Ohio Official Sees Mandatory Financial Literacy as Key to Solving Student Debt Crisis
By Jeanne Doran
July 18, 2017
Ohio has had its stumbles on the road to greater financial education in its schools. But Attorney General Mike DeWine is getting religion, seeing it as a way to curb excessive college debt.
In a report last month, DeWine’s advisory group on student debt collection put forth 22 recommendations that included a heavy dose of financial literacy. The group’s first point: All Ohio high school students should receive one semester of financial literacy education.
Ohio ranks eighth nationally with 70% of the state’s college graduates having some student debt. The average balance is $30,000. “This is a national crisis, really,” DeWine says. “We have so many students who are leaving college with enormous debt.”
DeWine is hoping his group’s report will generate greater understanding of college loans—before students sign up. The report alerts students to the pitfalls and potential problems of repayment plans among other things.
The 17-member advisory group, created in September 2016, examined debt-collection practices for unpaid student loans at Ohio’s public colleges and universities. Key recommendations included:
Help students understand their debt obligations before they graduate or withdraw from school.
Start financial education in high school so college-bound student have knowledge before they incur debt.
Alert students to how the collection process works, including possible late fees and the notices they will receive.
Mindful of the difficulties young adults face, the advisory group suggested that colleges and universities offer settlements whenever possible. They also want debtors to be notified in advance of the consequences of non-payment.
Student debt outstanding nationally is about $1.4 trillion. College loans are the second-highest consumer debt category, trailing only mortgage debt, and higher than both credit card and auto loan debt.
DeWine hopes his group’s recommendations will be a step in tackling the problem. He has practical reasons to take an interest: the Attorney General’s office is responsible for collecting monies owed to state colleges and universities.