should want to avoid. It’s even worse since the poor ranking stems from practices that will be far more damaging long term to those affected, as well as the Mountain State.

State residents rank second in terms of defaulting on student loans, which as economists point out, hinders not only their ability to prosper in the future but affects the overall economic opportunities of the state.

In 2012-13, the most recent year data is available, 16.2 percent of state students with loans were in default, meaning that they have failed to make payments in a 360-day period.

While that percentage is actually about 2 percent lower than the previous year, it’s still alarming and poses significant problems for those directly affected, as well as those who depend on them for support.

Brian Lego, an assistant research professor with West Virginia University’s Bureau of Business and Economic Research, said the default rate is symptomatic of the issues facing West Virginia.

“I think it largely reflects the economic climate here in the state and just a matter of job opportunities for people once they’re coming out of college,” Lego said.

“West Virginia has consistently had issues of holding onto people in the younger age groups. In this case, people who are graduating from college might have difficulty finding a job.”

It would be easy to lay blame on any number of elements in the equation.

Some would like to just blame the students, and, granted, they have a share of the blame. After all, they are responsible for the debt.

But other factors play significant roles in the overall college financing landscape.

College tuition continues to rise while financial aid lags behind. That forces more students to consider loans as an alternative.

Some students who try to offset higher costs by working are stymied in that effort by a lack of jobs that pay well enough to make a difference. That leads them to fall back to borrowing money instead.

Far too many West Virginia students fail to graduate college, leaving them not only saddled with debt but without the tools necessary to land a more lucrative career.

And even those fortunate enough to graduate struggle to find jobs in a weak economy burdened by overregulation and poor planning.

That leaves students facing years of payments while underemployed or the aspects of having damaged credit haunt them throughout much of their early adult lives when they fail to pay.

While state officials are quick to point out that they’ve stepped up efforts to educate students on the perils of borrowing too much at such a young point in their lives, we believe more needs done to assist students without forcing them into the dangerous game of borrowing for the future.

College loans should only be the last choice available, with state higher education officials working diligently to reduce costs and increase aid opportunities.

Likewise, public education officials must do more to provide information to high school students about career opportunities that don’t require a four-year degree.

We believe far too often that some of those in default probably shouldn’t have been steered toward college and likely could have found good-paying careers after community or technical college training.

The bottom line is far too many state college students are left in a position of a bleak financial future because of the debt they’ve assumed while trying to paint a bright one. And that ultimately affects all of us through the fallout.

Somewhere the system has failed. And it doesn’t take a college degree to figure that out.

See more from The Exponent Telegram. 

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