Bill Overview
Title: Student Loan Literacy Act of 2022
Description: This bill provides funding for and establishes a grant program for community-based nonprofit student loan consumer assistance programs. Specifically, the bill directs the Department of Education (ED) to award grants to states for establishing, expanding, or providing support for community-based nonprofit student loan consumer assistance programs. These programs must provide assistance to borrowers of federal student loans, including by educating borrowers about their rights and responsibilities with respect to federal student loans. ED must (1) make publicly available through its website a list of programs receiving grant funds; and (2) ensure that each holder, servicer, and collector of federal student loans provides at least one federal student loan liaison to communicate with such assistance programs on various issues, including the handling of borrower complaints.
Sponsors: Rep. Jeffries, Hakeem S. [D-NY-8]
Target Audience
Population: Borrowers of federal student loans
Estimated Size: 38400000
- The bill specifically targets borrowers of federal student loans, aiming to educate them on their rights and responsibilities.
- Federal student loan borrowers include current students, recent graduates, and those who have not yet fully repaid their loan.
- The legislation will directly influence community-based programs to provide consumer assistance, affecting communities with such programs.
- Individuals who have engaged in community-based nonprofit programs could benefit from the expanded assistance offered by this bill.
Reasoning
- The target population for this policy is primarily federal student loan borrowers, which includes a vast number of individuals across various sectors of education and early career stages.
- The impact of this policy will vary considerably depending on the individual's proximity and engagement with community-based nonprofit programs.
- Community-based programs may improve federal student loan negotiation, management, and complaint resolution processes for those who are part of these programs.
- The policy is still limited by funding, meaning regional availability and robustness of these programs could vary, leading to differing degrees of impact.
- The broad aim of increasing financial literacy among federal loan recipients is likely to increase overall long-term wellbeing.
Simulated Interviews
Graduate Student (Austin, TX)
Age: 24 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I think more information is definitely needed, especially about repayment options and what happens if I can't make payments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Public School Teacher (New York, NY)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- It's hard to keep up with all the loan communication. Having someone to talk to will help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Nurse (Rural Iowa)
Age: 40 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- I'm skeptical if this will reach rural areas where information isn't readily accessible.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
Freelance Graphic Designer (San Francisco, CA)
Age: 35 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- This could have been helpful when I was repaying loans, but I'm glad future students may get help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Undergraduate Student (Boston, MA)
Age: 22 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 18/20
Statement of Opinion:
- Navigating loans is confusing, so this program could really help once it's set up.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Marketing Assistant (Cleveland, OH)
Age: 27 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 4.0 years
Commonness: 14/20
Statement of Opinion:
- If this program can help me better manage payments, it might help me sleep at night.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Construction Manager (Chicago, IL)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- It would be beneficial for my children, but it feels a bit late for me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Stay-at-home parent (Phoenix, AZ)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- If this program is easy to access, it could help me finally get a grip on my loan situation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Entrepreneur (Miami, FL)
Age: 33 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 13/20
Statement of Opinion:
- Financial literacy around loans is crucial; this could prevent many from financial pitfalls.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Barista and Student (Seattle, WA)
Age: 21 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 16/20
Statement of Opinion:
- I have no clue about loan repayments or options, so this would help me plan better.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $45000000 (Low: $36000000, High: $54000000)
Year 3: $40000000 (Low: $32000000, High: $48000000)
Year 5: $38000000 (Low: $30000000, High: $46000000)
Year 10: $36000000 (Low: $28000000, High: $44000000)
Year 100: $30000000 (Low: $24000000, High: $36000000)
Key Considerations
- The need for detailed tracking of program effectiveness and borrower outcomes.
- Potential variations in program cost due to differing state requirements and economic conditions.
- Programs may require targeted outreach to effectively serve economically disadvantaged communities.
- Ensuring compliance with new program guidelines by loan servicers and lenders.