About Student Loan Repayment

Panelists agreed that more research on student loan repayment is necessary and pointed to default as one of the areas about which the least is known. Although the federal government holds an enormous amount of data about student loan performance, much of it is not publicly available, limiting understanding of repayment challenges as well as policy solutions that could help.

Servicing was also cited as an area in need of further study. “We don’t have the data that we need to understand what role servicers can play” in improving repayment success, said Julie Margetta Morgan of the Roosevelt Institute. A major related challenge is connecting with borrowers themselves, and Scott Miller of the Pennsylvania Higher Education Assistance Agency called for more research examining how to improve borrower-servicer communication.

  • Automation. Discussions throughout the day highlighted opportunities to streamline or automate administrative processes, such as the annual income recertification process for borrowers enrolled in income-driven plans. Looney said, however, that it will probably be difficult to automate many aspects of the borrower-servicer relationship and that phone conversations will remain a critical element of the system for a long time.
  • Outreach. Speakers underscored the importance of early outreach targeted toward the borrowers who are most at risk for delinquency or default. Miller noted the need to better understand the pathways that borrowers take through repayment; the timing of possible missed payments or use of tools to suspend payments, such as deferment or forbearance; and the additional resources that are needed to support those who are likely to struggle.
  • Simplification. Several panelists noted that having many repayment plans to choose from can create confusion, especially around eligibility. Darcus cautioned that if policymakers reduce the number of plans available, they must also make sure that borrowers still get the help they need.
  • Evaluation. Several speakers also mentioned a need to rethink the consequences that are imposed as a result of student loan default. These include wage and Social Security garnishment, damage to the borrower’s credit, and ineligibility for additional student aid and federal programs, such as those that help with homeownership, all of which can create additional barriers for borrowers trying to access sustainable long-term repayment options.

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