For those still trying to figure out how to repay your student loans, you may be surprised to realize how much things have changed for the better in just the last 5 years.
Here is my list (in no particular order) of what I believe to be the most positive signs for those struggling to repay their education loans.
1. Private Student Loan Ombudsman
Created by the Consumer Financial Protection Bureau, the private student loan ombudsman is an incredible, independent, impartial resource for private loan borrowers. Finally, a centralized resource for complaints and questions exists.
The CFPB ombudsman also provides a platform for policy advocacy as well as much needed industry oversight—as recently seen with its role in working with the nation’s largest lenders on ways to make repaying private loans more affordable.
Overall, the CFPB, and the organization’s Office of the Ombudsman is one of the best things to happen to the student lending space to date.
2. Income-Based And Pay As You Earn Repayment Programs For Federal loans
As I’ve discussed in previous posts, the Pay As You Earn and Income-Based Repayment plans are incredible resources for those currently repaying their federally guaranteed student loans. These programs provide a smooth transition into the working world and potentially serve as a financial lifeline for those underemployed or unemployed.
3. Further Oversight
These days, pressure on industry players is multifaceted. Members of the Justice Department and members of Congress, like Senator Elizabeth Warren of Massachusetts, are cracking down on abuses and demanding reform. This, of course, complements the efforts from the Consumer Financial Protection Bureau’s Ombudsman and the Private Student Loan Ombudsman.
4. The Media Is Paying Attention
Read the news any day, and it’s hard to avoid mentions of the $1 trillion student crisis.
Love it or hate it, the media play an important role in setting the tone of many policy debates. If that’s true, the media is right on the money when it comes to articulating the urgency for student loan reform, including refinancing options, bankruptcy reform, and more.
5. There’s More Hope On the Horizon
The Higher Education Act was last reauthorized in 2008, and Congress has begun discussing reauthorizing it this year. If Congress does reauthorize the act, this process is poised to be a key event where many different floated reforms will be debated and hopefully implemented.
This year, these reforms range from restoring bankruptcy protection to private student loans, to allow the refinancing federal and private loans to take advantage of historic lows, to enhance pre-college disclosures in order to help students make more informed financial decisions about their education.
What reform would you like to see? (You know, besides “eliminate all student debt.”)