When a borrower calls the Oklahoma Student Loan Authority with a problem repaying a student loan, Customer Service Supervisor Mary Anne Evans and her staff try to find a way to help, whether it means a deferment, forbearance or reduced payments.
“Generally, we try to assess their situation, whether it be unemployment, economic hardship, or it could be that they are going back to school,” Evans said.
However, there's only so much the student loan authority, which services about 150,000 educational loans in the state, can do to help borrowers, said Larry Hollingsworth, vice president of loan management for the authority.
“We don't really have a magic wand — we're not able to make their student loan debt go away,” Hollingsworth said. “It's still a debt that they have incurred, and that they have to repay.”
Data from the U.S. Department of Education shows that Oklahoma has one of the highest student loan default rates in the nation.
Students are borrowing more than they were just a decade ago because of the higher cost of a college degree, Hollingsworth said.
“I do think the amount of loans they take out has increased as tuition costs have increased,” he said. “Students borrow more to help with school costs, so more students are having difficulty than they were five years ago or 10 years ago.”
A report released last month by the Federal Reserve Bank of New York found that over the past eight years, the amount of total outstanding educational debt in the United States has nearly tripled, swelling to almost $1 trillion.
The number of student loan borrowers and the amount each borrower owes both have increased by 70 percent since 2004, the report found.
Oklahoma had the fifth-highest default rate in the country in 2010 compared with other states and U.S. territories, according to the most recent data available from the U.S. Department of Education, released in August 2012. Only Puerto Rico, Arizona, Arkansas and California surpassed Oklahoma in the rate of student loan defaults.
Oklahoma's student loan default rate was at 13 percent in 2010, compared to 9.1 percent nationally.
More recent data from the Federal Reserve Bank of Kansas City also shows higher student loan delinquencies in the state.
About 15.2 percent of student loans were delinquent in Oklahoma in the fourth quarter of 2012, compared to 9.7 percent nationally, according to consumer credit data from the Federal Reserve Bank.
Some try bankruptcy
Although loans can't typically be discharged through bankruptcy, many people file for Chapter 13 bankruptcy to help ease the burden of student loan debt, said Patrick Moore, an Oklahoma City bankruptcy attorney.
Debtors who file for Chapter 13 bankruptcy can get monthly payments reduced through a court-approved repayment plan while they get their finances in order, Moore said.
“Student loans are really going to be the new upcoming problem. I've seen a definite increase in people who have a large amount of student loan debt,” Moore said.
Cristy Cash, director of counseling for Consumer Credit Counseling Service of Central Oklahoma, said the nonprofit agency has seen a growing number of people seek its services because of student loan debt.
The problem of student loan debt can also be compounded with credit card debt and other financial problems, she said.
“We see more and more people come in with problems with student loan debt because they can't afford their repayment plan,” Cash said.
Ready, set, repay
The Oklahoma College Assistance Program, a division of the State Regents for Higher Education, launched a new website, readysetrepay.org, this month to help borrowers manage their student loan debt. The website includes information on repayment options for borrowers as well as loan consolidation and estimating loan repayments.