To have enough money to pay rent and buy food as a college student, Rebekah Hollers worked overnight at Kroger. She would sleep whenever she could find time between work and classes at West Virginia University.
She was the first person in her family to go to college — her mother finished high school but her father only finished sixth grade. They were a blue-collar family, and Hollers was home-schooled. When it came time to go to college, the only financial aid she received was the Pell Grant, a small need-based federal grant that didn’t come close to covering all her tuition, fees, books and cost of living.
“They weren’t able to help me at all. I had to do that all on my own,” Hollers, 36, said. “I took out everything I could, because that was the only way I could survive.”
When Hollers finally graduated in 2007, life only got harder. Doctors couldn’t figure out why she was losing vision in her left eye, and without health insurance, she racked up thousands in debt before she was diagnosed with multiple sclerosis in 2010.
She declared bankruptcy, but that wouldn’t wipe away the nearly $50,000 of student loans she had. Her monthly student loan payment was too much, so she defaulted.
“We tell kids here the same thing they’re told in every other state in the country, that they can be anything they want. They go to college to try to do that, and we don’t have a job for them when they get out,” Hollers said. “They have to take whatever they can find, and it generally doesn’t pay what is needed.”
Hollers is one of thousands of people in West Virginia who have defaulted on their student loans, an issue that causes years of financial devastation. New data from the U.S. Department of Education released last week shows students of West Virginia colleges default at a higher rate than any other state. This was shown in the latest federal department’s cohort default rate — a number showing how many students default on their loans within three years of graduating.
A person defaults on student loans when he or she doesn’t make a payment for 270 days, or roughly nine months.
The state’s new default rate sits at 18.3 percent, a 2 percent bump from last year and the largest increase of any state. This means, of the more than 52,000 people who started to repay their loans in the fall of 2013, there were 9,560 people who defaulted by Sept. 30, 2016.
This is the highest the state’s default rate has been in recent years. Data released in 2012 put the default rate at just under 10 percent, which increased to 18.2 percent two years later, according to a U.S. Department of Education spokesman. The number dipped slightly again last year to 16.2 percent, only to rebound even higher in this year’s rate.
Hollers went to school at a time when it was significantly cheaper to earn a degree. She graduated in 2007, but it took her five years to finish. From the time she entered college to this year, the average cost of tuition for public colleges in the state has more than doubled, a recent report from the West Virginia Center on Budget and Policy shows.
Since the cohort default rate only includes people who default soon after graduating, the total number of people who will default likely will rise. Nearly 40 percent of people with student loans are either currently in default or are more than three months late on making a payment, according to a January report from think tank Demos.
Missing loan payments or defaulting can ruin a person’s credit score, making it harder to find housing or secure a loan. Nearly two-thirds of people with student debt delay saving for retirement, and 35 percent say they struggle to buy daily necessities, according to the group American Student Assistance.
Only one in four college students studying in West Virginia are able to get through school without taking on any student loans, according to a report from the Institute for College Access and Success. About 77 percent of students here have to take out some sort of loan — the highest rate of any state.
Brian Weingart, the senior director of financial aid for the state’s Higher Education Policy Commission, said West Virginia’s rate is significantly driven up by one institution in the Eastern Panhandle.
American Public University System is a private for-profit school located in Charles Town. The school’s students, though, are spread across the country because the school offers online degrees, mostly to veterans. The school had about 22,600 students included in this year’s data who needed to repay their loans. That’s more than three times the number of WVU students who started to repay their loans the same year. Of those 22,600 American Public students, about 5,500 defaulted in three years, roughly 23 percent.
Combined, all the other colleges in the state had about 3,900 defaults.
“If you take that one school out, our state default rate would go from 18.3 percent to 14 percent,” Weingart said.
That would still be higher than the national average, though. For the first time in four years, the national default rate has increased, from 11.3 percent last year to 11.5 percent.
Schools that have default rates of 30 percent or greater are required to assemble a default prevention task force to figure out what is driving up their rates. Should a school’s default rate stay at 30 percent or higher for three consecutive years or top 40 percent in a single year, the school could lose access to federal financial aid programs like the Pell Grant and federal student loans.
The federal education department takes that threshold seriously. It targeted 10 schools this year, mostly public schools, that could lose access to federal student aid for default rates it said were too high.
The schools with the highest default rates in West Virginia were the public community colleges. All but one of the nine two-year schools had default rates of 20 percent or greater. Two schools in West Virginia broke the 30-percent threshold: Southern West Virginia Community and Technical College, with a default rate of 31.1 percent, and Eastern Community and Technical College, with a 30.4 percent rate.
Those schools are some of the smallest in the state. Though the rate is high, both schools had fewer than 40 students default.
BridgeValley Community an Technical College was the only one with a default rate below 20 percent. It had a 14.4 percent default rate.
“The two-year [colleges] are doing a really good job of limiting the number of students who are borrowing student loans,” Weingart said. “So when you have less students borrowing, and a few students default, it looks like you have a higher default rate.”
Comparing data released this year to data released three years ago, there is only a marginal difference in the number of students who took out student loans at the eight community colleges — six fewer students this year (out of more than 5,000). There was, however, a 1 percent drop in the default rate over the same period.
Hollers is now a single mother raising a 6-year-old son and has pulled herself out of default — finally.
It took nine months of tackling higher monthly payments to do it, though, and she had to work two jobs just to manage. It’s hard for her to see a time when she won’t need to hand over a slice of her paycheck to her debt. If all goes as planned, she should pay her loans off sometime in her 50s.
She’s currently on an income-based repayment plan, a setup that allows her to make a payment the federal government says is reasonable for someone with her salary.
“Defaulting is a very shameful thing,” Hollers said. “It’s part of how we’re raised in this state. We’re proud, hardworking people, and when we can’t make ends meet, we say to ourselves, ‘We haven’t worked hard enough.’ But it’s just impossible at times.”
Sometimes she said she thinks about what she would have done differently. She said she probably would have taken more general education classes at a community college, or maybe she would have gone into a more lucrative career field instead of trying to be a history teacher.
“This sounds terrible, but I would tell my younger self, ‘You can’t be anything,’” Hollers said. “You really can’t, not in our current system. You need to figure out what you can do to make money and do that. The American dream doesn’t exist for everyone, and you cannot be anything you want.
“I still tell my son he can be anything he wants — how could I not?” she said. “I’m hoping things are much better for him.”