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: Sen. Gillibrand, Kirsten E. [D-NY]
Target Audience
Population: Federal student loan borrowers
Estimated Size: 45000000
- The bill focuses on borrowers of federal student loans, who are a distinct population subset among the broader community of students and former students.
- There are currently around 45 million borrowers with federal student loan debt in the United States.
- These borrowers come from various backgrounds, including recent graduates, parents, and mid-career professionals who used federal loans for their education.
- Programs under this bill are designed to assist these borrowers by educating them about their rights and responsibilities, and thus, strengthen their financial situation by potentially improving their loan repayment strategies.
Reasoning
- The target population for this policy includes approximately 45 million U.S. borrowers of federal student loans, a number that spans various demographics including age, career stages, and economic backgrounds.
- The budget limit of $50,000,000 for the first year means that the implementation reach might initially be limited, potentially focusing on high-need areas or groups.
- Over the long term, with $577,000,000 allocated over 10 years, it is likely that the policy impact will grow, reaching a broader audience as more programs are established and awareness increases.
- The policy's impact at an individual level varies depending on the borrower's existing knowledge of their loan rights, their current financial situation, and their engagement with the provided resources.
Simulated Interviews
Recent college graduate (California)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 16/20
Statement of Opinion:
- I think having more guidance on student loans would be really helpful.
- I'm worried about making mistakes with my repayment plan because I don't understand all the options.
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 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Public school teacher (Texas)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I don't have much time to look into student loan issues and honestly, it's overwhelming.
- If someone could explain the details and help optimize my loans, that would be great.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Corporate lawyer (New York)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I've managed my loans well, but anything that makes the information clearer is always welcome.
- Helping my child understand their loans early on is a great idea.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Nonprofit worker (Florida)
Age: 28 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- I feel trapped by my student loans, and I could use all the help I can get.
- More accessible support and information would alleviate a lot of stress.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Freelance graphic designer (Georgia)
Age: 37 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 12/20
Statement of Opinion:
- Managing all my loans on top of starting a business is a nightmare.
- Clearer advice on my federal loans could help me a lot with budgeting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Homemaker (Illinois)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I want to be financially responsible, but my loans are confusing at times.
- Having better support systems would be reassuring.
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 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Undergraduate student (Ohio)
Age: 21 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 18/20
Statement of Opinion:
- Understanding my loan terms and repayment options is very important to me.
- Having community support would help prepare me better for graduation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 6 |
Software developer (Washington)
Age: 34 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 1.0 years
Commonness: 7/20
Statement of Opinion:
- I'm doing fine with my loans, but any new information on repayment plans or refinancing is useful.
- I think this program could greatly benefit others who are struggling.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Nurse (Colorado)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 9/20
Statement of Opinion:
- Anything that helps me understand better options for reducing interest or strategically paying off my loans will be valuable.
- It's nice to know there's additional support available.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Bartender (Pennsylvania)
Age: 25 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- The support from such programs could help me find a way to better manage my repayments or deferment options.
- Understanding my rights as a borrower would relieve a lot of stress.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 5 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 6 | 3 |
| Year 20 | 6 | 3 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $55000000 (Low: $45000000, High: $65000000)
Year 3: $57000000 (Low: $47000000, High: $67000000)
Year 5: $59000000 (Low: $49000000, High: $69000000)
Year 10: $60000000 (Low: $50000000, High: $70000000)
Year 100: $70000000 (Low: $60000000, High: $80000000)
Key Considerations
- Long-term success of the program depends on the effectiveness of educational content and outreach strategies.
- Implementation and operational costs could vary significantly depending on the size and efficiency of the community-based programs.
- If successful in reducing default rates, the program could indirectly result in financial stability benefits that are meaningful but challenging to quantify.