Implement Best Practices for Helping Students Understand, Manage Debt

"According to a December 2014 study by the Brookings Institution, 62 percent of student borrowers could not accurately estimate how much they owe," according to Enrollment Management Report. 

"Since students will have to pay the money back — or hurt your institution’s default rate if they don’t — that’s a problem for the individual students and for their colleges and universities. 

Understanding indebtedness is a shared partnership between the students and the institution, said Jesse O’Connell, assistant director for federal relations for the National Association of Student Financial Aid Administrators. 

NASFAA officials advocate for practices, policies and regulations that help students understand their obligations. For example, award letters should clearly delineate what part of the aid is in the form of grants and what part is loans, O’Connell said. Plus, students must complete exit counseling.

That’s not just a tedious requirement, O’Connell said. Financial aid officers can provide students with a deeper understanding of their student aid through ongoing communications, he said." 

See the full article for a list of the initiatives NASFAA supports to help educate students about debt.

NASFAA's “Headlines” section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 5/7/2015

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