Survey finds IDR plans are essential for new grads and low-income households today, while long-term use of the plans is uncer...
November 24 2015 - 10:41AM
One-third of federal student loan borrowers taking advantage of
programs that tie monthly payments to their salaries aren’t sure
how long they will remain in the plans, while another one-third
expect to stay in the plans until their loans are paid off,
according to a survey of 12,500 Navient-serviced borrowers released
today.
A smaller share of borrowers (19%) expect to use an
income-driven repayment plan for five years or less. Overall, more
than half say they expect to make higher payments later as their
income increases, according to the Navient study.
“IDR plans serve as effective options for federal student loan
borrowers who need increased financial flexibility as they
establish a career or undergo a transition,” said Jeff Whorley,
group president, asset management and servicing, Navient. “Navient
works to identify struggling borrowers and provide them with extra
support to enable them to choose the right repayment path for their
economic situation.”
Other findings of the survey include:
- 49 percent of IDR borrowers earn $35,000 or less annually; with
an even higher percentage (57%) of borrowers who are new to the
plans falling into this low-income category.
- 76 percent hold a bachelor’s degree or higher, while more than
40 percent of borrowers obtained a master’s or other advanced
degree.
- More than one-third expects to receive some form of
forgiveness.
- Nearly nine out of 10 are employed.
- The Department of Education and loan servicers are the most
frequently cited source of plan information.
- The majority of surveyed borrowers believe they can access and
understand information about the programs easily. However, more
than half of borrowers suggested that numerous repayment plan types
can be confusing.
Nine out of 10 survey respondents said that it was “very
important” to have an income-driven repayment plan available. Well
over one-third of borrowers enrolled qualify for a zero
payment. Of those who are required to make a payment, 90
percent are current, which, among other factors, has helped drive
down student loan delinquency.
Navient promotes awareness of these plans through a series
of communications starting while in school, throughout the grace
period after graduation, and then during active repayment.
The schedule includes custom outreach to borrowers who’ve missed
payments and those approaching their annual recertification date.
In 2014, Navient launched a dedicated call center team to handle
calls from borrowers approaching their renewal date.
Approximately one in five Department of Education borrowers
serviced by Navient and one-third of dollar balances are enrolled
in IDR plans, according to the Federal Student Aid Data Center.
The study is available at navient.com/facts.
About Navient
As the nation's leading loan management, servicing and asset
recovery company, Navient (Nasdaq:NAVI) helps customers navigate
the path to financial success. Servicing more than $300 billion in
student loans, the company supports the educational and economic
achievements of more than 12 million Americans. A growing number of
public and private sector government clients rely on Navient for
proven solutions to meet their financial goals. Learn more at
navient.com.
Contact:
Media: Nikki Lavoie, 302-283-4057, nikki.lavoie@navient.com
Customers: 888-272-5543
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