Report: Ohio's Student-Debt Law Is 'Punitive'

Feb 26, 2020
Originally published on May 22, 2020 7:14 am

Updated: 10:53 a.m., Wednesday, Feb. 26, 2020

An Ohio law requiring colleges to turn over student debt to the state attorney general’s office for collection is disproportionally harming low-income students of color, according to a new report from Policy Matters Ohio, a Cleveland-based nonprofit.

Students can owe their university for things like unpaid tuition, a parking ticket or some other fine. Policy Matters Ohio found that when that debt is turned over to the attorney general’s office for collection, high interest rates and collection fees are added on top of the original debt, which can significantly increase the total amount a student owes.

Policy Matters Ohio researcher Piet van Lier calls it a punitive approach that can derail a person’s education.

“So, you could end up owing thousands of dollars, even if it was only a few hundred dollars initially,” van Lier said. “And you can't get back to school and you cannot re-enroll at those schools.  Even other schools, you need to pick up where you left off. You can't get your official transcript because the schools have a policy...they will not release an official transcript if you owe them money.” 

Ohio schools impacted most, according to the report, are two-year community colleges and Central State University, the state’s only public historically black university.

“And what we know about those students is that they're more likely to be low-income,” van Lier said. “They're more likely to be students of color, part-time students, older students, you know, 25 and older. So, these are students who are going to struggle more. So, it really does have an impact on people who probably need the most help.”

Central State University is one of the most affordable schools in Ohio, said Cynthia Jackson-Hammon, CSU's president, and the school aims to not only stay affordable but also works to make sure graduates are fiscally savvy.

"CSU [Central State University] works throughout our students’ tenure on developing financial literacy and a deep understanding of debt management," Jackson-Hammon said in an email to ideastream. "Consequently our students have become more cognizant of the importance of graduating with little or no debt."

Policy Matters Ohio points to the Ohio Department of Higher Education’s goal that 65 percent of Ohioans have a college degree, certification or other workforce credential by the year 2025. Many policies in Ohio “work against this ambitious goal,” the report said.

Policy Matters Ohio recommends changing state law so rather than turning over debt to the attorney general’s office, universities control their own debt collection and decide whether or not to forgive debt up to a certain point.  

Cleveland State University and Lorain Community College already forgive certain debts in order to allow students to continue with their education, van Lier said.

Attorney General David Yost’s office “operates at the discretion” of the universities when it comes to “how interest and penalties are handled, and whether to forward collection fees to the debtor,” a spokesperson told ideastream via email.

Yost’s office is “actively working with the Ohio Bursar’s Association,” with the goal of having institutions of higher education adopt “uniform standards for fees and penalties and certification practices for all student debt that is to be collected by our office,” according to the email.

 

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