It has been five years since outstanding student loan debt in America reached $1 Trillion. Higher education and student loan advocates refer to this ominous day as “1-TDay”. To mark this dubious date, we present you with Five Student Loan Facts You Need to Know About:
Student loan debt in America now exceeds $1.4 Trillion. That is a 14 with NINE zeros after it! Over 44 Million Americans of all ages and backgrounds have student loan debt and 25% of those people are in delinquency or default and struggling to make their payments. All of this debt has taken it’s toll on the economy. Americans with student debt are having trouble purchasing homes, creating small businesses and even starting families.
Secretary of Education, Betsy DeVos is a threat to student loan borrowers everywhere! During her brief tenure, the Department of Education has rescinded the Obama-era directive preventing additional fees from being tacked on to the loan balances of struggling borrowers. On top of that, a new DeVos memo will allow for poor performing and often predatory student loan servicing companies to continue to have access to high-paying contracts with the federal government. Simply put, big corporations are making more profits and student loan borrowers continue to pay the price.
The nation’s largest student loan servicer, Navient (formerly Sallie Mae), is facing THREE lawsuits by federal watchdog the Consumer Financial Protection Bureau (CFPB) as well as state attorneys general across the nation. The company’s deceptive, fraudulent and illegal practices include misapplying payments, steering borrowers away from lower monthly payments, failure to communicate vital deadlines and shamefully destroying the credit scores of disabled veterans.
The Public Service Loan Forgiveness Program is set to begin on October 1st. Qualifying borrowers with federal direct loans, who are in the correct repayment program and also have at least 10 years of public service or nonprofit work experience can submit this form to see if they are eligible for loan forgiveness. Unfortunately, the Department of Education recently rescinded on that promise for some borrowers. Nearly half a million Americans may lose their student loan forgiveness due to the Department’s unfair efforts to redefine who qualifies for the program.
There is a bright side! Senator Bernie Sanders (I-VT) recently introduced the College for All Act. This plan not only eliminates tuition at public colleges for families making up to $125,000, but also addresses the concerns of Americans currently impacted by student debt with reforms that cut all student loan interest rates in half, provide loan refinancing options for millions of borrowers and ensure the federal government never profits from the student loans again.
It is an uneasy and uncertain time for 44 million Americans with student debt, however, there is hope on the horizon. Advocates, allies and passionate supporters are working hard to ensure the next five years result in solutions to end the student debt crisis.
** If you feel that you have been wrongly denied for Public Service Loan Forgiveness, or have a student loan issue, submit a complaint to the Consumer Financial Protection Bureau (CFPB).
Student Debt Crisis is a non-profit (501c4) organization dedicated to fundamentally reforming student debt and higher education loan policies.