Federal student loan debt exceeds $1.3 trillion, and in Missouri the average student debt is almost $26,000 according to the Institute for College Access and Success. The CFPB says 25% of student loan borrowers are either behind on their payments or are in default.
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What is important for these borrowers to understand is that they have options when it comes to paying back the money.
The ombudsman would also create a course explaining loan terms, repayment options and loan forgiveness programs available. For example, one plan lets borrowers specify their own payments, based on income. “Attending college should not require students to shoulder a lifetime of loan payments they can not afford”.
There’s a new federal website that can help you find the best way to pay back your student loans.
The Consumer Financial Protection Bureau on Thursday introduced a mock-up of a disclosure form called the Payback Playbook that lenders will provide to borrowers. In addition, the Education Department said it would seek to set clearer standards for how it wants loan servicers to collect federal loans.
For instance, say a borrower meets the requirements for the Pay As You Earn income-driven repayment plan, which would cap her monthly bill at 10% of her income. But the CFPB found in September 2015 that borrowers’ experiences with their servicers vary widely and that they don’t always get the help they need. PAYE would appear on the Playbook as one of two alternatives to her current plan, should the borrower choose to switch.
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The Government Accountability Office found past year that many eligible borrowers don’t participate in the income-driven repayment programs, in part, because the department doesn’t consistently notify them of their options.
