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Supporting borrowers through information and advocacy

Financial Wellness
May 27, 2015 Andrew Morse University of Northern Iowa

Today, more than two-thirds (69 percent) of new baccalaureate graduates pay for school, at least in part, through student loans. But the problem is not just in the number of students who accrue debt.  Throughout the past two decades, average debt at graduation has increased by 200 percent. If this trend continues, average student debt will soon eclipse the starting salaries of new graduates. 

For borrowers, accruing debt is often an anxiety-invoking experience that adds pressure to the key decisions that these individuals face during and after college. Too often, the burden of repayment harms individuals who hold debt from establishing a livelihood that enables them to achieve long-term economic well-being. 

Our nation’s borrowers need help and resources to ease the burden of repayment. In 2014, President Obama announced steps that intend to ease the burden of student loan repayment. Among the actions were to cap payments of federal loans at 10 percent of a borrower’s monthly income and to incentivize private lenders to work with struggling borrowers. This year, President Obama released the Student Aid Bill of Rights, which outlines four guiding principles to protect borrowers:

A Student Aid Bill of Rights

I.   Every student deserves access to a quality, affordable education at a college that’s cutting costs and increasing learning.   
II. Every student should be able to access the resources needed to pay for college. 
III. Every borrower has the right to an affordable repayment plan. 
IV. And every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans.  

Strategies to support our nation’s students who finance their postsecondary education through loans, however, will do little good if those who qualify for support are unaware of its existence. To build upon the knowledge of resources and repayment options that are available to borrowers, the U.S. Department of Education Office of Federal Student Aid has initiated a spring campaign to share this information with students and the broader higher education community. 

Through this campaign, the Office of Federal Student Aid is sharing its web-based resources, which include an online guide to the repayment of student loans. The guide features information about the various repayment options for borrowers as well as information and resources that may help those who are struggling with repayment. Additionally, the Office of Student Financial Aid highlights five mistakes to avoid with student loans. The resources and information made available to borrowers may, at least in part, provide support for borrowers prior to and during repayment. 

Enabling and empowering students to make informed decisions is an important aspect of effective student affairs work. Although more work is yet to be done to address lingering issues of student debt and affordability, it is important to give attention to the resources and information that presently exist to support the success of today’s students.