Press Release: New CSS Report Identifies Barriers to Student Loan Repayment and Offers Solutions

Press Release

New CSS Report Identifies Barriers to Student Loan Repayment and Offers Solutions

Calls for targeted outreach, clearer communication, and systemic reforms to boost borrower engagement and repayment outcomes

Student debt is among the most significant financial commitments young people face - yet most begin ill-prepared. Limited financial education, few borrowing restrictions, unclear repayment options and systemic gaps leave borrowers confused and vulnerable. The optimism of attending college and its economic benefits inherent with earning a degree are often tempered by harsh repayment realities in a shifting and complex loan landscape.

A new report from the Community Service Society of New York (CSS), developed in collaboration with Seven Letter and with support from Lumina Foundation, examines the barriers borrowers face and offers strategies to improve engagement and repayment outcomes. The report, "When Engagement Feels Futile: Borrower Perspectives on Student Loan Repayment-Barriers and Solutions," sheds light on why many borrowers disengage and what can be done to reverse this trend.

Why Engagement Breaks Down

To understand borrower behavior, the report examined:

Why some borrowers engage while others disengage
What messages motivate action
Which channels and messengers are trusted-and which are ignored
How communication can overcome complexity and inertia
How often and in what form borrowers want information

Researchers conducted a national survey and drew insights from CSS's Unheard Third survey and its Education Debt Consumer Assistance Program (EDCAP)-the nation's first statewide direct-assistance program for student loan borrowers. They also engaged in a focus group with borrowers and large-scale message testing with more than 74,000 New York adults.

Key Findings:

Inaction is widespread: Nearly a quarter (23%) of adults who left college have taken no steps to address their loans; among recent graduates (within two years), that number jumps to 57%.
Waiting for relief: Almost half (47%) haven't repaid because they expect debt forgiveness-despite most programs requiring payments and new, broad-based relief being unlikely under current policies.
Lack of awareness: Nearly half of borrowers don't know about major programs like Income-Driven Repayment (44%), Public Service Loan Forgiveness (45%), IDR Forgiveness (49%) or disability discharge (71%).
Financial strain dominates: Everyday costs are the top barrier (73%), with 64% prioritizing essentials like food, housing, and medical care over loan payments.
Overwhelmed and uninformed: 59% feel repayment is overwhelming; 33% know little about options; 24% tried but got lost in confusing information.
Misinformation and distrust: Billing errors, poor service, and perceptions of a "rigged system" fuel disengagement.
Strong demand for help: Nearly 90% want free, personalized counseling to navigate repayment.
What works: Messages that start with serious consequences (credit damage, wage garnishment) and pivot to hope-clear paths like affordable IDR plans-are most effective.
Preferred communication: Borrowers want monthly email updates from trusted sources (government, loan servicers, their schools) and timely outreach at key moments like graduation or missed payments.

Solutions to Break the Cycle

The report outlines borrower-centered, evidence-based strategies to improve repayment outcomes:

Deploy targeted, behaviorally informed campaigns to increase awareness of nonpayment risks and relief options like IDR and forgiveness.
Deliver clear, actionable information through trusted channels to close knowledge gaps and dispel misconceptions-such as the belief that borrowers must repay their full balance or that new, broad-based relief is coming.
Embed loan education into high school and college curricula to build financial literacy early and reduce age-related risk of inaction.
Streamline and automate repayment processes like IDR enrollment and recertification to minimize servicing failures, reduce complexity, and prevent cognitive overload.
Expand personalized, trust-based counseling throughout the borrower lifecycle to address confusion, decision fatigue, and demand for tailored guidance.

"Student debt isn't just a financial issue-it's a barrier to opportunity. This report makes clear that borrowers need more than policy fixes; they need trusted guidance and clear communication to navigate a system that too often feels broken. At CSS, we're committed to ensuring every borrower has the tools and support to succeed."
-David R. Jones, President & CEO, Community Service Society of New York

"Education should open doors to opportunity, not financial hardship. Yet for too many borrowers, student debt undermines the benefits of college. This report makes clear that trusted partners like EDCAP are vital to helping people manage repayment and move toward real financial stability."

-Katie Berger, Strategy Director for Federal Policy, Lumina Foundation

"We learned that borrowers aren't just facing a repayment challenge-they're navigating a trust crisis. When communication feels confusing or punitive, engagement collapses. This report offers practical ways to rebuild that trust through clear messaging, timely outreach, and partnerships that put borrowers' needs first."
-Erik Krause, Stakeholder Engagement Manager, EDCAP and co-author

"Student loan borrowers aren't disengaged because they don't care but because they're overwhelmed by complexity, misinformation, and financial strain. This report shows that when we meet borrowers where they are, with clear communication and real support, we can turn confusion into action and help them avoid default."
-Carolina Rodriguez, Director of EDCAP and co-author

"Solving the student debt crisis requires more than policy-it demands collaboration. This report underscores the power of networks and partnerships to share best practices, amplify effective messaging, and ensure borrowers everywhere have access to trusted guidance and support."
-Alyssa Picard, Strategic Partnerships & Network Development Consultant, National Student Debt Counselors Network and co-author

When Engagement Feels Futile-co-authored by Erik Krause, Stakeholder Engagement Manager for EDCAP; Carolina Rodriguez, Director of EDCAP; and Alyssa Picard, Strategic Partnerships & Network Development Consultant for the National Student Debt Counselors Network-presents borrower-centered solutions to address the student loan repayment and default crisis. The report identifies why engagement breaks down and offers actionable strategies to rebuild trust, simplify repayment, and empower borrowers to take meaningful steps toward financial stability.

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The Community Service Society of New York (CSS) has worked with and for New Yorkers since 1843 to promote economic opportunity and champion an equitable city and state. We power change through a strategic combination of research, services, and advocacy to make New York more livable for people facing economic insecurity. By expanding access to health care, affordable housing, employment opportunities, debt assistance, and more, we make a tangible difference in the lives of millions. Learn more at www.cssny.org.

Lumina Foundation is an independent, private foundation in Indianapolis committed to making opportunities for learning beyond high school available to all. We envision higher learning that is easy to navigate, delivers fair results, and meets the nation's talent needs through a broad range of credentials. We work toward a system that prepares people for informed citizenship and success in a global economy. Learn more at LuminaFoundation.org.

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