STUDENT DEBT MANAGEMENT

Anthony Garafalo
 THESIS

What were the steps taken to make college more affordable

and what is the best way to manage student debt effectively?
 1935- THE INDIANA
STUDENT FINANCIAL
A I D A S S O C I AT I O N I S
FORMED

• In 1935, the Indiana General

Assembly passed legislation
that mandated that fee
forgiveness awards be
awarded to students on the
basis of competitive testing.
The only way to keep it fair
was to have four of the state
universities agree to this
testing for these fee
forgiveness awards. The goal
of the ISFAA was to keep “ISFAA.” ISFAA, www.isfaa.org.
government out.
 1 9 6 5- T H E H I G H ER
E DUC ATI ON ACT
OF 1 9 6 5 I S PASSE D

• The Higher Education Act of

1965 was a legislative
document that was signed
into law on November 8,
1965, “to strengthen the
educational resources of
our colleges and universities
and to provide financial
assistance for students in
postsecondary and higher
education” (Pub. L. No. 89-
329).
 1992- GEORGE H.W. BUSH SIGNS
LEGISLATION REGARDING THE HIGHER
EDUC ATION ACT OF 1965

• In 1992, President George H.W. Bush signed

legislation that authorized more spending for
college student aid. It also made more students
eligible for grants and loans, and even created
financial-aid, teacher-training, and early-
intervention programs. The $115-billion measure
took effect Oct. 1. This reauthorized all programs
under the Higher Education Act for five more
years.
 1998- THE FIXED INTEREST RATE FOR
GOVERNMENT STUDENT LOANS HITS
AN ALL TIME HIGH

• The interest rate that was supposed to begin in 1998 was

postponed for 5 more years. Congress predicted the direct
loan program would make private lenders obsolete by
1998, but private loans accounted for over 60% of all
federal loans given. The interest rate change is declared
“untenable” for private lenders and delayed all the way
until 2003.
 2001- THE ECONOMIC GROWTH AND TAX
RELIEF RECONCILIATION ACT OF 2001 IS
PASSED

• The Economic Growth and Tax Relief Reconciliation Act of

2001 was an income tax cut that began on June 7, 2001.
The goal of the act was to cut taxes, allowing families to
spend more money. This was done in the hope that it
would end the 2001 recession by stimulating the economy.
This made all interest paid on student loans deductible, but
subject to dollar limits.
 2 0 0 7- T H E COL L EGE COST
R E DUCT ION AND ACCE SS
ACT I S PASSE D

• The College Cost Reduction And Access

Act is defined, “The College Cost
Reduction and Access Act was passed into
law in September 2007. Supported by the
Project on Student Debt, the new law
redirects taxpayer subsidies away from
student loan companies and toward
increased grant aid and improved benefits
for borrowers” (The College Cost
Reduction and Access Act, 2007).
PELL GRANT INCREASE- THE COLLEGE
COST REDUCTION AND ACCESS ACT

• A Pell Grant is, “money the government

provides for students who need it to pay for
college” (College Board, 1). With the Pell Grant
increase, students of lower income had to rely
on loans due to need of money. This increase
provided enough additional funding to increase
the maximum federal grant “from the then-
current level of $4,310 to $5,400 in 2012” (The
Access for College Access and Success, 1).
 INCOME BASED REPAYMENT- THE COLLEGE
COST REDUCTION AND ACCESS ACT

• The purpose of Income Based Repayment is, “to ensure

that students who invest in a college education do not
later find themselves unable to pursue public sector
careers, raise a family, save for retirement, or contribute to
their own children's college goals” (Income Based
Repayment, 1). This program assures past, present and
future students with federal loans that their payments will
be fair and manageable and will not extend indefinitely
(The Access for College Access and Success, 1).
 2016- PRESIDENT ELECT DONALD TRUMP
REVEALS A SINGLE STUDENT LOAN
REPAYMENT PLAN

• Donald trump offered his newest plans to address the

student debt crisis. He proposed an income-based cap on
student loan payments. He also described an ambitious
student loan forgiveness program. As he described his plans
to a rowdy group of college and even high school students,
called for “a single student loan repayment plan capped at
12.5% of a borrowers' income and suggested borrowers
would see their student debt forgiven after 15 years of
making full payments” (Diamond, 1).
 CONCLUSION

• As you can see throughout all of this legislation proposed

and the amount of student debt, not only in the United
States of America, but in the world is rising and rising and
it’s becoming a big problem. But, there have been some
steps to help correct this crisis. There has been lots of
legislation passed to help correct this. It’s even a huge
debate topic among significant political figures. While fixing
this crisis is definitely difficult, we can take steps to make
student loans not as difficult to deal with.
 Works Cited

Amadeo, Kimberly. “Why EGTRRA Failed.” The Balance, www.thebalance.com/economic-

growth-and-tax-relief-reconciliation-act-3305764.

Diamond, Jeremy. “Trump Details Student Loan Policies, but Doesn't Mention Cost.” CNN,

Cable News Network, 14 Oct. 2016, www.cnn.com/2016/10/13/politics/donald-trump-

student-debt-proposals/.

Gould, Suzanne. “President Lyndon B. Johnson Signs the Higher Education Act.” AAUW, 2015,

www.aauw.org/2015/11/12/higher-education-act/.

“Income Based Repayment .” The Institute For College Access and Success,

ticas.org/initiative/page/income-based-repayment.

“ISFAA.” ISFAA, www.isfaa.org.

Lodewyk, Nicky. “A Summary of ISFAA History.” Home, www.isfaa.org/a-summary-of-isfaa-

history.

McCants. “The Early History of the Higher Education Act of 1965.” Pell Institute , 2003,

www.pellinstitute.org/downloads/trio_clearinghouse-

The_Early_History_of_the_HEA_of_1965.pdf.

Pitsch, Mark. “Bush Clears H.E.A. Reauthorization; Law Increases Aid, Expands Eligibility.”

Education Week, 24 Feb. 2019,

www.edweek.org/ew/articles/1992/08/05/40hea.h11.html.

“President Bush Signs College Cost Reduction and Access Act .” The White House, 2007,

georgewbush-whitehouse.archives.gov/news/releases/2007/09/20070927-3.html.

SoFi. “A Visual Timeline of Student Loans: Where We've Been and Where We're Headed.”

SoFi, 9 Feb. 2017, www.sofi.com/blog/visual-timeline-student-loans/.