Advocates Press for Reform Before Student Loan Repayment Deadline
Monday, August 30, 2021
SACRAMENTO, Calif. - In January, student loan borrowers will have to start paying off their loans again, as the pandemic-related pause on payment is set to expire. Now, a new report looks at ways to fix problems in the student loan system.
Report co-author Michelle Dimino - senior education policy advisor at Third Way, a public policy think tank in Washington, D.C. - said the repayment programs are far too complex, especially for teachers, health workers and social workers who apply for the public service loan forgiveness program.
"Right now, only about 1% of applicants who are submitting for public-service loan forgiveness are actually seeing their applications approved," said Dimino.
The report also found that the income-driven repayment plan is reaching far too few people, and many borrowers become discouraged when their payments only cover the interest and not the principal on the loan.
In the U.S, 45 million borrowers are struggling under $1.6 trillion in student loan debt.
Dimino said now is the time to consider proposals to cap interest on student loans, to limit interest to the amount required to service the loan, or to transition to upfront one-time fees instead of charging interest.
"It's an opportunity in the lead-up to the lifting of the repayment freeze to really think about whether there are alternatives to interest," said Dimino, "lower interest rates, grace period with interest, or other policies - that could help to ensure that borrowers are actually paying down the principal that they've taken out."
Starting in October, the U.S. Department of Education's new committee on student loan reform will tackle these issues in a monthly series of meetings. The hearings will be open to the public via livestream.
Support for this reporting was provided by Lumina Foundation.
get more stories like this via email
Health and Wellness
ALBANY, N.Y. -- A new survey shows most New Yorkers approve of medical aid-in-dying legislation, and advocates for end-of-life autonomy said it is …
COLUMBUS, Ohio -- Ohioans across religious traditions have come together as one voice this week to speak out against capital punishment. Dozens of …
SPRINGDALE, Ark. -- New efforts are underway to help small-scale farms in Arkansas expand their business. The Food Conservancy, a northwest Arkansas …
COLUMBUS, Ohio -- A high percentage of rejected voter registrations in three of Ohio's biggest counties is raising some red flags. According to the …
CORRECTION: The last day to request absentee ballots in Virginia is Fri., Oct. 22. An earlier version of this story incorrectly stated that Oct…
ST. PAUL, Minn. -- A special court panel is hosting public hearings this month, asking Minnesotans what new political maps should look like, and …
ARLINGTON, Texas -- Texas has some of the weakest gun laws in America, and gun-control advocates say the permissive attitude may be why a student …
ALBUQUERQUE, N.M. -- As the pandemic wanes, hunger and food insecurity are also on the decline, but the need is still far above pre-pandemic levels…