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New report suggests ways to ease applying for and dealing with loans

In the report, the National Association of Student Financial Aid Administrators made six suggestions to the U.S. Department of Education to streamline how loans are serviced and to reduce confusion among students.

The recommendations include developing a central loan portal where students can manage all of their loans and ensuring that consumer protections apply to all students taking out loans.

There is more than $1.2 trillion of student debt in the U.S. and, according to the report, much of that debt is unnecessarily difficult to manage.

Students fill out the Free Application for Federal Student Aid, commonly known as FAFSA, and College Scholarship Service Profile forms each year, and the University then offers the student a mix of federal and private loans as well as grants and scholarships to address the student’s need.

Kristin Anthony, assistant director of federal direct loan programs at UNC, said financial aid awards are then reported to the federal government, which records the loan and assigns further managing and servicing of that loan to one of several private companies.

“Right now, it’s sort of like an umbrella system,” Anthony said.

One of the report’s suggestions concerned notifications sent to students about their loans, saying that all financial aid correspondence should come directly from the Department of Education.

Due to the number of entities involved in taking out a loan, Anthony said it is common for students to not be able to follow the status of their loan.

And some students haven’t realized that loans offered to them one year are automatically offered again in subsequent years, Anthony said.

“I have had instances where students are concerned because they don’t believe they took the loan,” she said.

Still, UNC meets students’ financial needs in ways that minimize the need for loans. Of the $183 million of financial need among University students in the 2012-2013 school year, 72 percent was met with grants and scholarships, with only 28 percent being met through loans.

The default rate on student loans at UNC is also small: 2.3 percent.

Freshman Soumaya Lansari is a Carolina Covenant scholar, and she chose UNC in part because of its financial aid. She said that all of her financial needs were met by the University, but she has had some trouble navigating the financial aid application.

“The CSS was horrible, and the FAFSA, once you have your taxes in order it’s pretty simple, but the CSS is so detailed.”

state@dailytarheel.com

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