At last year’s annual Federal Student Aid Training Conference, Secretary Betsy DeVos highlighted the nation’s growing federal student loan debt of $1.5 trillion, and the impact to borrowers and taxpayers. In her remarks, the Secretary indicated student loan debt demands the attention of everyone including the Congress, taxpayers, colleges and universities, parents, and students.
The U.S. Department of Education (ED) has taken steps to address the increasing student loan debt, including recently publishing recommendations for issuing financial aid offer letters to students and families. Additionally, ED is working to modernize the user experience through our Next Gen FSA efforts which include the release of personalized tools for student borrowing and financial decisions later this fall.
We are also collaborating with other federal agencies and schools to improve financial literacy for students and families by empowering them with tools and resources to make informed financial decisions on paying for college. This includes ED’s work with the Financial Literacy and Education Commission (FLEC), which recently released a report: Best Practices for Financial Literacy and Education at Institutions of Higher Education. This report provides recommendations for schools to teach financial literacy skills and provide useful information to assist students making decisions related to student borrowing.
The report provides general best practices for financial education programs. Specifically, the report makes recommendations in the following areas:
Providing clear, timely and customized information to inform student borrowing;
Effectively engaging students in financial literacy and education;
Targeting different student populations by use of national, institutional and individual data;
Communicating the importance of graduation and major on repayment of student loans; and
Preparing students to meet financial obligations upon graduation.
We hope this information is valuable to those serving at colleges and universities and others seeking to help students access information about paying for college. Please share this report with colleagues who may be interested.
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