Connecting the dots on a weekend and thinking about recent student loan news. Most standard personal finance courses spend way too little time on this issue of student loans and more broadly paying for college. Why? One major reason is the national standards have not emphasized this issue of college finance (see how many times you find “college” and “student loans” in this 52 page document).

So, what are the dots that I am connecting and why the imperative to include in your curriculum? 1) almost 50% of student loan borrowers are struggling; 2) the fastest growing segment of student loan market is over 60; 3) the largest student loan servicer is being sued for“systematically and illegally failing borrowers at every stage of repayment.” Kinda makes you wonder how much #3 contributes to #1 but I digress:

• Over half of recent college grads not paying down their student loans (Inside Ed): “It turns out that the changes in loan repayment rates are very large,” Robert Kelchen, an assistant professor of higher education at Seton Hall University, wrote on his blog. “Three-year repayment rates fell from 61 percent to 41 percent; five-year repayment rates fell from 61 percent to 47 percent; and seven-year repayment rates fell from 66 percent to 57 percent. These changes were quite similar across sectors.”

• More People Over 60 Struggling to Pay Off Student Loans, Report Finds (NPR.org)The number of people 60 and older with student loan debt has quadrupled in the past decade, and older Americans now represent the fastest-growing segment of the U.S. student loan market, according to a new report by the Consumer Financial Protection Bureau.

• Student Loan Collector Cheated Millions, Lawsuits Say (NY Times)
  Navient, the nation’s largest servicer of student loans, has for years misled borrowers and made serious mistakes at nearly every step of the collections process, illegally driving up loan repayment costs for millions of borrowers, according to lawsuits filed on Wednesday by a federal regulator and two state attorneys general.
  • The NY Times followed up with an article about how individual borrowers can protect themselves in Six Tips For Avoiding the Worst Student Loan Repayment Traps. NGPF contributed several ideas in the article.

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The good news is that we have an extensive set of resources to develop your student’s knowledge and hone their decision-making skills. Here’s a sampling:

• Paying for College Unit with five lessons
• Case Study: What College Should I Attend?
• Fine Print: Breaking Down Your Financial Aid Package
• Interactive: How Much Will Your College Actually Cost?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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