With 44 million Americans currently in student loan debt, equaling just over $1.4 trillion, paying all of that back can seem like a daunting and never-ending feat to accomplish. The U.S. Department of Education says nearly eight million borrowers haven’t made payments in 12 months, which have resulted in defaults on loans.
Although there is a way for former students to pay down loans at a reasonable rate, a recent Consumer Financial Protection Bureau (CFPB) analysis told a different story. According to CFPB’s student loan data, nine out of 10 people in the highest-risk borrowers category are not currently enrolled in the available federal affordable repayment plan. Through qualifying for this plan, people can get the option to pay back student loans based on their salaries.
CFPB’s data also showed half of those high-risk borrowers who aren’t enrolled in these plans re-default on their loans and 95 percent who are enrolled do not re-default. The bureau has made an official call for a restructuring of student loan programs to ensure long-term success of borrowers.
CFPB’s director, Richard Corday, commented on the bureau’s commitment to help students: “Too many struggling borrowers fall through the cracks in a broken, outdated student loan system. These people did everything that was asked of them to get back on their feet, only to end up deeper in debt. We will continue to work to make sure this industry provides borrowers with the kind of service they deserve.”
