Salem, Ore. - Oregon student loan borrowers are grappling with confusion adn anxiety as recent federal changes upend repayment options, leaving many unsure how to navigate the evolving system. The uncertainty comes as payments resumed in October after a three-year pause, and as several income-driven repayment plans face a sunset clause in three years.The shifting landscape is prompting borrowers to seek guidance, with many fearing aggressive collection tactics like wage garnishment. Lane Thompson, Oregon’s first student loan ombudsman – a newly created position tasked with supporting borrowers and overseeing loan servicers - encourages proactive engagement. “I always recommend that people face the dragon, as it were, and see what might be possible for them right now,” Thompson said.Taking no action, however, is detrimental, experts warn. Thompson, while unable to provide individual financial advice, directs borrowers to nonprofit organizations and government agencies offering financial counseling, such as those certified by the U.S. Department of housing and Urban Advancement. These counselors can help borrowers develop a plan to eliminate student loan debt.
“Pick a plan and stay with it,” Thompson advised. “Get on an income-driven repayment plan and work towards forgiveness or pay down your loans as quickly as you can.”
The instability of the system is a key concern for borrowers like Sarah Setti, who expressed frustration with the unpredictability. “It’s hard to know how your life is going to be two months, two years, 20 years from now,” Setti said. “I think a lot of the repayment options are based on this idea that we certainly know what the future is going to look like.”
Setti plans to apply for the Pay As You Earn program, acknowledging her obligation to repay but worried about making the right choice given the program’s impending expiration. Thompson acknowledged this worry is common,attributing it to a broader societal stigma surrounding money.
“The reason we have so much anxiety about our loans is related to a stigma around money,” Thompson said.”We need to talk to each other about our debt. We need to use our resources and face it head-on.We can do that together.”
Thompson’s role was established by the Oregon Division of Financial Regulation to provide support and oversight as borrowers navigate the complex world of student loan repayment.
