More than 43 million Americans owe a stunning $1.3 trillion in student loans, but one in 5 graduates are not familiar with the basic terms of their college debt.
Consumer Reports outlines the problem in a new overview: A lack of sufficient or effective student loan counseling by schools and the federal government.
Financial aid and college financing experts say the biggest problem is that the information sessions required by the federal government or schools are inadequate and need to be more personalized.
The U.S. Department of Education is taking steps to make student loan counseling broader and more effective. In 2012, it launched a financial awareness counseling tool to walk students through the basics, including managing debt and repayment options. It’s voluntary, but is prominently displayed on the same site as the entrance counseling.
In mid-July, the undersecretary of the Department of Education Ted Mitchell announced plans to launch a pilot program to let some colleges and universities require additional loan counseling beyond what’s already mandated by federal law.
Half of Americans with student loan debt say they didn’t attend any financial aid information sessions in high school before moving on to college, according to the Consumer Reports survey.
Read the ConsumerReports.org article.