Student loans have helped millions of college students pay for their college educations. Opinions vary about whether student loans are always a good idea, but there’s little doubt they’ve helped many people afford the skyrocketing costs of attending college. To students incurring student loan debt, the issue seems far away; after all, you don’t have to start repaying most student loans until after you leave college.
But recently, a chorus of voices from around the nation has raised alarm bells about the growing amount of student debt, calling attention to the fact student loans are saddling new graduates with often-unsustainable levels of debt just as they are entering the workforce. And others have expressed concerns that student debt can linger for decades after students have turned in their caps and gowns, sometimes putting a dent in their (and their parents’) retirement plans and grocery money.
According to the Consumer Financial Protection Bureau, more than 40 million Americans are repaying more than $1.2 trillion in student debt. And here in Mississippi (according to the Project on Student Debt), students in four-year colleges graduate with an average of more than $25,000 in debt.
Perhaps surprisingly, a lot of that debt is being repaid not by people in their 20s, but by older people, often in their 60s or 70s. They might be still paying lingering loans from college they attended decades ago, are parents or grandparents who cosigned or took out loans on behalf of their children or grandchildren, or incurred student debt as a result of their own midcareer retooling.
Much of the attention and concern lately has centered on student loan servicers. Student loans may be backed by the government, but private companies are responsible for making sure you pay back the loan.
These are private companies, assigned by the U.S. Department of Education in the case of federal student loans.
The Consumer Financial Protection Bureau has recently gotten involved in the discussion about student loan servicing, citing these alarming statistics from the General Accounting Office:
Between 2005 and 2013, outstanding federal student loan debt owed by older borrowers grew from less than $3 billion to more than $18 billion, a more than a six-fold increase.
Delinquency rates for older borrowers doubled between 2005 and 2012, rising from 6 to 12.5 percent.
Older borrowers defaulted on federal loans at much higher rates than other borrowers. More than a quarter of federal loans owed by consumers ages 65-74 are in default. For borrowers 75 years or older, more than half of outstanding federal loans are in default.
And it’s affecting their day-to-day lives, as well. The number of older consumers whose Social Security benefits were offset for the collection of federal student loan debt quadrupled from 2002 through 2013. For consumers 65 or older, the increase was roughly 500 percent.
So now, the Consumer Financial Protection Bureau is trying to collect information from consumers who have been affected by “student- loan stress.” The agency reports that many complaints from older consumers include being billed for loans they never borrowed, receiving harassing and abusive debt collection calls, being wrongly charged fees because of the servicer’s accounting errors, and having their credit rating impacted.
If you want your story to be part of the discussion, visit http:// tinyurl.com/okp69rf and tell it, or send an email to FederalRegisterComments@ cfpb.gov. You might want to talk about options to discharge or reduce student loan debt if a co-signer dies, how your loan payments are processed and applied, charging and disclosure of late fees, the process of filing complaints, disclosure to credit reporting agencies and more. If you want your information included for the record, don’t enter any sensitive information like account numbers and Social Security numbers. The agency will be collecting input until July 13. To join the discussion on Social Media, use #StudentDebtStress.
And if you’re having trouble with your student loan servicer, you can submit a complaint to consumerfinance.gov/ complaint or call1-855411-2372. There are many options to help you get back on track with paying your student loans, but the worst thing you can do is try to ignore the problem.
Visit http://tinyurl.com/ kbqgndd to find out your options.
Originally published in the Clarion-Ledger on 6/12/2015.
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