MONEY TREE: Student Loans Challenging for Okla. Students
OKLAHOMA CITY (AP) — If it hadn’t been for a student loan, John Bobb-Semple would not have gone to college.
But even with his student loans, it wasn’t easy.
Bobb-Semple, who attended Tulsa Community College and the University of Central Oklahoma, said student loans were part of the tools he needed to get his college degree.
“I was one of five children,” he said. “If it wasn’t for student loans, I wouldn’t have been able to go to college. Without them, it would not have been possible.”
But for Bobb-Semple the process of getting those loans, the delays and the frustrations of waiting for them to arrive and the financial problems caused by the float time were not a good part of the college experience.
“I believe student loans are 100 percent worth it,” he said. “But there need to be changes. Students need to understand the loan and the interest, but they also need to be educated about the more consumer aspects of student loans: when they arrive, how the process works, the time frame involved on when they get their money and other issues like that.”
Bobb-Semple, who graduated in 2009, said every semester there was a race to ensure that his funding had arrived, the proper amount was received and that his bills could be paid on time.
“I worked three jobs and had loans to get through school,” he said. “And I could survive when the funds were delayed, but I know many students who really struggled. I remember once that a friend slept on my couch for several weeks until his loans arrived. Then he could pay his rent.”
Bobb-Semple isn’t alone. Across the nation, college students face close to $1 trillion in student loan debt.
According to data from the U.S. Department of Education, there are two main sources for student loans the soon-to-be-extinct Federal Family Education Loan, or FFEL, program and the Federal Direct Loan Program.
At present, the FFEL program has about $390 billion in outstanding loans. That figure includes $77 billion in Stafford loans, $81 billion in unsubsidized Stafford loans, $21 billion in PLUS loans and $211 billion in consolidation loans.
The Federal Direct Loan Program has about $220 billion in loans, including $58 billion in subsidized Stafford loans, $59 billion in unsubsidized Stafford loans, $20 billion in PLUS loans and $83 billion in consolidation loans.
With a subsidized Stafford loan, the government pays the loan’s interest while the student is in college; with unsubsidized loans, the interest accumulates. PLUS loans are those made to parents on behalf of students.
Those numbers have federal and state officials scratching their heads about default rates and the amount of debt, but little has been said about the difficulty in getting loan funds dispersed.
And though federal law allows for the early dispersing of funds, not every school provides the money upfront. In many cases, students are well into their semester before they receive their funds. At some schools, such as the University of Oklahoma, student financial aid is distributed about a week before classes start and students have the choice of receiving a check or having the funds electronically deposited in their bank accounts.
Other schools, such as Oklahoma City Community College, put the funds on a debit card.
“We can disperse Pell Grants, other grants and student loans up to 10 days early,” said Linette McMurtrey, assistant director of financial aid at OCCC. But even then, she said, some students have to wait.
“For first-time borrowers in their first academic year, there’s a 30-day wait,” she said.
McMurtrey said her school is very conscious of the mechanics involved in distributing the funds and the amount of debt students are accumulating.
McMurtrey said some funds, such as Pell Grants, are slower because they are not paid until after the window for dropping classes has passed.
“Pell Grants are paid based on the number of hours enrolled,” she said. “So they aren’t distributed until about two weeks into the semester.”
Still, for students such as Bobb-Semple, those two weeks can be long.
“Delays can make things very difficult,” said Bobb-Semple, who now works as operations manager at the Oklahoma Dental Association. “The process needs to be streamlined. There needs to be a type of clearinghouse and the inaccuracies eliminated. Student loans are needed, but the whole process could stand to be improved.”