A first-of-its-kind report out released today found most community college students leave school with debts of less than ten-thousand dollars. But it also finds those who borrow the least are the most likely to default.
The executive dean of student services at Des Moines Area Community College, Laurie Wolf, contributed to the report. She says there may be a simple reason why students default on loan debts as small as 500-dollars.
“They missed their last payment,” she says. “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.”
For Iowa community college students, the average amount of loan repayment is around 14-thousand dollars.
Wolf says there are a couple of things the federal government can do to help these students meet their obligations.
“One is allowing community college students do income-based repayment even if they have a low loan amount,” she says. “Also to allow the colleges the ability to tell a student the federal law allows them to take out the maximum amount doesn’t mean you need to take out the maximum amount.”
Wolf also calls on the agencies that manage and collect student debt do a better job informing students where they stand.