Atlanta native Jason Butler graduated with a marketing degree from Savannah State University in May 2008 with dreams of returning to his hometown and getting a good job.
The job search was difficult because of the worldwide economic crisis that became known as the Great Recession. Nonetheless that November, Butler’s first student loan payment was due, about $100, he recalled.
Like many college graduates then and now, when money is tight, Butler deferred some loan payments. In some instances, he made partial payments. The stopgap measures were temporary solutions. Butler, who said he was “lost” professionally at the time, borrowed an additional $12,000 in 2011 to attend Clayton State University, which he says was a mistake. He dropped out before completing that degree program.
Butler, 37, now an academic adviser at Georgia State University, has paid about $37,000 in student loans, but said he still owes about $51,000 on his $72,000 loan debt. Some federal lawmakers are pushing a plan that could conceivably erase his debt.
The student loan debt for Americans is a combined $1.6 trillion, more than the nation’s total auto loan debt. Georgia borrowers account for $66 billion of that. That’s a problem, more lawmakers and others say, because it can keep these borrowers from doing things like owning a home. As the student loan debt amounts have grown, so has the discussion for helping borrowers pay off their debts and even erase them altogether.
Some U.S. senators, including Georgia’s Jon Ossoff, are urging President Joe Biden to cancel up to $50,000 per borrower. Biden has proposed canceling $10,000 in debt for borrowers. Federal officials have suspended loan payments on government student loans and collections on defaulted loans through September because of the coronavirus pandemic.
Critics say the loan forgiveness proposals are too expensive and that it’s unfair to cancel current borrowers’ loans when others had to pay off their debts. They say loan forgiveness mainly helps wealthy people, and forgiving the debts would mean millions of American taxpayers with no loan debt or who never went to college would be subsidizing the debts.
Butler, who’s paying $470 a month on his loans, said of course he’d support eliminating $50,000 in debt. Butler’s sharing money-saving tips on a website he created in 2013. He believes students must be better educated as early as ninth grade about loans, saying he knew little about how loan interest can accrue. Perhaps, he said, the government should regulate tuition.
“College is getting a lot more expensive, but people can’t pay for it, so something has to be done,” Butler said.
As federal lawmakers consider their next steps, several Georgia lawmakers have pitched bills in recent weeks that may improve college affordability and reduce student debt. The bills are aimed at addressing longstanding complaints about student debt in the state, such as the lack of a needs-based aid program for students who may need small amounts like $1,000 or so to pay tuition even after receiving scholarships and grants.
Georgia’s standing
Statistics show student loan debt is a significant problem in Georgia. More Georgians have been taking college courses in recent years, and a larger percentage of them come from lower-income households.
Pell grants, federal aid for low-income students, are paying for a smaller percentage of college tuition than they did decades ago, research shows. About half of students at some of the larger public universities in Georgia are taking federal loans. The percentages are higher at schools with more low-income students, such as Georgia’s historically Black colleges and universities. Borrowing has increased at higher rates in recent years at online-only and for-profit colleges, research shows.
About 1.6 million Georgians have student loan debt (eighth nationally), owing nearly $66 billion (fifth nationally), according to the most recent federal data. The totals include borrowers who moved to Georgia after completing college.
The average federal and private student loan debt of Georgians is nearly $40,000, behind only Washington, D.C., and Maryland, according to a December analysis by Student Loan Hero, a company that helps borrowers manage and eliminate debt.
More than 150,000 Georgians owe more than $100,000, and more than 60,000 borrowers in Georgia are 62 or older, federal data shows. Default rates are more than 10% at more than a dozen Georgia colleges and universities, primarily for-profit and online schools. Federal statistics show more than half of borrowers at many Georgia colleges are not making progress on payments or temporarily stopped or deferred payments.
In the University System of Georgia, which educates the majority of college students in the state, 44% of their students last school year borrowed to help pay for college, 1 percentage point higher than a decade ago. The average debt was $6,177, nearly $1,000 more than a decade ago. The increase, USG officials say, is about $400, once adjusted for inflation.
USG officials say they’ve tried to keep college costs low, noting tuition and fees at its four-year universities are less than most states, some research shows. The officials also point to some ongoing efforts to keep student costs low, such as encouraging students to take at least 15 credit hours a semester in order to graduate sooner and not take out loans to continue their education; offering free online textbooks and study materials, which they say has saved students about $82.5 million since 2014; and its “Know More, Borrow Less” initiative, an online tool that provides information about potentially less expensive loan options.
Georgia’s merit-based HOPE and Zell Miller scholarship programs have also helped, college leaders say. Over the past 15 years, USG officials say about 54% of students receiving those scholarships graduated debt free.
Proposed changes
Some state lawmakers have additional ideas to improve affordability.
House Bill 259, for example, would provide a scholarship or grant based on financial need for academically eligible students with household incomes less than $75,000. House Bill 89 would expand access to the full tuition Zell Miller Scholarship to students who missed the academic qualifications in high school, but have a 3.3 or better cumulative grade-point average during two consecutive periods in college.
State Rep. Stacey Evans, D-Atlanta, the lead author of House Bill 89 and two related bills, said the bills and other changes could result in more college graduates prepared to join Georgia’s workforce.
“If we could put a little bit of effort on each of these, we would see a huge investment,” said Evans, an attorney who took out loans for her education and currently owes about $35,000.
The bills, though, have been sponsored by Democrats, and may have a tough time getting passed in the Republican-led Legislature.
State funding to the University System of Georgia declined significantly after the recession, by as much as nearly $500 million in one fiscal year from the year before the recession. During those lean years, tuition at the University of Georgia and Georgia Tech jumped by more than 65% from 2008 to 2013. Although state funding has increased in recent years, it now covers a smaller portion of college costs and tuition fills a greater share.
Jennifer Lee, higher education policy analyst for the nonprofit Georgia Budget & Policy Institute, said the recession increased the urgency to address debt and college affordability. Lee, who is working with Evans on some of her legislation, said more must be done for low-income students, citing research that shows upper-income students are more likely to get Zell Miller Scholarships.
Lee suggests making the state’s Student Access Loans program — which gave low-interest loans that were on average $5,400 last fiscal year to about 5,500 students — a grant program. She suggested it could be similar to Georgia State University’s retention program, which gives about $900 per student to finish paying their tuition.
The Georgia State way
Credit: Christina Matacotta
Credit: Christina Matacotta
At Georgia State, which has the largest enrollment of any university in the state, officials say 86% of students who receive retention grants graduate.
Tim Renick, the university’s vice president for student success, said one issue that results in students borrowing to pay for college is many take the wrong courses and must stay an extra semester or more to make up for those mistakes. Georgia State in recent years has tried to correct that problem by monitoring course selection more closely. The university has cut the average student tenure by two-thirds of a semester through such measures, Renick said.
If students have to take out a loan, Renick and other college leaders are encouraging them to do so through programs that tie payments to their future income. Several other Georgia schools, such as Brenau University, Clark Atlanta University and Morehouse College, have or are preparing to offer such loan programs.
Renick and others scoff at assertions that many borrowers aren’t hard workers. More than 80% of their students have jobs, many full-time, he said.
“It’s much more difficult today for the type of students that a place like Georgia State enrolls to be able to keep everything going that they need to, to both complete their studies on time, to graduate on time, to support their families, pay back a debt that they might owe,” Renick said.
Some are like Gwinnett Technical College student Kathryn Mulvaney. She dropped out of high school at the age of 16 to work. Her dad died when she was 11, putting the family in poverty. Mulvaney earned her GED in 2017 and is in the college’s business management program.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Mulvaney, now 36, received a state-funded grant (she said her grade-point average is a 4.0) but still needed to borrow money to pay for books and other fees. Her student loan debt is currently about $5,600.
Mulvaney recently spoke at a state hearing in support of Evans’ legislation about the difficulty many technical college students have, particularly working adults with families, to pursue their degrees because of various financial eligibility restrictions they face getting grants and scholarships.
“I can’t imagine how many students have to stop, how many students are dedicated and have to stop their program because there’s no more funding,” she told state lawmakers.
Mulvaney, who has a job on campus, is scheduled to graduate this year. She wants to pursue a bachelor’s degree, but is concerned about having to borrow more money to continue her education.
“It’s not easy. I worry about all of this,” she said.
Staff writer James Salzer contributed to this article.
The federal plans
Here are some details about various student loan debt relief plans:
President Joe Biden has proposed canceling $10,000 of debt per borrower. He also wants to make tuition free for students attending state colleges and universities with household incomes less than $125,000 and students attending community colleges.
Senate Majority Leader Chuck Schumer, D-N.Y., and some Democrats propose canceling up to $50,000 in federal student debt and pausing student loan payments and interest accumulation for federal student loan borrowers for the entire duration of the COVID-19 pandemic.
Republicans have proposed plans, such as a cap on a student’s monthly payment of 12.5% of his or her monthly discretionary income. Other ideas include eliminating an undergraduate student’s remaining loan balance if the student successfully repays 180 months of debt on an income-driven plan.
How we got the story
The Atlanta Journal-Constitution reviewed the most recent U.S. Department of Education data and numbers detailing student loan debt and default rates in Georgia and the rest of the country. The newspaper also received data and reviewed other information from the University System of Georgia on student loan debt, its budget and tuition. Additionally, the AJC looked at research by several local and national organizations on student loan debt.
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