Getting a higher education is one of the most important investments students can make for themselves, and it is best way to ensure a strong middle class. Since the start of the Obama Administration, the U.S. Department of Education has worked to make college more affordable and increase college success, including doubling investments in Pell grants and tax credits to help students and their families pay for college, releasing better information on debt and outcomes through the College Scorecard that helps students and families make strong college choices, and allowing borrowers to affordably manage their debt through repayment options like the President’s Pay As You Earn (PAYE) plan, which caps monthly payments at 10 percent of income.
For many students and families, federal Direct Loans are an important resource to help cover the costs of attending college. Accurate and timely loan information can help students make informed decisions about borrowing, and it also helps students understand their rights and responsibilities as borrowers, as well as their options for managing and affordably repaying their loans after college. Despite its importance, there is limited rigorous research on how to make loan counseling more effective, including which types of content and delivery methods are effective in helping students understand and manage their debt, as well as when—and how often—counseling should occur to have the greatest positive impact.
Today, the Department is launching a pilot to test rigorously the effectiveness of more flexible loan counseling policies on federal student loan borrowers. The experiment will allow colleges to require, as a condition of receiving Direct Loan funds, loan counseling to students beyond the statutorily required one-time entrance and one-time exit counseling. The experiment will test whether requiring additional loan counseling is effective in boosting academic outcomes and helping students manage their debt.
Read more at The U.S. Department of Education: http://www.ed.gov/news/press-releases/fact-sheet-department-education-announces-efforts-strengthen-loan-counseling-help-borrowers-manage-their-debt