Student Loan Debt: Rights & Relief

fileLast week, friends and cohorts from Chicago’s social services community joined LAF and Joseph Sanders, Assistant Attorney General from the Illinois Attorney General’s Consumer Fraud Bureau, to discuss student loan debt—an issue social service providers like LAF are seeing more and more among its client population. “Having student loan debt that is past due harms people’s chances of landing a job, obtaining permanent housing, and pursuing further education down the road,” said Kulsum Ameji, Staff Attorney in LAF’s Community Engagement Unit and moderator of the discussion.  “It can actually exacerbate poverty and push vulnerable people deeper into the cycle of poverty.”

The idea of higher education leaving people worse off runs contrary to the narrative that has shaped how we’ve talk about education for generations. As President Johnson famously said as he signed the Higher Education Act of 1965 into law—which greatly expanded financial assistance for higher education—the “nation could never rest while the door to knowledge remained close to any American.” But as enrollment rates skyrocketed, so did tuition—and at a rate that outpaced income growth, forcing more and more students to take on large amounts of debt to finance their education under the universal assumption that investing in education will lead to higher income and more opportunities for a better life.

Today, with $1.4 trillion of student loan debt in the United States—more than either credit card and auto loan debt and now second only to mortgage debt—and a default rate of 11%, the question of the real return on investment in education is starting to surface. “We have such a positive view of education that we don’t think about its costs the way we do when we’re buying a car,” explains Shelmun Dashan, Staff Attorney in LAF’s Consumer Practice Group. “Most people don’t go to school just for the intrinsic value of learning—we have the goal of achieving a higher income or changing careers, but a lot of times we haven’t done the homework to figure out if what we’re doing will actually meet those goals. Private lenders let you take the loans out regardless, and that gets you in trouble—which they know. They depend on people having this positive association with education and not thinking about what it really means.”

Being an empowered consumer takes some time and research. Is the price tag worth what I’m getting? Are there other ways to get what I want? Apply that same mindset as best you can to higher education, advises Kathryn Liss, Senior Attorney in LAF’s Consumer Practice Group. “It is absolutely imperative in this climate that people really compare the costs, the financial options, and the subsequent opportunities.”

And while educating people considering going back to school now or in the future is a sound preventative approach, there are plenty of resources for the millions already grappling with student loan debt. “Even if we’re not able to take every case out there, we want to be sharing resources and playing a role in connecting people who need help with student loan debt to other organizations that focus on those issues,” Katie says.

That’s where folks like Joseph come in, who helps oversee the IL Attorney General’s Student Loan Helpline. “We started the helpline back in 2015, training five of our Citizen Advocates specifically on student loan issues, he explains. “They are there to assist with anything related to student loans. Even if they’re not your loans, for service providers it can be helpful if you’re working with a client and have a question.”

As student loan debt affects more and more people—disproportionately those from low-income and vulnerable communities—it’s important for community partners to continue having these conversations. Thanks to Joseph and everyone who joined us for this fruitful discussion!

 

 

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