Kansans Win Student Loan Settlement – But Does This Impact Enrollment?
A landmark settlement this year will see more than $10 million in debt relief returning to Kansas. Following more than two years of economic instability which has grossly underscored the burden of student debt loans in America, this settlement is a big win for Kansans. However, considering that the past two years have created unprecedented issues in the financial and educational sectors, many may be wondering if higher education is still worth it today.
The State of Student Loans
Student loans have long been a nationwide issue that was only exacerbated by the pandemic’s economic effect. Records from the Federal Reserve dating back a decade already show student loan debt at $905 billion. Fast forward to 2021, and this number has increased by over 91%. This puts current student debt at a record-breaking $1.73 trillion. According to Forbes’ list of student debt per state, Kansas has an average debt of $26,002. Of all graduate students, 60% have student debt, while another 8% have private student loans. This puts Kansas in 34th place in the ranking of debt per state as of 2021.
That said, the burden of student debt loans isn’t just on the shoulders of graduate students. Another recent survey of high school students from the Junior Achievement and Citizens shows that over 69% are somewhat or very concerned about the financial impact of COVID-19. Among these respondents, more than 25% of these high school students have ultimately chosen to delay their college pursuits due to issues with mounting loans and financial insecurities. Consequently, in 2021, enrollments were among the lowest recorded in recent history.
Relief, Suspensions, and More Enrollment
Thankfully, in 2022, the student loan landscape seems somewhat less bleak. As mentioned earlier, almost $10.3 million in student loan relief will be returned to 400 Kansans. This relief comes as part of a larger billion-dollar settlement between Navient and 39 attorney generals. Following claims that were filed as early as 2009, in which student loan borrowers were allegedly steered into more expensive long-term plans that led them to default on payments, Navient has agreed to resolve the matter.
On top of this, borrowers who did not loan under Sallie Mae can still expect some relief. In AskMoney’s report on student loan repayments, it’s stated that the federal government has chosen to delay the resumption of student loan repayments. Instead of resuming in September 2021, repayments have been put on hold until May 2022. This provides many graduates with more wiggle room, as the suspension also puts a pause on student loan interest.
Ultimately, the combination of forgiveness programs, repayment delays, and relief settlements seem to have inspired some optimism in Kansan students. After the massive dip in enrollments, more recent Kansan enrollment rates reveal a 1% increase. This new influx of students are enrolled at community and technical colleges, which could also signal a shift in workforce trends. Though overall numbers are still well below pre-pandemic numbers and fears of new student debt accumulation still loom, it does provide a sliver of hope that more people are betting on education again.
