Imagine the positive impact on our nationís student loan delinquency problem if we implemented that line of attack across the board and focused on prevention instead of the cure of collections. Such an approach would lessen the overall cost of the federal student loan program because more default prevention means fewer fees that need to be paid by the government on student loan collections. This saves a borrowerís credit and saves the federal government money. A win-win.
Lawmakers reauthorizing the Higher Education Act should look to divert some of the profit from the federal student loan program to expanded financial literacy and debt management programs that will stop student loan delinquency before it can even set in. Letís help student loan borrowers understand a repayment landscape dotted with jargon, bureaucracy, and payment plans with distressingly similar names but very different benefits and outcomes. Letís give them an advocate whoíll take the time with phone calls, online chats and/or multiple e-mail exchanges to examine their whole financial picture and help them find the best long-term payment solution. Simply put, as long as our nationís higher education policy relies on loans to provide college access and choice, letís give our student loan borrowers what they deserve.
Paul Combe is president and CEO of American Student Assistance.