Iowa community college students face high loans, defaults

While the report, A Closer Look at the Trillion: Borrowing, Repayment and Default at Iowa’s Community Colleges, uses data from 16 community colleges in Iowa, the results are applicable to all two-year colleges, officials said. But that could change: the Obama administration has recently made free community college a key part of its education agenda, proposing a national program and pushing states to adopt their own initiatives. Still, that default status is something that can screw up a student’s credit for the rest of their life.

“The Loan Repayment Promise demonstrates our belief in the value of a Newberry College education and our commitment to helping students pursue the career or vocation of their dreams”, president Maurice Scherrens said.

Incoming freshmen and transfer students with at least two academic years remaining until graduation are automatically enrolled in the program at no additional cost.

The study found that many community college defaulters fail to take action on their debt when they can’t make payments.

More than a third of Iowan community college students took out less than $10,000 in student loans, but the cohort that was most likely to default were those that took out less than $5,000.

Northeast Iowa Community College administrators have worked to reverse the nationwide trend of increasing student loan debt.

One in seven Americans with student loans says they’re delaying tying the knot because of the crushing burden of student debt, according to a recent survey conducted by Student Loan Hero and the research firm YouGov.

“We knew that when this data came out, there would be a lot of questions like, ‘Why haven’t you tended to that before?’ ” said Laurie Wolf, a report contributor and executive dean for student services at Des Moines Area Community College. Almost half of all undergraduates attend community college.

The Newberry College Loan Repayment Promise offers a powerful safety net to students and their families by promising to help repay their education loans.

“If I borrowed $1,000, none of the programs work for me”, said Jee Hang Lee, the vice president of public policy at the Association of Community College Trustees, a trade group. “They thought it was paid for and they missed that last payment and why the servicers aren’t working with them on that, we’re a little perplexed about that”.

Wolf also calls on the agencies that manage and collect student debt do a better job informing students where they stand.

The level of repayment assistance is determined by the graduate’s income.