By Paul Atkinson
Student loan debt in the United States currently stands at more than $1 trillion, with the average student loan debt at $29,400 per borrower. This makes student loans the fastest-growing form of consumer debt in the country.
For the current generation – likely to be in the worst shape of all – student loan payments are a financial challenge that will stare them in the face for decades to come. Many recent graduates are locked into loans with interest rates anywhere from 7 to 14 percent.
Last week, Consumer Credit Counseling Service of Buffalo was pleased to hear that Sen. Charles Schumer, D-N.Y., has called on Congress to allow college graduates and young professionals to refinance their student loan debt to get the same interest rates now offered to current students.
The proposed legislation would let students and former students who took out a student loan before 2013 refinance their debt to get an interest rate of 3.86 percent, the same rate now offered to new borrowers.
According to the senator, the legislation would save 2.5 million New Yorkers an estimated $12.5 billion over the life of their loans. The legislation would apply to both public and private student loans.
Schumer’s bill presents a viable solution for millions of debt-saddled borrowers.
Last year, in response to the growing need for education and assistance with student loans, CCCS Buffalo launched its Student Loan Counseling Program, a service designed to assist individuals with student loans. To date, 208 people have received help from this program. Unfortunately, this is just the tip of the iceberg.
Schumer’s bill is recognition that student loan debt is a major national problem. We applaud this intervention, and seek additional, ongoing funding for student loan counseling.
Due to the complexity of the student loan market and options available during repayment, many individuals with student loans feel overwhelmed and believe they have few, if any, options to tackle their student loan debts.
CCCS Buffalo designed its program – the only one in our area – to aid debt-heavy borrowers.
Evaluate student loan debt; explore options for student loans, including deferments, forbearances, alternative repayment plans and consolidation loans; assist in applying for the appropriate option; assist in communicating with the lender, as needed, and review credit score, credit report and living expenses.
Many people will find relief through student loan counseling programs. It is time for the government to do its part, and fund student loan counseling.
Paul Atkinson is CEO and president of Consumer Credit Counseling Service of Buffalo.