Graham wants Congress to address student loan debt

Joshua Plummer, a senior majoring in criminal justice at Florida A&M University, plans to enter graduate school next summer. After that, he has his eyes set on law school.

But career aspirations aren’t his major concern. What keeps the Dublin, Georgia, native awake at night is the $19,000 in student loan debt he has accrued.

“I did come to FAMU with a couple of scholarships, but I still had to make up about half of the cost of tuition,” he said, explaining the need for loans. Since being enrolled, he’s worked with counselors who have helped him land grants and scholarships, which have eliminated the need for additional loans.

Daniela Fernandez, a senior history and international affairs student at Florida State University, faces similar challenges. She was successful in obtaining some scholarships on her own, but had to resort to loans to help with other expenses. She owes about $10,000 now and expects that to increase.

“The loans help me live,” said Fernandez, who now is applying to law schools. “They pay partially for my apartment rent, books” and other expenses not covered by scholarships. She expects to graduate next spring - with about $15,000 in student loan debt.

Plummer and Fernandez were among a group of FSU and FAMU students who met Wednesday at City Hall with U.S. Rep. Gwen Graham, who intently listened to stories from students at the roundtable.

Graham was introducing legislation, the Employer Participation in Student Loan Assistance Act, she plans to file when Congress returns. The legislation would address student loan debt and is designed to provide incentives to employers who agree to help students retire student loan debt. Under the proposed bill, employers would be allowed to repay an employee’s debt up to $5,250 a year, without the employee having to pay taxes. The employer also would be able to write off the payment.

Graham explained that current law allows employers to pay for continuing education for an employee, up to $5,250 a year and the employee doesn’t have to claim the incentive as income for tax purposes. But there’s no incentive for an employer to help pay down loan debt.

Graham describes her plan as a “win-win” allowing employees to add an additional incentive to a strong job applicant, and it gives the employee reason to remain loyal to the employer.

Graham said she has received support from U.S. Rep. Rodney Davis, R-Illinois, who will co-sponsor the bill in a show of bipartisan support.

“What this bill will do is help employers help their employees in paying off that debt,” Graham said. “Employers could use it as an additional benefit to get an employee to come to work for that company.”

Graham noted that the average FSU student, who has relied on loans, graduates with an average of $20,000 debt, while it’s more like $30,000 at FAMU.

“That takes a long time to pay off,” Graham told the students.

And, there are consequences of that financial burden. Graham said.

For instance, Tallahassee Realtors have told her that graduating students seeking mortgages for a starter home often are often denied because of student loan debt. At the same time, bright students interested in becoming entrepreneurs are reluctant to venture out because they worry about not having a steady paycheck to pay down their loans.

“We need to be doing everything we can to help students get an education,” Graham said. She added that Congress was “short-sighted” in agreeing to tie student loans rates to the cost of inflation.

Both FSU and FAMU recognize that college affordability is an issue in recruiting and keeping students in school. More emphasis is being placed on personal counseling in helping students obtain scholarships and grants rather loans, which should be a last option.

Darryl Marshall, assistant vice president in the FSU Office of Financial Aid, told Graham on Wednesday that FSU has reduced total student loan debt from $215 million in 2011-12 to $196 million in 2014-15.

“That’s still a lot of money, a lot of debt," said Marshall, a Quincy native. He said FSU has been able to reduce its student loan default rate from 6.9 percent three years ago, to 5 percent today. The national average is 11.8 percent and 14 percent in Florida.

About 13,000 FSU students qualify for the Pell Grant, which is based on family income.

At FAMU, 68 percent of students receive Pell grants, said Nigel Edwards, associate vice president for student affairs/enrollment management.

FAMU has reduced its student loan default rate from 18.9 percent three years ago to 14.7 percent today.

Edwards said the university has added more resources and focus on reducing the size of the debt awaiting FAMU students after they graduate.

Both Plummer and Fernandez expressed support for Graham’s proposal in light of the financial challenges they face.

“I am worried,” Fernandez said. “I’d like to go to law school in D.C., where there are other opportunities, but the loans really limit my choices.”

Contact senior writer Byron Dobson at bdobson@tallahassee.com or on Twitter @byrondobson.