Parsing through student loan details is no simple task. Language from servicers can be difficult to understand. Borrowers face complex choices within the fine print and mistakes can happen.
According to the State Council of Higher Education for Virginia (SCHEV) debt profile, 62% of four-year bachelor’s degree recipients in 2017-18 (33,985 students) were borrowers. Their median known debt at graduation was $26,720.
As graduates work through repayment, Student Loan Advocate Scott Kemp is a necessary bridge between Virginia borrowers and servicers. We applaud the General Assembly and Gov. Ralph Northam for legislation last year directing SCHEV to create the Office of the Qualified Education Loan Ombudsman. The state now has an avenue for people to seek help and stay on track with their loans.
“That’s what we’re trying to do,” Kemp said. “Most of those who are calling are in some level of distress.”
Since opening in January, Kemp’s office has handled more than 100 cases. Some involve recent college graduates with questions about repayment plan options based on the job they’re seeking. Others are borrowers in their 60s, close to retirement, facing issues with the Public Service Loan Forgiveness Program — an option for employees in some government and nonprofit jobs.
No matter where borrowers are with their loan and what questions they might have, Kemp is a key liaison with the servicer, cutting through the impact of “going into forbearance,” the pitfalls of “capitalized interest” and more.
Nearly one year in, Kemp hopes to advance knowledge on the front end of the student loan process. This week, he’ll travel around the state to connect with K-12 educators, guidance counselors and other messengers, sharing strategies for schools and applicants to be proactive.
In December, Kemp will deliver a report to the General Assembly, identifying areas where lawmakers can help borrowers. The office also will roll out an online self-help course, with video guides on key topics.
Efforts to understand student loans also need to start before college. Kemp is working with the Virginia Department of Education on improving high school economics and personal finance courses to include standards of learning for how to finance higher education and student loans.
“That’s our goal — to help students be wise consumers and use student loans as an effective tool moving forward,” Kemp said.
Loans should be a doorway to a college education, not a padlock on a healthy financial future. We’re glad to see the commonwealth doing its part to keep an open door.
— Chris Gentilviso