College Debt
May 8, 2018
Will repayment rules grow stricter?

With college debt reaching $1.5 trillion, Americans continue to default on their student loans at an alarming rate. The Trump administration has not made student debt a high priority, and critics say the administration’s few recommendations have favored debt collectors over borrowers. In a cost-saving move, Education Secretary Betsy DeVos reduced loan forgiveness for students defrauded by for-profit colleges and eliminated an Obama-era policy that awarded Federal Student Aid contracts to debt collection companies with the best records of helping borrowers. President Trump has called for eliminating a federal program that forgives remaining debt after 10 years for former students who work in certain public service jobs.

The U.S. Senate is considering a measure that would streamline student debt repayment programs and simplify and shorten the federal student loan application from more than 100 questions to 25. The high school class of 2017 left up to $2.3 billion in federal student aid unclaimed due to incomplete or unsubmitted aid applications, according to the personal finance website NerdWallet. (AP Photo/Jon Elswick)   The U.S. Senate is considering a measure that would streamline student debt repayment programs and simplify and shorten the federal student loan application from more than 100 questions to 25. The high school class of 2017 left up to $2.3 billion in federal student aid unclaimed due to incomplete or unsubmitted aid applications, according to the personal finance website NerdWallet. (AP Photo/Jon Elswick)

Student loan debt in the United States reached a record of $1.5 trillion this year, more than double the $620 billion consumers owe on credit cards. About 44 million Americans owe money on student loans, and the average 2017 college graduate owes $39,400 — up 6 percent from 2016. 1

Each year, about 1 million borrowers default on almost $20 billion in federal student loans, according to education officials. Those with the lightest debt loads (under $10,000) are the most likely to drop out of school before obtaining a degree and the most likely to default on their loans. They tend to be older and from low-income backgrounds, according to an analysis by the Center for American Progress, a liberal policy research and advocacy organization. 2

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