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College Affordability: Simplifying the Process for Ohio’s
Students
By U.S. Sen. Sherrod Brown
Last week, Ohio students started receiving their financial
aid packages, containing information about the grants,
scholarships, and loans available to them. The rising cost
of college tuition means that more students will have to
navigate the sometimes confusing process of applying for
student loans.
Many students end up graduating with costly student loans
that prevent them from making other investments like buying
homes, starting businesses, or going to graduate school.
Some of these costs could be avoided if students and their
families had clearer information about how the loan process
works.
Two-thirds of student loan borrowers don’t know the
difference between safer, affordable federal student loans
and private student loans, which carry more risk and have
higher interest rates. Private student loans often have
variable interest rates which can rise at any time and they
are ineligible for federal forgiveness, cancellation or
income-based repayment programs.
Despite these risks, most student borrowers don’t exhaust
their federal loan options before choosing to take out
private loans.
With the average debt for 2012 Ohio college graduates
totaling almost $30,000, students and their families deserve
to have clear information about their options when it comes
to paying for college. That’s why I cosponsored the Know
Before You Owe Act.
This legislation would require colleges to inform borrowers
of any available federal student aid before issuing
certification for a private loan and would require lenders
to clearly state the difference between students’ financial
assistance and their cost of attendance. Lenders would also
have to send loan statements to borrowers every three months
and submit an annual report regarding student loans to the
Consumer Financial Protection Bureau (CFPB). The information
that this act provides for students and their families will
help them to make informed decisions about paying for
college.
While preventing students from being indebted with costly
loans when more affordable options are available is
critical, we must also help graduates with existing private
student loan debt. Because private loans offer fewer payment
options than federal loans, many graduates find themselves
overwhelmed by their monthly payments. My Refinancing
Education Funding to Invest for the Future Act (REFI)
addresses this problem by authorizing the Treasury
Department to incentivize banks to refinance private student
loans. Lowering the interest rates on private student loans
would make students’ payments more affordable at no cost to
taxpayers.
Higher education creates economic opportunity for Ohio’s
students but student loan debt can create an unnecessary
burden that can follow them through adulthood.
By reducing their student loan debt through clear
information and lowered interest rates, we can ensure that
Ohio’s graduates have a fair shot at the future. |
