Rep. Banks pushes DOE to make student loan terms transparent
FORT WAYNE, Indiana (WANE) – For many Americans, student loans are their introduction to debt.
Looking at the numbers nationwide, the United States reached up to $ 1.7 trillion in student loan debt by the end of 2020. Student debt is now the second largest debt category in the world. the highest consumption in the country.
For Hoosier State, the average borrower debt is $ 32,000 and the state’s total debt is $ 28.7 billion. To fight this congressman, Jim Banks (IN-03) partnered with Congressional leaders Rep. Emmanuel Cleaver (MO-05), Senator Tim Scott (R-SC) and Senator Joe Manchin (D -WV) to reintroduce a bipartisan bill that will require the Education Department to be more transparent about the terms of federal student loans, such as interest rates.
“Being the first in my family to go to college, I had no idea what these forums were that I was signing up to, they were complicated, these are decisions I made when I was 17 or 18 and I ‘had debts that I paid for several years when I graduated from college, “said Rep. Banks.” I went to Indiana University and graduated from college with a college debt, but the debt back then is a drop in the bucket compared to university debt today due to rising college costs.There is no greater inflation in America than the cost of a university degree.
The purpose of the bipartisan bill is to simplify matters and clarify the terms of federal student loans, such as interest rates and average monthly payments before a student accepts the loan. Banks stressed that as a member of Congress, it is his duty to oversee the Department of Education.
“We already have terms of service on student loans that the Department of Education had you review, but it’s like anything, you talk about several pages, thousands of words that people don’t read, just like they don’t read the terms of service when you turn on your iPhone, ”said Rep. Banks. “Unfortunately, bills like these are not going anywhere in this Congress, it is not a priority for officials.”
Representative Banks told Briana Brownlee of WANE 15 that student debt is a common issue he hears from his constituents. He stressed that this is a problem with impact with a simple solution and that higher education is about helping people get started in life, not slowing them down.
WANE 15 went downtown to ask the community what they thought about their student loan process.
Jackie Skeventon was a botany major and said her student loan application process was stressful with so much paperwork. She believed the terms of her student loan agreement had been “pushed under the rug”. Her biggest dilemma was not knowing how to pay up front, but knowing that she needed a college education.
“You have this debt for the rest of your life,” Skeventon said. “Not having the big picture is a little stressful because I’m not getting a lot of money and I want to improve for my future and my financial situation. It’s worrying because it’s debt and nobody wants debt.
When asked if the Department of Education should be more transparent about interest rates on loans, she replied that there should be no interest rates or student loans and that the higher education should be free.
Myron Yoder said he knew his interest rate before signing because he had read all of his papers and “was careful.” However, he added that student loans are “terrible” and 10 years later he still has them and wishes he hadn’t.
“If we could do college online and get rid of the tuition and forget about the whole structure of education and do everything online, I’m a big fan of non-traditional education,” Yoder said. “I know a lot of people in these situations who have invested over a hundred thousand dollars in their education and have not seen a hundred thousand dollars of success.”
To read the full letter sent to Education Secretary Miguel Cardona urging him to ask the US Department of Education to disclose the material terms of direct loans to borrowers prior to disbursement, click here.