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Asking the Right Questions About Student Loan Debt

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There’s no doubt about it: Student loans can be a big financial burden to recent college graduates.

But if borrowers are provided with more information on repayment plans and other tools to help manage debt, chances are they’ll be less likely to default on their loans, according to a panel conversation on student loans at the Education Writers Association’s 2015 national conference in Chicago.

It’s also important that journalists, when writing about students who are struggling to pay back their loans, go beyond the basics and find out if borrowers were made aware of various repayment options.

“I want to know why they’re defaulting,” said Reyna Gobel, an expert on student loans who has written widely on the topic. “There are so many options for repayment.”

The panel, one of a three-part session at EWA’s April seminar focusing exclusively on student loans, touched on a wide-ranging set of tools the U.S. Department of Education makes available to the public for information on student loan repayment and the true cost of college.

Katherine Sydor, a senior policy advisor at the Education Department, talked about the College Affordability and Transparency Center, where users can search through a variety of information on college costs, such as which public, four-year universities have the lowest and highest net prices.

There’s also College Navigator, where users can find graduation rates, student loan default rates, as well as data on financial aid.

Sydor also discussed efforts to educate student loan borrowers about repayment options.

The Education Department has made an effort to work with colleges and urge them to do more to explain the types of repayment plans available to students after they leave school. Despite those efforts, just one-quarter of borrowers in their grace period have sought out any resources about student loan repayment options, Sydor said.

Why more borrowers aren’t seeking resources prior to leaving school is difficult to say. But Sydor discussed how, through a survey, the department learned how some borrowers view their student loans. She described how one respondent didn’t have enough money to pay back loans and decided that ignoring them was the only solution.

“This is a problem for us,” she said, “and it’s one that we’re trying to deal with every day in making sure that type of borrower knows there is help available for them.”

Journalists can help by informing readers of the available repayment options, Sydor said.

“We have these very generous income-based repayment options,” she said. “It’s very likely that someone in that situation could take advantage of at least one of them.”

Gobel, who has written widely on student debt, talked about the need for journalists to ask more probing questions when writing about borrowers whose loans far exceed the norm.

Nationally, borrowers who graduated from college in 2013 owed an average of $28,400, according to the Project on Student Debt. If a journalist encounters a student who owes upwards of $60,000, it’s important to clarify what portion of the student’s loans came from the U.S. government versus private loan providers.

It’s also important, Gobel said, to inform readers about whether that debt covers just the student’s undergraduate education or if it includes graduate school, too.

Another issue journalists should be aware of, Gobel said, is struggling borrowers who are being charged the incorrect amount in monthly payments.

She told the audience about a cancer patient who was told by her loan guarantee agency to pay $500 a month or else she would go into default. Gobel said she called the media line inquiring further about the situation.

It turned out, she said, that customer service was giving the cancer patient inaccurate information. The patient’s payment was supposed to be $5 a month, not $500.

“So a simple phone call, not even legislation, made the difference for this woman who had cancer,” Gobel said. “We have the power to do that every day, because we can call the media lines, and we can get this done.”

For another view of college costs, take a look at Tuition Tracker, a joint project by EWA, The Hechinger Report, The Dallas Morning News and the Omaha World-Herald. You can figure out the true costs of higher education for more than 3,000 institutions based on family income.