Durbin Bill Would Require All Colleges to Provide Financial Aid Counseling

Elgin Community College’s efforts to limit the debt load of its students won praise Friday from U.S. Sen. Dick Durbin, who said the college district already has a six-year head start on a bill he introduced aimed at curbing the devastating impact student loans can have.

Durbin has decried the nation’s mounting debt for student loans, which has grown to $1 trillion and has seen the greatest acceleration among those attending for-profit schools.

Durbin said young, inexperienced adults are being exploited, pressed into making student loan decisions that will affect them for much of their lives. Consequently, they graduate with student loan debt that can be far beyond their means to pay off in a timely manner, Durbin said. Part of the problem is that student loan debt cannot be forgiven, he said.

“They do not understand … that this is not an ordinary debt,” he said. “This is a debt that cannot be discharged in a bankruptcy. What this means is that you can carry this debt to the grave.”

Durbin's bill, the “Know Before You Owe Act of 2012,” will require all colleges and universities to provide intense financial aid counseling for students, including the importance of finding scholarships and such thing as Pell grants, before they begin borrowing money, especially from private institutions.

He introduced the bill last March with fellow Democrat Sen. Tom Harkin of Iowa.

But Elgin Community College District 509 is ahead of the game on this issue, which is the reason Durbin stopped in Elgin.

The senator met in a reading room at the college’s Building C, which houses the library. He talked with ECC President Dr. David Sam; ECC Trustee David Getz; Kim Wagner, the managing director of student financial services; Amy Perin, the director of financial aid and scholarships; and student Bryan Lentz, who credited ECC’s financial aid counseling with getting him through the college with no debt. He is preparing to attend Judson University in Elgin to further his education, and expects to enroll there while accumulating minimal debt.

Wagner and Perin explained to Durbin that about six years ago, the college began a reorganization of its financial services and financial aid programs to better align them with the idea of student service.

The idea was to help the students understand the financial aid process and what it means, including the need to search for scholarships and apply for Pell and similar grants before borrowing money. That grew to what the college introduced in fall 2011 when it mandated one-on-one financial aid counseling for all students who are considering loans to pay their tuition.

That made ECC the state’s only college to impose that requirement, which ECC credits for a 13 percent reduction in the amount of money students have borrowed.

“Little did I know that my (Know Before You Owe) idea was too late for Elgin Community College,” said Durbin, praising the efforts of ECC for improving student financial services.

In the past six years, the college also has watched its uncollected tuition drop from $1 million to just $280,000, Perin and Wagner told Durbin, adding much of the credit for that decline is directly attributable to the increased focus on financial aid.

If Durbin had any doubts about the effectiveness of ECC’s efforts, they likely were dispelled when Lentz spoke.

Durbin noted that 64.5 percent of freshmen at two-year colleges have financial problems that will interfere with their schoolwork.

Horror Stories

Durbin said he has heard from people who, before they had completed their education, who already had accumulated $90,000 in student loan debt, and had yet to begin graduate school. Some end up living in their parents basements at age 30 as they start out on careers that will help them repay those loans over the course of decades.

The effects can be devastating. Durbin said he heard from one young married couple who are so beset by student loan debt that they have decided not to have children. In other instances, the effects reach out to touch parents and event grandparents. He said he is aware of some who are having a portion of their Social Security checks garnished because they had signed on to back a loan on which a grandchild had defaulted.

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