U.S. Department of Education Announces Additional Efforts to Inform Student Borrowers of Repayment Options
As part of the Obama administration's agenda to make college more affordable, the U.S. Department of Education's Office of Federal Student Aid (FSA) is announcing today an outreach campaign to groups of federal student loan borrowers to make sure they know and understand all their repayment options. This past weekend, FSA began contacting groups of borrowers via e-mail to ensure they are enrolled in the best available repayment plan.
This new outreach augments the day-to-day communications provided by borrowers' student loan servicers. FSA's campaign is aimed at reducing borrower delinquency and default, and improving awareness of income-driven repayment plans. Income-driven repayment plans allow borrowers to repay their student debt on a sliding scale that adjusts their payments based on their income and family size.
"Reaching out to borrowers to ensure that they have the information they need to manage their student loan debt is an important part of the administration's proposals to improve college value and affordability," U.S. Secretary of Education Arne Duncan said. "Thanks to this outreach, coupled with ongoing outreach provided by student loan servicers, borrowers have the opportunity to learn more about their options to lower monthly loan payments and stay on track of their student loans."
The outreach will target federal student loan borrowers who can benefit the most from an income-driven repayment plan. Approximately 3.5 million borrowers will be contacted from now until mid-December. Concurrent with this outreach, FSA will conduct a social media campaign on Facebook, YouTube and Twitter geared toward recent college grads and borrowers. The campaign will focus on loan repayment options, common mistakes and general student loan advice.
The outreach campaign will target borrowers whose grace periods will end soon, borrowers who have fallen behind on their student loan payments, borrowers with higher-than-average debts, and borrowers in deferment or forbearance because of financial hardship or unemployment.
Borrowers who are contacted via e-mail will be prompted to access resources designed to educate them on repayment options, apply for an income-driven repayment plan, or contact their federal student loan servicer for additional information.
In addition to contacting groups of borrowers, FSA will soon launch a "one-stop shop" financial aid toolkit aimed at guidance counselors and other advisers who assist students through the process of selecting and financing their higher education, like staff or volunteers at community-based organizations. The toolkit will include resources covering the entire financial aid lifecycle, from applying for financial aid to repaying loans. The toolkit will also offer professional development information such as training opportunities and resources for self-instruction. More information about the toolkit will be provided closer to its launch date later this year.
The outreach this fall builds on ongoing efforts by the administration to improve college affordability. Thanks to President Obama and Secretary Duncan's leadership, Congress ended student loan subsidies for private financial institutions and banks and shifted billions in savings back to students; capped loan repayments at 10 percent of monthly income for many borrowers who are trying to responsibly manage their federal student loan debt; and worked with Congress to keep student loan rates from doubling this year -- saving typical undergraduates more than $1,500 for this year's loans.
As part of the administration's overall agenda to address rising college costs and make college more affordable for American families, the Department announced last week that it will host four public forums across the country to gather public input about its proposals. More information about the forums and the administration's plans can be found here.