The federal government created the student loan
crisis, is there a state solution for Student Loan Costs?
There is a wide variety in the fiscal health of the states, with the big ones, Connecticut, Illinois, and, last but not least, California not exactly in a position to commit to reimbursing residents for student loan costs, if they
While New York is the highest profile state to offer this type of program, the conference reports that at least 35 states have rules on the books whereby residents can get partial or full student loan reimbursement if they agree to live or work in certain regions. Borrowers can download a list of state-specific forgiveness programs.
(Alessandra Lanza on the u.s. news site)
Of course, this does nothing about the lending end of the problem, but multiple remedies are needed.
In other moves that will accomplish nothing:
In 2015, Connecticut became the first state to pass a borrower’s bill of rights. The bill established a student loan ombudsman in the Connecticut Department of Banking, as well as an educational financial literacy course for college students.
It also requires student loan servicers to be licensed by the state banking department and prohibits them from defrauding or misleading borrowers. Similar legislation has been filed in Massachusetts, Michigan, Washington and Rhode Island.
While having documented numerous student loan servicer errors on this blog, I am no fan of licensing, in any area.
Now, maybe if the states made their colleges put some skin in the game, where they would have to cover some or all of student loan defaults, that would have an impact.
Refinancing is already available, as far as reducing student loan costs through lower interest rates.
Banks can do this, is this something the states should really get into?
In addition to bills of rights, states are also stepping up to address student debt in new and creative ways. According to the National Conference of State Legislatures, California, Connecticut, Maine, Minnesota, North Dakota, Iowa and Rhode Island have all passed or drafted legislation that allows state residents to refinance their existing education debt at lower interest rates, often through state student loan authorities.
Meanwhile, the student loan crisis continues.
Last week, the NCES released the findings of the 2012 survey and confirmed what we already knew: Student loans and a weak economy have forced these 30-somethings to take jobs they otherwise would not. And yes, some of them had to move back home in order to make ends meet.