News Column

Student financial aid officers like additional options

June 11, 2014

By Lenore Sobota, The Pantagraph, Bloomington, Ill.

June 11--NORMAL -- President Barack Obama's plan to expand student loan relief was praised by local student financial aid officers for providing more options and equity, but its impact on students from Illinois State and Illinois Wesleyan universities is likely to be minimal, they say.

"We always say, 'The more options for the students the better,'" said Jana Albrecht, ISU director of financial aid. But there are so many payment options, it is difficult for some students to decide what's best for them, she added.

Scott Seibring, IWU director of financial aid, said the changes directed by Obama in his memorandum to the education and treasury secretaries, will be more equitable.

Currently, the "pay as you earn" option, which caps payments at 10 percent of the borrower's monthly income, is not available to students who took out direct federal loans prior to October 2007.

The new plan includes loan forgiveness after 10 years for people in public service jobs and 20 years for other jobs.

"There have been things like this before, but this is a little more generous," Seibring said.

Part of Obama's initiative is aimed at borrowers who are having trouble making loan payments.

The memorandum directs the education secretary to develop strategies targeted at "borrowers who may be struggling to repay their federal student loans."

However, Albrecht and Seibring noted, the student loan default rates at their institutions are about 3 percent -- well below the national average 14.7 percent reported by the Department of Education.

Obama also endorsed a bill, introduced by U.S. Sen. Elizabeth Warren, D-Mass., and co-sponsored by U.S. Sen. Dick Durbin, D-Ill., that would allow refinancing of student loans at lower interest rates.

Durbin was at ISU late last month urging support for the bill, which could come up for a vote Wednesday. Opponents object to paying for the measure by increasing taxes on millionaires.


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Source: Pantagraph (Bloomington, IL)

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