A new white paper, released Tuesday by American Student Assistance (ASA), calls for better data on the number of students negatively impacted by student loan debt, including data on delinquency and repayment struggles.
The paper – “Missing Data: Focusing on the Wrong Factors Could Contribute to Student Loan Distress” – looked at current studies and data on student loan outcomes and found “a growing body of economic evidence that education debt is having a broad effect, beyond just the individual borrowers and extending into our whole economy,” ASA President and CEO Paul Combe said in a press release.
“This is not a problem of a few but an issue for all of us, yet we lack the necessary data to guide our policy choices,” added Combe, a co-author of the report.
According to ASA, an estimated 40 percent of borrowers eligible for repayment are actually making on-time payments, while the remaining 60 percent are past due at least 90 days or are postponing payment temporarily. However, current data from the Department of Education (ED) focuses only on borrowers who default within two to three years after entering repayment, which does not give an accurate picture of the much larger population of borrowers in repayment.
“If we ever want to get more loans in repayment and out of delinquency and default, the federal government needs to start reporting student loan repayments in way that reflects, not just whether they can avoid default, but how well borrowers are eliminating their debt,” the white paper’s authors wrote.
To that end, the authors make several recommendations to fill the gaps in our understanding of repayment data, including:
“In order to address [the] new reality of what debt is really doing to borrowers, we need data that help us better understand the debt and highlight the struggles of those who have repayment challenges but will never be counted in a default number,” the authors conclude. “Public and political pressure will continue to fall on default until a light can be shined on the larger problems that are being ignored.”
Publication Date: 4/18/2014