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.