Average cost of an in-state Virginia school: $11,142.
Number of Virginians currently borrowing federal Direct or FFEL loans: 1,058,000.
Total outstanding balance of those loans: $30,118,363,000.
Cost of higher education: Priceless?
For many students and their families, the intimidating price tag on a college degree is amplified by a limited understanding of the federal loan and repayment process. Hence, why President Barack Obama recently introduced a “Student Aid Bill of Rights.”
On March 10, Obama signed a Presidential Memorandum intended to help the 41 million recipients of federal financial aid better afford, understand and handle a totaled $1,140 billion in outstanding federal loan payments.
“Yesterday, I took new action to make it easier for students to pay for college and pay off their loans through an executive action that streamlines and improves the way the federal government interacts with students when it comes to student loans,” Obama said last Wednesday on a conference call with 50 student reporters from across the country.
The president’s bill of rights states that every student deserves access to quality, affordable education, the proper resources to pay for college, the right to an affordable repayment plan, quality customer service, reliable information and fair treatment regardless of their ability to repay loans.
Nationwide, more than 70 percent of students graduate from a public or non-profit college with their bachelor’s degree owing an average of $28,400, according to information from the White House press secretary.
At VCU, that number is slightly below par.
Data from the National Center for Education Statistics states that 53 percent of all VCU undergraduates received federal student loans averaging $7,306 per student in 2012-13. Hold those figures constant for four years and more than half the VCU student body will graduate owing more than $29,000 to the federal government when they walk across the stage.
“A college degree is the surest ticket into that middle class, and in the global economy today, it’s the key to getting a good job, a good income,” Obama said on Wednesday. “The problem is it’s never been more expensive.”
In the last six years, the amount of outstanding payments on federal financial aid has nearly doubled, according to the National Student Loan Data System.
In 2009, 32.1 million financial aid recipients owed a total of $657 billion to the federal government. By the first quarter of 2015, there are now 41.1 million Americans who owe $1,140.1 billion.
“There’s no silver bullet,” Obama said. “We’re going to have to do things at the federal level, state level, at the university level to really mobilize the entire country around this issue of college affordability.”
Obama’s “Student Aid Bill of Rights,” is just his latest measure to combat the ballooning debt associated with higher education.
Five years ago this month, Obama signed student loan reform into law, and has since also increased the maximum Pell Grant by $1,000, simplified the FAFSA, capped student loan repayments at 10 percent of the borrower’s current income and established the American Opportunity Tax Credit worth up to $10,000 across four years of college.
Two months ago, the president announced his appeal to Congress to put through a plan making community college free for two years.
Now, his latest measure aims to make the federal loan repayment process more transparent.
Secretary of Education Arne Duncan will launch a web platform by July 1, 2016 that allows borrowers a straightforward mechanism to file complaints and provide feedback on loan lenders, servicers, collections agencies and institutions of higher education.
“We’re raising the bar for debt collection,” Duncan said on the conference call. “(We) need to make sure these charges to borrowers are reasonable and collectors are fair, transparent and help students get back on track when they need help.”
The plan also calls for help from the White House Office of Science and Technology Policy to find the most effective ways to communicate with borrowers, and working with the Office of Management and Budget to monitor trends to improve loan servicing and implement responsible policy changes.
“We have to think about this as the continuum from cradle to career and do everything we can to give every young person a chance to have a world-class education, and we need political leaders across the spectrum to invest in education rather than walk away from it,” Duncan said.
Obama said he is urging students, families, advocates and legislators to sign on with his proposed bill of rights. For more information visit WhiteHouse.gov/CollegeOpportunity.