Student Debt Policy Roundtable: Building Solutions for North Carolina & the South

Student Debt Policy Roundtable: Building Solutions for North Carolina & the South

Summary Report | January 16, 2025

The MDC Student Debt Relief Coalition partnered with the Student Borrower Protection Center and the Center for Responsible Lending to host an exploratory policy discussion and educational opportunity for student debt stakeholders in North Carolina.

On January 16th, stakeholders gathered in Durham to discuss the student debt crisis and explore solutions for North Carolina residents. The conversation revealed both the scope of the challenge and promising pathways forward through collaborative action.

The Landscape in North Carolina

North Carolina faces a significant student debt crisis, with 1.4 million borrowers owing a total of $59.4 billion in outstanding loans -an average of $38,770 per person. While delinquency rates have dropped from 16.3% in 2020 to 1.4% in 2023, this improvement may be temporary due to expiring federal protections. North Carolina residents lack key safeguards afforded to their counterparts in in other states, such as a Student Borrowers’ Bill of Rights – a set of specific protections for individuals with student loans, ensuring they receive clear information, fair repayment options, and safeguards against abusive practices by loan servicers, and limitations on predatory collection tactics. The establishment of a Borrower’s Bill of Rights would prevent lawmakers from backing policies that raise the costs of student loans to taxpayers and limit access to loans that help to prepare our workforce. Despite available federal relief programs, many borrowers struggle to navigate the system effectively, highlighting the need for both improved policies and stronger support systems.

Moving Forward Together

The roundtable identified key partners for advancing these solutions, including local civic leaders, educational institutions, healthcare systems, racial justice organizations, and state officials. Success will require continued collaboration, regular communication, and a shared commitment to addressing both immediate needs and systemic challenges. MDC is committed to continued engagement and research into the student debt crisis and its potential solutions, at the local, organizational, institutional, state, and federal levels.

Themes from Stakeholder Discussions

Throughout the roundtable, several crucial themes emerged:

1. Equity Must Drive Solutions

Student debt disproportionately affects those who are often already economically vulnerable. The roundtable revealed how this crisis perpetuates wealth gaps through predatory practices targeting marginalized communities. Participants challenged the narrative of education as a universal equalizer, noting how the current system often reinforces inequities. They emphasized that solutions must focus on wealth-building strategies for communities of color, veterans, and first-generation students and go beyond access to financial education.

2. Local Action Creates Immediate Impact

While federal policy changes remain imperative, participants emphasized the power of state and local initiatives to create immediate change. Local efforts can begin to address systems challenges and create vital networks of support and understanding. These community-level initiatives, from free financial counseling to policy advocacy, help build both the capacity and confidence needed for broader efforts. By starting with accessible, tangible changes at the local level, communities can improve the borrower environment and develop the expertise and momentum needed for engagement with federal advocacy.

3. Support Systems Need Strengthening

Current support systems for borrowers are fragmented and often fail to reach beyond basic information sharing. The roundtable revealed that while educational resources are not enough – North Carolina needs a collective, institutional commitment to real solutions. Employers, for instance, rarely inquire deeply about how student debt affects their workforce or consider their role in solutions – despite their unique position to offer direct support through benefit programs or workplace financial counseling. Participants identified how healthcare systems, housing partners, and even chambers of commerce must begin to see themselves as essential actors in finding solutions.

4. Breaking Down Stigma

The roundtable surfaced how deeply stigma silences borrowers, making it harder to seek help and advocate for change. Many employers and organizations overlook student debt’s impact on their communities, while borrowers often struggle in isolation with their financial challenges. Participants emphasized the need to reframe the conversation – from individual responsibility to systemic solutions, fostering open dialogue about debt’s impact on career choices, mental health, and economic stability. This narrative shift is essential for building momentum toward broader policy changes.

Promising Directions

The roundtable discussions yielded several promising approaches for immediate action and systemic change in North Carolina:

1. Employer Engagement as Direct Support

Developing employer-based support programs emerged as a key opportunity. Beyond traditional Employee Assistance Programs (EAPs), participants identified possibilities for employers to provide direct debt relief benefits, facilitate Public Service Loan Forgiveness education and requirements, and create workplace-based financial counseling programs. Healthcare systems and nonprofits were identified as potential early adopters who could model these approaches.

2. Building Cross-Sector Coalitions

Success requires moving beyond traditional education and financial partners. The roundtable identified opportunities to engage housing partners, chambers of commerce, and racial justice organizations in creating comprehensive support networks. These partnerships could pilot innovative approaches like Maryland’s SmartBuy program, which connects student debt relief to first-time homeownership.

3. Strengthening Consumer Protection

A Student Borrowers’ Bill of Rights emerged as a crucial policy goal to ensure fair treatment of North Carolina’s 1.4 million borrowers. This approach would create protections through servicer licensing requirements, mandatory disclosure of repayment options, and clearer standards for borrower treatment. Such protections are particularly important for communities of color, who are often targeted by predatory practices.

4. Community-Based Education and Support

While information alone isn’t sufficient to lift the burden of student loan debt, participants identified opportunities to create more effective education and support programs by embedding them within trusted community institutions. This includes partnering with community colleges, veteran organizations, and local civic groups to provide culturally competent counseling and advocacy training.

5. Policy Development & Legislative Engagement

Direct interaction with legislators and the development of state-level policies addressing systems challenges emerged as a critical path forward. Participants emphasized the need for nontraditional voices in advocacy efforts, identifying healthcare employers, small business owners, faith leaders, and veterans as compelling messengers to speak to student debt’s

broader economic and social impacts. Focus on both policy creation and legislative relationships is essential, with participants noting that successful engagement requires sustained relationship-building to create opportunities for both immediate policy wins and longer-term systemic changes.

Identified Solutions and Programs

Current Programs to Amplify & Support:

1. Public Service Loan Forgiveness (PSLF)

• • Available after 10 years of public service and includes recent changes to payment criteria and employment certification
  • Addresses workforce shortages and challenges, and supports the continued retention of talent in public service professions

2. Income-Driven Repayment (IDR) Plans

• • Based on income with cancellation after 20-25 years
  • Makes payments more affordable for borrowers and their families, freeing up resources in their budgets for basic needs or other financial goals

Proposed Solutions to Explore:

1. State-level Employee Assistance Program (EAP)

• Extension of and education about debt relief options
• Employer engagement and sharing of best practices

2. Borrower’s Bill of Rights to address:

• Proper evaluation for repayment programs
• Timely billing
• Clear communication about forgiveness decisions
• Direct access to representatives
• Help with documentation and deadlines

3. Educational Initiatives:

• Financial coaching and legal aid referrals
• Professional development and training
• Recent graduate education programs
• Outreach about key programs and deadlines

4. Policy Development:

• Data and servicer transparency requirements
• Single sign-on system improvements
• Protection against predatory refinancing practices
• Focus on building wealth, not just wages
• Requirements for servicers to provide necessary information and advice

Download a PDF version of the summary report here!