FORT WAYNE, Ind. (WANE) — For many Americans, student loans are their introduction to debt.
When looking at the numbers nationally, the United States reached up to $1.7 trillion in student loan debt at the end of 2020. Student debt is now the second highest consumer debt category in the the nation.
For the Hoosier state, the average borrower debt is $32,000 and the state’s total debt is $28.7 billion. To combat this Congressman Jim Banks (IN-03) partnered with congressional leaders Rep. Emmanuel Cleaver (MO-05), Sen. Tim Scott (R-SC) and Sen. Joe Manchin (D-WV) to reintroduce a bipartisan bill that will require the Department of Education to be more transparent when it comes to federal student loan terms, such as interest rates.
“Being the first in my family to go to college I had no idea what these forum were I was signing, they were complicated, these were decisions I made at 17 or 18-years-old and I had debt I paid for several years when I got out of college,” Rep. Banks said. “I went to Indiana University and I came out of college in college debt-but the debt back then is a drop in the bucket compared to the college debt today because of the rising cost of colleges. There is no greater inflation in America than the cost of a college degree.”
The goal of the bipartisan bill is to make it simpler and add clarity to federal student loan terms, such as interest rates and average monthly payments before a student agrees to to the loan. Banks stressed that as a Congressman, it is his job to provide oversight to the Department of Education.
“We already have terms of service on student loans that the Department of Education has you look at, but it’s like anything else, you’re talking about several pages long, thousands of words people don’t read it, just like they don’t read the terms of service when you turn on your iPhone,” said Rep. Banks. “Unfortunately bills like these don’t go anywhere in this Congress, it’s not a priority for those in charge.”
Rep. Banks told WANE 15’s Briana Brownlee that student debt is a common issue he hears from his constituents. He stressed that this is an impactful problem with a simple solution and higher education suppose to help people get a start in life not set them back.
WANE 15 went downtown to ask the community how they felt about their student loan process.
Jackie Skevington was a botany major and said her process for applying for student loans was stressful with so much paperwork. She believed that the terms of her student loan agreement was “pushed under the rug”. Her biggest dilemma was not knowing how to pay it forward, but knowing she needed a college education.
“You have this debt for the rest of your life,” Skevington said. ” Not getting the whole picture is kind of stressful because I don’t get paid a lot of money and I want to better myself for my future and my financial situation. It’s concerning because it’s debt and no one wants debt.”
When asked if the Department of Education should be more transparent about the interest rates on the loans, she replied that there should not be interest rates or student loans and higher education should be free.
Myron Yoder said he knew his interest rate before signing because he read all of his paperwork and “paid attention”. However, he added that student loans are “terrible” and 10-years later he still has them and wish he didn’t.
“If we could do online college and get rid of tuition and forget about the whole structure education and make it all online, I am a big fan of non-traditional education,” Yoder said. “I know a lot of people in those situations who put over a hundred grand in their education and haven’t seen a hundred thousand dollars of success.”
To read the full letter sent to Secretary of Education Miguel Cardona urging him to direct the U.S. Department of Education to disclose the material terms of Direct Loans to borrowers prior to disbursement, click here.