According to Inside Higher Ed, President Barack Obama’s administration plans to send out emails directly to about 3.5 million borrowers of federal student loans in an effort to raise enrollment in the government’s income-based repayment programs.
The news outlet said that the emails will be delivered starting this month and continuing into mid-December to gauge borrowers who officials think will benefit from income-based repayments. “The 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,” Brenda Wensil, the chief customer experience officer for federal student aid, said according to Inside Higher Ed.
The news outlet said that people who owe more than $25,000 in loans and are in grace periods would be targeted first.
Deanne Loonin, a lawyer at the National Consumer Law Center who leads its Student Loan Borrower Assistance Project, said she thought the campaign would be helpful in educating borrowers. “Once somebody knows about it, we need to do a better job of helping people get into the program and stay in the program,” Loonin told Inside Higher Ed. Loonin also said the U.S. Department of Education has not been transparent about income-based repayments.
“The department has not been forthcoming about who’s been able to get on [income-based repayments], and of those who are on it, what the attrition rate is,” Loonin told Inside Higher Ed. “We need more information about what’s going on, so we can do more educated interventions.”
It should be noted that the median salary for graduates has fallen recently, from $30,000 in 2007 to $27,000 in 2011, so income-based repayments may be hard for recent graduates trying to pay other bills. For many student loan borrowers, a Chapter 7 or Chapter 13 bankruptcy could help even though their student loan debt is nondischargeable, as you can discharge credit card debt, medical bills and unsecured personal loans.
Contact our Washington DC and Maryland bankruptcy lawyer to learn more about whether you should file bankruptcy to deal with your student loans. If you have student loan debt, bankruptcy may be able to help you even if you thought it could not. Call us at (202) 483-6070.
Law Firm of Kevin D. Judd
Judd’s Judgment: The Washington Business Journal reported earlier this year that District residents had an average student loan balance of $47,390.