BLOOMINGTON, Ind. (WISH) — Students at Indiana University will start moving into their dorms in Bloomington on Wednesday. As the school year gets started, Indiana University is working to keep students from drowning in student debt. Soon, other colleges will follow suit.
IU said it has managed to cut its student loan debt by 16 percent since it started its efforts to decrease debt in 2012. Students borrowed $44 million less this past year than they did during the 2012-2013 school year. IU’s biggest initiative has been its debt letter. Every year, IU sends a letter to students letting them know exactly how much they’re borrowing and how much they’ll have to pay back after graduation with interest. It even includes an estimated monthly payment.
Finanical Aid experts on campus told 24-Hours News 8 they were amazed to find students didn’t understand how much money they were really borrowing. When students realized how much debt they were racking up, they start cutting back and only borrowing what they really needed. Officials tell us debt awareness helps students make other decisions throughout college.
“When you start out and start taking out loans you know your accumulative amount, and how much the repayment is going to be — that should be used as a basis for planning, looking at what major you’re going to be in and what you’re going to do when you graduate from the university,” said James Kennedy,
IU also started a financial campaign, organizing one-on-one appointments for students to develop a plan for their finances in college. IU is also offering financial planning presentations and podcasts to students.
One of the biggest goals is to help students understand the real-life impact of their loans.
“I think it’s important that they don’t excessively borrow. That they borrow only what they need, not what necessarily what they’re offered. I think it’s really improtant for students to understand the amount of money they need to get through school and just take that amount, and then if they want to fund their lifestyle, work to fund that as well,” said Phil Schuman.
Soon, other Indiana colleges will be following IU’s lead. Governor Pence signed a bill into law this summer requiring public and private schools to formally tell students how much they’re borrowing and how much it will cost them in the long run. That goes into effect next school year.
Anyone can track their debt and calculate their estimated monthly payments by clicking here.