By Marc Filippino
Finding a way for student loan borrowers to avoid crushing debt is an uphill battle, but the country’s top student loan watchdog told attendees at a recent symposium that many student-borrowers’ troubles are hard to trace because of a lack of available data.
Speaking at Suffolk Law School’s recent Research Symposium on Student Loans, Rohit Chopra of the U.S. Consumer Financial Protection Bureau said those suffering from a defaulted student loan don’t just incur a personal loss; their burden can be a part of a larger macro-economic problem.
“A society with higher education has more positive societal spillover affects,” Chopra said on April 11, 2014. “But student loan defaults might be acting as an opposing force, possibly making individuals worse off and exacting broader social costs.”
Chopra spoke on the first day of the two-day symposium gathering the nation’s top student loan experts, including academics, attorneys, industry representatives, consumer advocates and government officials. Sen. Elizabeth Warren spoke on the second day.
To start addressing the problem, Chopra said the country must do a better job at collecting data about student borrowers. In many cases it is unclear how much a servicer is really doing to help a borrower get out of debt.
“There is so much more we need to learn about who is defaulting and why they are defaulting. We need to know that when people are calling about ways to avoid default, we have confidence the servicer is not giving them incorrect information,” Chopra said.
While much of the broader effects are still being calculated, Chopra said the immediate economic impacts on a borrower’s future are tremendously detrimental.
“Borrowers with ruined credit earlier in their adult lives find it tougher to pass employment verification checks, find it tougher to find a landlord to rent an apartment and are humiliated to learn from their employer that their wages will be garnished,” Chopra said.
The symposium was organized jointly by Suffolk Law School and the National Consumer Law Center.