One of the most depressing prospects the nation faces is rising student loan debt. Everywhere we hear about college graduates crippled by loan payments delaying marriage, children, home ownership, and other marks of adulthood.
“I have $50,000 in student loan debt and my B.A. is useless,” a 99-percenter declares.
“I’m unemployed. I’m disabled. I live with my mother. I have no income,” laments a guy named Nick in the documentary Default.
“You could throw hundred dollar bills down this bottomless hole for the rest of your life, and it’ll never fill up,” shrugs a disillusioned middle-aged woman named Mel.
More than an irksome monthly payment, student loan debt has come to represent ruined (or at least painful) lives. Widespread realization of this is perhaps the biggest takeaway of the Occupy movement so far. Another big takeaway is that students and graduates don’t know how to handle their own finances. They borrow naïvely, attend high-tuition universities, graduate with six figures of debt, and suddenly feel overwhelmed, paralyzed by their predicament. That’s why many of the Occupiers have come across as coddled children. They appear not to know how to deal with the consequences of their actions other than to try to protest the consequences away. Petitioning for student loan forgiveness and boycotting repayment are the best solutions they can come up with.
Out of the gloom and grumbling, however, some are finding ways to rebuild their lives through consistent repayment and hard work And a program called SALT is there to help.
Created by American Student Assistance (ASA, a nonprofit that provides information on “federal student loan solutions”), SALT works with colleges and universities as a consultant for borrowers. Students and graduates of colleges that hire SALT can benefit from financial education, workshops, personalized planning, email and text reminders for payments, and follow-up phone calls.
SALT has built its own social network, marketing itself using youth-appeal and positivity. On the pages of its colorful website are 20-somethings striking the muscle pose, smiling confidently. The theme continues in photos on its Facebook page, in which students goof off in photo booths, enter to win a free iPad, and are offered granola bars specially packaged with the SALT branding.
SALT, rather confusingly, doesn’t stand for anything. It’s not about going back to the mines to slog through debt, or being worth one’s weight, or rubbing salt in the wound. Rather, it’s meant as a term that stands on its own, and was chosen because salt was an early form of currency.
The program is marketed to colleges and universities looking to provide their students with regular financial guidance. Since it was launched in January 2012, SALT has had over sixty colleges and universities sign up for membership. Tufts University and Gordon College are among some of the more recognizable names, but most sound more like Five Branches University or Klamath Community College. The majority of SALT’s funding comes from schools paying for its services, but it also receives income from employers, nonprofits, foundations, and the government. It is free to students.
Allesandra Lanza, the corporate public relations manager for ASA, said the goal of SALT is “to teach students and alumni how to truly own their finances.” SALT, she said, seeks to start a new movement that promotes financial savviness and prevents delinquency and default. “We often hear students say ‘I don’t know how much I’m borrowing,’ or they don’t know the difference between private and federal loans. They’re making uninformed decisions. We want students to be able to pay for school and make smarter decisions,” she said.
Back in the 90s, Lanza said, ASA was a guarantor in the federal family student loan system, and it began to see big increases in student debt and loans, and borrowers who didn’t know how to take advantage of programs to help them. “We let them know what’s available,” she said.
SALT has several components. People can self-serve using the website, where they’ll find information, courses, and calculators. One-on-one personal counseling enables borrowers to work directly with individual experts on their loan repayments. There is also a proactive element for students who have borrowed but aren’t worried yet. “People dropping out of school usually don’t hear anything until they’ve already fallen off the cliff,” said Lanza.
ASA believes that borrowers can manage even seemingly impossible amounts of debt. “$200,000 of debt may seem hopeless but there are a lot of programs (at least for federal loans) like the Income-Based Repayment Plan, that can help make the debt a little more manageable,” Lanza said. She noted that what matters most is not how much someone borrows but how he manages it. “Defaulting on a $2,000 loan can ruin your credit – that gets lost a lot of the time.” Also, those who drop out are most likely to have problems and default, but they usually borrow less money than those who complete their degrees.
Students seem to appreciate the extra help. One SALTine at the University of Tampa, a junior named Kayla Gibson, said “I think it’s a great way to manage your credit score and within a few hours I was able to access it. I think it’s very user friendly and I’m bad with finances so I thought it’d be a way to make myself keep track of them.”
Will this kind of support stem the tide of overwhelming debt and default? It doesn’t seem to offer much for those who have non-federal loans, but for those who do, it may be a welcome reassurance that someone is there to talk out the next steps. Will it motivate borrowers to take on their debt with a sense of optimism? It just might help.
