Norse unable to repay student loan debt

In the Greater Cincinnati area, Northern Kentucky University ranks highest in the level of former students failing to repay federal student loan debt on time, as compared to similar institutions.

According to a recent report released by the U.S. Department of Education, 11.2 percent of NKU students who have taken out federal student loans have entered default on their student loans within the last three years.

Xavier University in Cincinnati had the lowest rate in the area at 2.5 percent. The University of Cincinnati’s default rate is 8.7. Miami University in Oxford, Ohio, has a rate of 8.3 percent.

Despite all these universities being part of the same metropolitan area, NKU President James Votruba said he still attributes part of the reason for the difference in rates to the university’s location.

“We are a typical metropolitan university campus in that students come and go a lot. That’s why our six-year graduation rates are lower than most,” Votruba explained.

Votruba did not talk in many specifics about how we compared locally; instead, he chose to focus on our comparison to public, four-year colleges in the Commonwealth.

The University of Kentucky, University of Louisville and Murray State University all had fewer students failing to pay their loans on time at 4.5, 6.8 and 8.5, respectively. Western Kentucky University in Bowling Green was only slightly higher at 11.7 percent. Eastern Kentucky University in Richmond had a rate of 13.7 percent. Morehead State University’s was 14.9 percent and Kentucky State University in Frankfort fared the worst at 24.8 percent.

Votruba listed a number of factors that could be contributing to the level of default, including NKU’s retention of students. Votruba said those students often lured away by outside employment.

“I think that the profile of our students plays into this. You know, 85 percent of our students work 20 hours a week or more,” Votruba said. “People will ask me who is our greatest competition and often I’ll answer that it’s employers.”

When students leave the university prior to completing their degrees, they are more likely to fall victim to student loan default, according to NKU Director of Student Financial Assistance Leah Stewart.

However, neither Stewart or Votruba were able to provide a breakdown of whether it is NKU graduates or dropouts who are more frequently defaulting.

Votruba and Stewart also considered the types of students NKU has attracted in the past as a potential cause for the high rate as compared to some colleges. Votruba said that UK, U of L and Murray State were all more selective in the kinds of students they admit. Thus, one way to consider reducing the rate of default is to turn away more applicants.

“If that’s the case, our selectivity continues to go up,” Votruba said. “Our student profile has changed dramatically — that will influence these kind of numbers, would be my guess.”

“We will probably turn away a larger number this year,” Votruba added and said that these will be students with two or more deficiencies in the admissions standards for NKU.

One factor that NKU is working on in order to improve default rates is new programs designed to promote financial literacy among incoming students.

“We don’t spend a lot of time about students being financially prepared for college. We need to have very direct, unambiguous conversations with students and those who pay the bill,” Votruba explained.

Stewart said that new financial literacy programs are in place on top of student loan entrance and exit interviews. The goal is to help educate students on how many loans they can manage and how to pay them back.

“We are looking at some other initiatives; early intervention measures we can put in place,” Stewart said.

For students who have left the university and are finding difficulty in paying their student loan debt, or even keeping track of how much they owe, Stewart said her office is still available to assist them.

“We find that students leave and may not know, or may not have kept track of, how much they’ve borrowed … [or] not knowing their repayment obligation,” she explained.

They are doing more to help students keep track of how many loans they have taken by directing them to a website that tracks all their debt obligations for them. Students can access this through the MyNKU system.

The downtown in the economy may be the main culprit, Votruba and Stewart said.

“The economy…may be more of an impact than anything else,” Votruba said.

He added that NKU is battling the effect of the economy on current and future students by continuing to maintain its level of need-based scholarship funds each year despite the continuous cuts in the state allocation.

Story by Jesse Call