The lawsuit filed recently by Attorney General Jim Hood in conjunction with the Center for Justice highlights the prevalence of Mississippians depending on student loans to go to college.
The lawsuit against Navient, filed in Hinds County Chancery Court, accuses the company of “unfair and deceptive practices” in the loans it both originated and serviced for the federal government. The lawsuit is asking the company to stop the practices and pay penalties, which under the state Consumer Protection Law, can be as much as $10,000 per instance.
Navient, the nation’s largest servicer of student loans, has denied any wrongdoing in the Mississippi lawsuit, as it has in lawsuits filed by four other states’ attorneys general and by the federal Consumer Financial Protection Bureau.
While the merits of the lawsuit might be debatable, there is no question about the dependency on student loans by Mississippians.
According to the LendEDU, based on 2017 data, Mississippi ranks 20th in terms of graduates with debt – 60 percent. The average debt is $29,166.
Hood attributes the high debt totals to the fact that tuition has increased (more than doubled since he took office in 2004 to an average $8,200 per year) and that state support for Mississippi’s publicly owned universities has decreased. In 2000, state support accounted for 56 percent of the eight public universities’ total revenue. Now it accounts for 28 percent, according to information supplied by the state Institutions of Higher Learning.
“Students are the future of our state, and the presence of companies in Mississippi that knowingly take advantage of students who need the money to continue their education will not be allowed under my watch,” Hood said.
The AG also said the high rate of student debt is contributing to what has been referenced as Mississippi’s brain drain – college educated young people leaving the state for jobs.
“We have lost more kids to the brain drain than any other state the past six years,” Hood said. “You can’t go back (after college) to a small town like I am from (Houston) unless your parents own a business or you have a professional degree.”
Hood was referring to census statistics showing that while the nation’s millennial population increased from 2010 to 2016, Mississippi’s dropped by 3.6 percent. During roughly the same time period, the state population decreased 35,000.
Hood says he believes at least some of that decrease can be attributed to young people with student debt leaving the state for better paying jobs to be able to pay their student debt.
According to LendEDU, 94 percent of the Alcorn State class of 2016 students had debt, and the average amount is $35,077 – the highest in the state.
Other Mississippi schools cited in the LendEDU report are:
• University of Mississippi – 48 percent of class of 2016 has debt, averaging $26,162.
• Mississippi State University – 57 percent of class of 2016 has debt, averaging $30,659.
• Jackson State University – 86 percent of class of 2016 has debt, averaging $28,311.
• University of Southern Mississippi – 68 percent of class of 2016 has debt, averaging $28,700.
• Millsaps College – 64 percent of class of 2016 has debt, averaging $31,419
• Belhaven University – 79 percent of class of 2016 has debt, averaging $29,738.
• Mississippi College – 68 percent of class of 2016 has debt, averaging $25,157.
• Blue Mountain College – 65 percent of class of 2016 has debt, averaging $20,483.
Other Mississippi schools were not cited in the report.
LendEDU is an online marketplace for multiple financial products.
Mississippi is ranked fourth highest in the country in terms of defaults on student loans, according to the Center for Justice.
Charles Lee, consumer protection director for the Center of Justice, cited Ashlyn Booker, a Jackson resident who has been paying $300 per month for roughly 13 years on her student loan, yet, she has paid off only $6,000 of the principal.