(Washington, D.C.) - Today, Senator Patty Murray (D-WA), the top Democrat on the Health, Education, Labor, and Pensions (HELP) Committee, released a report from the Government Accountability Office (GAO) that highlights the importance of borrower relief options for those struggling to pay down their student loans. The report found that participants in income-driven repayment plans are overwhelmingly low-income, and borrowers using these plans are much less likely to default. The report also makes clear that the U.S. Department of Education and its student loan servicers should expand outreach to borrowers about ways to lower their loan payments through plans based on their income.
“While some of my Republican colleagues have attacked these important debt relief options and targeted them for short-sighted budget cuts, this report shows that not only are these plans serving the individuals who need the most help, we should be expanding efforts to help borrowers who are struggling under the crushing burden of student debt," Murray said. “I am going to continue to fight for ways to bring down the high cost of college and reduce student debt, so more students have the chance to gain a foothold into the middle class through higher education and to help our economy grow from the middle out, not the top down."
In April 2013, Senators Murray and Harkin requested a GAO study on income-driven repayment and Public Service Loan Forgiveness participation and awareness as part of an ongoing effort to examine the impact of more than $1.3 trillion in outstanding federal student loan debt and the growing need to provide student loan borrowers with relief. At that time, budget documents showed that just 2 to 3 percent of students were enrolled in income-driven plans, such as Income-Based Repayment (IBR) and Pay as You Earn (PAYE), and there was a lack of data on the demographics of borrowers enrolled in these plans.
A full copy of the report, titled, “Federal Student Loans: Education Could Do More to Help Ensure Borrowers Are Aware of Repayment and Forgiveness Options," can be found here. Major takeaways of the report’s findings include:
