Those who have taken out or are applying for student loans to pay for college may soon have some help deciphering how they work and how to repay them.
A new bill introduced Thursday would appoint a state student loan ombudsman to handle any complaints and better educate the community about repayment programs available.
It's a topic that's garnered national headlines and worked its way into the 2016 presidential election, with both Republicans and Democrats proposing different solutions to either address the upfront cost of a college education, or ways to help make it easier to pay off.
Delaware currently ranks first among states with the highest average student debt, averaging nearly $34,000 per graduate, with the Federal Reserve pegging outstanding debt nationwide at $1.34 trillion.
Rep. David Bentz (D-Christiana), who’s sponsoring the bill, says many applying for loans don’t fully comprehend what that burden might mean after they graduate – or how best to manage them when they begin to pay them back.
“I think that kids are taking out these loans because they understand it’s something they have to do to go to college and they obviously understand the value of college, but they’re not I guess informed consumers at the time they’re taking out the loans and then that’s hopefully what we can try to fix,” Bentz said.
The ombudsman would also create a course explaining loan terms, repayment options and loan forgiveness programs available.
Bentz says that course or any print or video materials wouldn’t be mandatory parts of the public school curriculum, but he hopes the ombudsman and schools can find ways to integrate it in the classroom.
“The schools are the ground level where these kids are starting to make decisions about college. That’s when we need to get to them and I’m hoping [the ombudsman] can develop a partnership with the schools to make it work the way that’s going to work best for the schools.”
The bill coincides with the Obama Administration’s push to enroll two million more people in income-based repayment plans, their launching of an educational website and efforts to boost consumer protection programs against predatory lending.
The ombudsman would exist under the Office of the State Bank Commissioner. It's unclear whether it would be a new state-funded position, or if lawmakers would have to find money to pay for the job should the bill pass.
