The message is getting through: There are better ways to pay off your student debt.
According to new numbers from the U.S. Department of Education, nearly 5.3 million people are lowering their monthly student loan payments through income-based repayment plans—a 36 percent increase since last year, and a 110 percent increase since 2014. Public service loan forgiveness is also attracting applicants—nearly a million applications have been submitted and two-thirds have been approved. (This program forgives student debt for borrowers who have made 120 monthly payments while working for a “public service” employer such as the government or a nonprofit organization.)
The department has also announced that loan defaults and delinquency rates are falling. The improvements are due in no small part to efforts to educate borrowers about their options. The government has promoted loan relief and loan forgiveness through programs such as the Student Debt Challenge, which encourages employers to inform staff of their debt repayment options, and a recent push from the White House to streamline debt repayment.
AFT is doing its part to get the word out by organizing student debt clinics for members. The clinics already have reached hundreds of educators across several states and saved borrowers thousands of dollars in payments as they rearrange their loan conditions.
One woman, who attended a clinic in Miami, cut her monthly student loan payment from about $2,000 to $700; after she enrolled in the payback plan, she told organizers it was the first time she had slept well in three years.
At Lone Star College near Houston, more than 100 people benefited from a clinic in August, including one couple who carried $100,000 of student debt each. Participants were “extremely enthusiastic,” said Alan Hall, president of AFT Lone Star College, who helped arrange the clinic. “They filed out at the end and stopped to shake my hand and thank me for AFT’s efforts here to get them informed. We had a lot of people who had no idea about how to get out of their debt; everybody in the room benefited.”
The Texas local is planning more clinics at each of the six campuses in the Lone Star system, and Texas AFT also has held clinics in Edinburg, El Paso and Dallas. Some 40 million Americans owe money on their student loans, and until recently most have been unaware of policies for debt relief. Recent statistics show that an estimated 33 million people qualify for public service loan forgiveness, but just over 222,000 have taken advantage of it. Even more qualify for adjustments so their monthly payments are more manageable, whether through income-based repayment or by preventing loan servicers from overcharging borrowers on interest and fees.
AFT’s commitment to reducing student debt runs deep and includes a concern over its impact on communities of color and lower-income people striving to reach the middle class, as well as its dampening effect on the economy, issues covered in AFT On Campus—AFT’s publication for higher education members—last fall.
It also extends to the for-profit college sector, where students borrow heavily, hand the money over to these institutions and don’t always get a quality education in return.
For individual stories on how members are handling student loans, see our online higher education blog, Voices on Campus, at www.medium.com/voices-on-campus/.