Student Loan Debt

The student loan problem seems clear enough on the surface: students are incurring oversized student debt, and they are defaulting on that debt and threatening their ability to access future credit. The methods used to collect student loan debt are troubled with problems, including unsuitable recovery strategies and limited unfair repayment options. The present policy conversations that take place between politicians tend to miss key issues that contribute to the debt chaos financial system that we have now.

The reported national average student debt loan only represents averages, the actual amounts owed can vary intensely from student to student. So called “Solutions” like the mandated debt calculator that can be seen on college websites

The government is making substantial profit on student loans, and this does not encourage quality and market-sensitive borrowing. A potential solution could be to lower the interest rates on government-issued funded loans. This has to be to most vulnerable to young student who are not aware of their situation. Student loans are financially risky to students should remain without regard to credit worthiness. Many colleges welcome students from lower income backgrounds and it shows in data that these students have less academic success although many are working to improve these stats. That being so, many accreditors prey on students if this caliber knowing that the fail rate is higher the odds of the student debt will payed back. An approach to consider is connecting payment rates with the types of students being helped by an

There are too many options and too many opportunities for students to choose in their situation. It’s been recognized that income-based repayment is very under-utilized, which then causes students become restricted rather than working through and with the options actually available. The mandated exit interviews and strategies are clearly not teaching this information. The system needs to inform students more vigorously and provide consideration to information at the time repayment starts which is usually six months after graduation.

Also, promote college and universities to work on post-graduation debt repayment awareness programs that educate about repayment options. Enforcing schools to establish programs where they aggressively reach out to their graduates to talk about repayment options would be a great initiative and will help dramatically. Improvement in debt repayment could be structured to allow increased institutional access to federal taxes that could better the school and more importantly better the society as a