Is it possible that students have no idea how much they are borrowing for college?

The answer is yes, according to a new report by the Brookings Institution. In nationally representative data on student loans, more than half of freshmen who had taken out college loans, significantly underestimated what they had borrowed. Less than one in three freshmen borrowers estimated their debt within a reasonable margin of error.

The researchers didn’t find any connection between a family’s ability to pay and the accuracy of a student’s debt estimates. Interestingly enough, students from affluent families were less likely to know about the debt for which they were responsible.

The researchers speculated that higher-income parents may have arranged the loans without input from their children. In some cases, the lack of knowledge about cost and debt may stem from parents proactively managing their children’s decisions about education.

This scenario, the report suggested, “may not seem particularly problematic at first blush, but one could imagine a number of bad outcomes resulting, such as the student feeling surprised, or even victimized, by their debt.”

With so many students unaware of what they borrowed – or even that they have any college debt – it’s no wonder that the student-loan default rate is so high. According to a 2014 Federal Reserve report, nearly one in three borrowers in repayment were at least 90 days late with a payment.

Keeping Track of Student Loans

After leaving or graduating from college, borrowers have six months to begin repaying their federal loans. That means that 2014 grads should now be starting to pay down their debt. Their first step should be to identify their outstanding loans.

Keeping track of college loans can be challenging. Students could have 16 federal loans (a subsidized and unsubsidized loan for every semester) or more after graduating from college.

Students don’t have to guess how much debt they have. It’s easy for individuals to get information on all their federal loans by visiting the National Student Loan Data System, which is a federal website.

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