04/27/2016

Relieving student debt, one loan at a time

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The fight against the overwhelming student debt burden in this country just got more personal. A new government campaign not only improves the loan servicing system, it reaches out to individual debtors to be sure anyone who has taken out a student loan knows there are good options for reducing or even forgiving that debt.

The campaign, launched April 27 by the Department of Education, the Department of the Treasury and the Consumer Financial Protection Bureau, and supported by the White House, is designed to:

  • Modernize credit reporting for student loans (so that the loans contribute in a positive way to credit history).
  • Protect borrowers from inaccurate information, inconsistency and lack of accountability among rogue loan servicers.
  • Require that borrowers receive personalized and easily understood information about payback options.
  • Launch StudentLoans.gov/Repay, a website that breaks down complex loan repayment options into five steps tailored to the user's specific loan profile.

Weingarten and Roberto Rodriguez at debt eventThe initiatives were announced immediately following a presentation by AFT President Randi Weingarten and Roberto Rodríguez, President Obama's deputy assistant for education, urging nonprofit and government agency employers to take the Student Debt Challenge issued by the White House and educate their employees about student debt relief options available to them. (Weingarten and Rodríguez are pictured with Layla Zaidane of Generation Progress, left, and Charlotte Handcock from Higher Ed Not Debt.)

The presentation, which also involved representatives from the Center for American Progress and Generation Progress, described several ways to reduce or exclude student debt, from debt forgiveness available to many people who work in public services, to reduced payments based on income, to lowered interest rates.

AFT-sponsored student debt clinics have led the way in teaching people about these sorts of options. The teaching events are held on campuses, in workplaces and in community centers, and serve people like the ones who tell their stories on the AFT's student debt blog. The AFT even held a clinic at its own headquarters for AFT staff. Participants have saved thousands in student debt.

Currently, some 40 million people owe an average of $33,000 on student loans. An estimated 33 million people qualify for debt forgiveness for public service, but just over 222,000 have taken advantage of it. Even more qualify for adjustments so their monthly payments are more manageable.

"We can't be a country that tells students that higher education is essential, then saddle them with crippling debt and a compromised financial future," says Weingarten. "We started the AFT's student debt clinics to not only help student loan borrowers and their families lessen and manage their debt, but to empower a new generation of grass-roots activists to work to eradicate the national student debt epidemic."

The AFT's commitment to reducing student debt runs deep and includes a concern over its disproportionate impact on communities of color, its impact on lower-income people striving to reach the middle class and its dampening effect on the economy, issues covered in AFT On Campus last fall.

[Virginia Myers]

The faces of student debt

Read personal stories of student debt on Voices On Campus.