Kevin Freudenburg knows little about his student loans.
The senior international studies major at the University of Nebraska-Lincoln admits he doesn't immediately know how much he owes or what's happened to the student lending industry in recent months. And none of that, he said, really bothers him.
Freudenburg's lack of debt awareness isn't unique. Despite student lending being an $85 billion-a-year industry - the average student is graduating with $19,237 in debt - students' indifference toward their loans has always been a problem, said Kevin Bruns, executive director of America's Student Loan Providers, an organization that represents federal student lending companies.
However, Bruns said, student apathy toward loans might be changing. Over the past year, the loan industry has received increased attention from lawmakers and the media.
Little of the attention has been positive.
Mounting student debt and allegations of corruption among lenders have made student loan reform a major issue for both legislators and students, which Bruns said has made students more knowledgeable about their debt.
The rising costs of tuition and student loans have made college finance a prominent issue in this year's presidential campaign. Sens. Hillary Clinton, John McCain and Barack Obama have all come out against current lending practices and called for reform within the industry.
Tax credits, or government money awarded to recipients through the tax system, are one of the main solutions they have presented. Clinton has proposed a $3,500 tax credit and an increase in the maximum amount of the Pell Grant, a need-based federal aid program. Obama has made frequent mention during speeches of his plan to give students a $4,000 tax credit. McCain has also advocated increasing the amount of Pell Grants.
However, some feel the proposed tax credits still won't be enough to mitigate the rising costs of student loans.
Derek Smith, a sophomore business administration major at UNL , has $13,000 in loan debt and said he would like the credit amounts to be higher.
"Every bit helps, but $4,000 seems so miniscule compared to the actual amount of student debt," he said.
With students' average cumulative debt increasing by around $550 a year, according to the 2003-2004 National Postsecondary Student Aid Study, some think the amount students are borrowing is too high.
Increases in tuition rates and the decreased buying power of scholarships have caused students to take out more loans at higher costs. In 1980, a Pell Grant paid for about 55 percent of tuition for grant recipients. In 2007, it paid for only 25.6 percent of tuition.
As federal scholarship programs fell behind rising tuition costs, students turned to loan companies to make up the difference, said Ritchie Morrow, financial aid coordinator for Nebraska's Coordinating Commission for Postsecondary Education.
"Loan borrowing has just increased considerably over a number of years," Morrow said.
At a speech to South Carolina State University students in October, McCain said Pell Grant amounts need to be increased so the grant pays for a larger amount of tuition.
"We should not burden our young men and women after college with debt," McCain said in an article on his campaign Web site.
The delayed payments on loans have also caused problems for students. Federally guaranteed loans do not require students to repay them until after they graduate, which means loan debt often takes years to pay off, Morrow said. In some cases, the need to repay a large amount of debt can influence a student's choices after college.
"It might delay getting married, buying a house," Morrow said. "They might take a job at higher pay that's not exactly what they wanted to do because they need to be able to pay off their loans."
At a speech at Plymouth State University in New Hampshire, Clinton told the story of how she was able to take a lower paying job working for the Children's Defense Fund after college because she did not have crushing student debt, something she said has become more difficult for students to do.
"It did not bankrupt me," she said in a copy of the speech posted on her campaign Web site. "Instead, I got to do what I wanted to do. And now, what is happening is so many young people come out with debt and have to take jobs solely for the purpose of paying off their student loans."
To ease the burden of repaying loans, Congress began cutting government subsidies to lenders, passing the College Cost Reduction and Access Act in September. The act provides more money to need-based federal grants and cuts the interest rates on federal loans in half.
"The legislation was crafted to address the concerns our committee has been hearing from students across the country and would create a more user-friendly higher education system," said Rachel Racusen, deputy communications director for Rep. George Miller, chairman of the House Committee on Education and Labor.
Clinton voted for the bill, while McCain voted against it. Obama did not vote on the act.
In a conference call with student reporters last May, before the reduction act passed, Obama said subsidies to lenders were too high and didn't do enough to help students.
"We shouldn't be providing billions in taxpayer-funded giveaways to private banks; we should be providing an affordable, accessible college education to every American," Obama said in a press release on his campaign Web site.
While good for students, Bruns said the cuts have had a negative impact on some lending companies. Many lenders, especially private companies, depend on subsidies for profits because interest rates on student loans tend to be lower than other loans.
With subsidies decreasing, some lenders have become more cautious about who they lend to and have stopped lending to lower-income families who are more likely to default on their loans. Other companies have left the student loan business altogether.
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