Bill would make IU student debt initiative a nationwide requirement
Editor's note: This story from The Bloomington Herald-Times is being published here as a courtesy for readers of IU in the News.By Michael Reschke
An Indiana University initiative to reduce student loan debt could soon be a nationwide requirement, if a bill introduced by U.S. Rep. Luke Messer, R-Ind., becomes law.House Resolution 1429, known as the Letter of Estimated Annual Debt for Students Act of 2017 or the LEADS Act, would require all institutions of higher education accepting federal aid to send annual letters to student loan borrowers estimating their total debt and future monthly payments. The bill is modeled after a debt letter IU started sending to its students in 2012. It was an immediate success, according to IU officials, who said student loan borrowing across all campuses decreased by more than 10 percent the following year.
Legislators took notice and the Indiana General Assembly passed a bill in 2015 creating similar requirements for colleges and universities in the state. Now, Messer, who represents Indiana's 6th Congressional District, wants that requirement to go national.
"We're unapologetically stealing the idea," he said.
Student loan debt has received increasing national attention in recent years. In 2014, the Brookings Institute released a study that found about half of all first-year students in the U.S. seriously underestimate how much student loan debt they have. Prior to the university's debt letter initiative, IU students fit that description.
"We had students we talked to about loan debt that had no idea how much they had taken out when they graduated," said James Kennedy, IU's associate vice president for university student services and systems.
Messer's bill aims to eliminate conversations like that.
With six co-sponsors in the House, including Indiana Republicans Susan Brooks, Larry Bucshon and Todd Rokita, as well as Indiana Democrat Andre Carson, Messer is hopeful the bill will get a committee hearing this year. That would be a step further than the last congressional bill inspired by IU's student debt letter.
U.S. Sen. Joe Donnelly, D-Ind., introduced a bill in 2015 that would have required the U.S. Department of Education to establish and maintain a list of best practices related to student borrowing. In that bill, known as the Empowering Student Borrowers Act, best practices included methods to ensure students have a clear sense of their total borrowing obligations, including monthly payments and repayment options.
“What IU has done makes perfect sense,” Donnelly said at the time.
The bill did not get a committee hearing.
Messer said it's hard to pass legislation, but he's talked to Virginia Foxx, chairwoman of the House Committee on Education and the Workforce and a Republican from North Carolina, about his bill.
"You can't just file a bill; you have to work it," he said. "We plan to actively push it in the House."