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Student Loans

As the Value of a High School Degree Declines, More and More Students Are Going #InTheRed

In partnership with various organizations working to curtail the student debt crisis, members of the United States Senate have recently put together a campaign to set the student debt crisis talks front and center. Dubbed “#InTheRed,” the campaign is part of a larger effort by Senate Democrats to make student debt a priority in 2016. One of these Senators, Chuck Schumer (D – NY) said, “I am launching this campaign today to encourage students and parents and student loan debt holders to share their stories so we can finally force Congress to comprehensively address the issue of college affordability, which is key to the ongoing success of our economy.”

New Income-Driven Repayment Plan Now Available for ALL Federal Direct Student Loan Borrowers: REPAYE

Starting today, all borrowers with federal Direct student loans have access to a new repayment plan with monthly payments limited to 10% of your discretionary income. You can enroll regardless of when you borrowed. If you’re having trouble affording your monthly payments – or just want the assurance of payments based on your income – check out the Revised Pay As You Earn (REPAYE) plan and see if it’s right for you.

Corinthian Colleges Ordered to Pay Damages to Students

Federal consumer regulators on Wednesday won a major court battle against Corinthian Colleges Inc., the former national for-profit chain that entered bankruptcy this year amid claims of defrauding students.

A federal judge in Illinois ruled that Corinthian “engaged in deceptive practices” by misleading students about their career prospects, according to documents obtained by The Wall Street Journal. 

Finally, Help for Pell Students at Closed Campuses

When colleges shutter their campuses, who’s harmed the most? Students are, especially low-income students. They are the ones with the least protection. That’s why it was so refreshing to see Rep. Bobby Scott (D-Va.) and Sen. Barbara Boxer (D-Calif.) stand up for them by introducing the “Pell Restoration Act of 2015,” which will allow Pell Grant recipients the ability to continue their education at another institution.

Young Invincibles’ #MillennialMon Twitter Chat

Did you see Young Invincibles’ #MillennialMon Twitter chat on Solving the Student Debt Issue?

How to Avoid Student Debt Relief Scams

If you’ve seen or heard ads around federal student loans that seem to good to be true, they probably are. Many of these debt relief companies are charging exorbitant fees for these services. 

So How Did Financial Aid Come About?

Recently we shared two of the films in a series produced by the Lumina Foundation and the Institute for Higher Education Policy. The series — Looking Back to Move Forward: A History of Federal Student Aid — provides insight into the evolution of financial aid through first-hand experiences with the policymaking process.

Congress Is Creating Conditions for Another Corinthian Scandal

Corinthian Colleges has become the poster child for what’s wrong with the for-profit college industry. It misrepresented its job placement — the eligibility criteria for it to receive federal funds — and abruptly closed its doors when the federal government demanded some accountability.

The immediate victims of this business’ collapse are the thousands of students left with debt, worthless degrees, or both. The secondary victims are taxpayers.

A Plan for Making College Affordable

If you’ve been following #highered on social media lately, you may have noticed that college affordability and student loan debt are attracting attention of the 2016 presidential contenders. Many candidates harp on colleges to lower costs and on states to increase their funding, but any solution to making college more affordable needs to do more...

For Corinthian Colleges Students: What You Need to Know about Debt Relief

Earlier today, the U.S. Department of Education announced new steps to protect students from abusive for-profit colleges, as well as a new debt relief process for students at Corinthian Colleges – which operated schools under the names Everest, Heald, and Wyotech.

Information for borrowers is available at the Federal Student Aid (FSA) website...

What I Didn’t Know About Choosing a College

When I was a high school senior (many moons ago), I thought I was well-equipped to make the best college choice for me. I had read the brochures (Google wasn’t a thing back then); talked with my school counselor as well as friends and family; and visited campuses to check things out in person. After doing all of that and receiving acceptance letters and financial aid packages, I made a decision...

An Updated College Results Online = More Data for You

College Results Online has been updated with the most recent data from the federal government (2012-13), giving you even more information to compare in this one-stop shop tool. At CollegeResults.org — now in its 10th year of compiling and sharing critical information on colleges across the country — you can select nearly any four-year college or university and compare its graduation rate with that of similar institutions serving similar students.

The Lumina Foundation’s “Where Financial Aid Began: Partnering with Campuses and States”

The last time we checked in, we shared Part 3 of the Lumina Foundation and Institute for Higher Education Policy’s Looking Back to Move Forward: A History of Federal Student Aid. It’s a great documentary series on the evolution of federal student aid. 

CFPB Public Hearing on Student Debt

If you live in Milwaukee or plan to be there this week, consider joining the Consumer Financial Protection Bureau for a public hearing on student debt this Thursday. 

Reminder: What happens to your student loans if your school is shut down

When you’re told that your college will be shutting down, there can be a lot of uncertainty about what comes next. In light of recent closures of certain for-profit colleges, we wanted to share some helpful advice to help you navigate the situation.

Working Toward a Fresh Start for Corinthian Students

Imagine this: You’re 24, have your high school diploma, and have been working in a low-wage job for six years when you see an advertisement for a new career training program at a local, for-profit university. The ad promises to teach the latest, cutting-edge skills that will guarantee you a high-paying career...

A Must-See: The Lumina Foundation’s “A History of Federal Student Aid”

Have you seen The Lumina Foundation and the Institute for Higher Education Policy’s film series, Looking Back to Move Forward: A History of Federal Student Aid? The four-part series provides insight into the evolution of federal student aid over the last 60 years.

Pell Grants have helped millions of students from low-income families attend college. But you’ll be surprised to see the struggle that the program had to go through to become what it is today.

Burned by a Career-Ed Program: Real and Raw Student Stories

The U.S. Department of Education plans to release its final "gainful employment" rule in October 2014. The draft rule, circulated by the department earlier this year, proposed cutting off access to federal financial aid for career-education programs (many of which are at for-profit colleges) whose graduates have high student loan default rates or high levels of student loan debt relative to their incomes. It is essential that the department adopt a final rule with strong protections for students.

During the month of May we asked students to submit their stories as public comments on the department’s draft “gainful employment” rule. Many of the student victims who have been exploited and defrauded by career-education programs offered compelling evidence of the need for stronger protections. Here’s what some of them had to say:

Low-Income Students Deserve a Real ‘CHANCE’ at Affordable College

Each year millions of Americans depend on Pell Grants to help make college affordable. Research has shown that need-based grant aid, like Pell Grants, increases college enrollment among low- and moderate-income students. But with college costs skyrocketing over the last three decades, Pell Grants have lost much of their purchasing power. In the 1980s, Pell Grants covered 77 percent of the cost of college at a four-year public college for low-income students. Today that share has dropped significantly to only 31 percent of the cost.

New Bill To Protect Students From “Auto-Defaults” on Private Loans

If you have ever lost a parent, grandparent or sibling, you’ll know that on top of the pain of loss and grief, there are a thousand details that need to be addressed. But one of those details shouldn’t be your student loans.

The last thing that a borrower needs to have on their mind when someone close to them has passed away is how it will affect their student loans. Sadly though, many private student loan lenders do just that, adding headache on top of heartache.

In a report released last month, the Consumer Financial Protection Bureau revealed that many private student loan contracts have clauses that automatically accelerate loans into default upon the death of the cosigner or if the consigner files for bankruptcy. This is the case even if the borrower has been making on-time payments. In some cases, lenders have gone as far as to ask for the full, early repayment of the loan. Often times cosigners are parents, grandparents, or someone else who is close to the borrower. As of 2011, about 90 percent of private student loans had cosigners. Continue reading...

Unpredictable Interest Rates Make Federal Grants Even More Important

According to Congressional Budget Office estimates for the 2015-16 school year, the average undergraduate borrower will pay 5.72 percent to borrow from the federal government; for graduate borrowers the rate is forecasted at 7.27 percent, and for Parent Plus loans, 8.27 percent. All rates are higher than what students paid to take out loans this year.

What may be even more troubling than the rising interest rates is that the CBO has projected that the federal government will generate $127 billion in profits from loan payments over the next decade.

Google Hangout With CFPB hosted by Higher Education Advocates Provides Tips on Managing Student Debt

On Tuesday, Young Invincibles and StudentDebtCrisis.org hosted a Google Hangout on the “Top 5 Tips for Tackling Your Student Debt.” Rohit Chopra, of the Consumer Financial Protection Bureau, offered some of his best tips for managing student loan debt. In case you missed the great conversation, here’s a brief recap of some of the advice offered:

The Federal Government is Profiting off of Your Student Debt

The U.S. Government Accountability Office (GAO) recently released a report revealing that the federal government stands to make $66 billion in profits from student loans that originated between 2007 and 2012.

Soon following, a group of nine Senators strongly responded to the report, advocating for policies that address student loan debt, loan refinancing, and lower interest rates. Sen. Elizabeth Warren (D-MA), states, "This is obscene. The government should not be making $66 billion in profits off the backs of our students. The report issued today reinforces what we already knew - instead of investing in our children and their futures, the government is squeezing profits out of our young people and adding to the mountain of debt they will spend their lives struggling to repay."

Senator Warren to Introduce Bill to Allow Student Borrowers to Refinance Loans

Do you have a mortgage or car loan and wish to refinance to a lower interest rate? Congratulations, you have that consumer protection. But do you know who doesn’t? Student loan borrowers. Luckily, new legislation soon to be introduced in the U.S. Senate may change this.

U.S. Senator Elizabeth Warren (D-MA) recently announced her plans to introduce a bill that will allow students to refinance their federal student loans to the lower interest rates under the Bipartisan Student Loan Certainty Act of 2013. A measure that has the potential to save student loan borrowers thousands of dollars over the course of a loan’s life.

Wisconsin State Legislation to Tackle Student Loan Debt

There is exciting news in the Badger State. Wisconsin policymakers are attempting to lower student loan debt.

As reported by One Wisconsin Now, the Higher Ed, Lower Debt Act (SB 375) introduced by state senators Dave Hansen and Cory Mason would:

Bill Will Create Loan Free College for Low-Income Virginia Residence

With the recent good news that the University of Virginia (U.Va) has once again prioritized financial aid for its lowest-income students, a promising bill in Virginia has emerged that will make a larger, statewide commitment to college affordability.  

Introduced by Virginia Delegate Rob Krupicka, Virginia College for All (formerly, the Virginia Guaranteed Assistance Program) would offer no-loan guarantees to low-income students and interest free loans to students of middle-income families who graduate within 150 percent of the time to standard completion (6 years for a traditional four year college and 3 years for a two year college).

Simple Tips for Keeping the Cost of College Low

At last, good advice to help pay for college and reduce those ever accumulating costs!

Christina Couch, a freelance writer and author of "Virginia Colleges 101", gives some useful tips for current college students, prospective students, and recent graduates. Couch offers information that includes everything from keeping an eye on federal policy, to keeping grades up while in school, and taking advantage of income-based loan repayment plans.

Read the full list of 10 tips at bankrate.com, but click on the heading for the list, sans explanation.

CFPB New Rule to Oversee Student Loan Servicers

The Consumer Financial Protection Bureau (CFPB) issued a new rule that puts the seven largest non-bank student loan servicers under its supervisory jurisdiction. Student loan servicers are third-party companies such as Sallie Mae, Great Lakes Educational Loan Services, Nelnet Servicing and the Pennsylvania Higher Education Assistance Agency that manage borrowers account and process their monthly payments. Under this new rule, they will join banks that service student loans in being regulated by the CFPB.

U.S. Dept. Of Ed College Ratings Hearing, George Mason

George Mason University recently hosted the U.S. Department of Education’s second of four college affordability forums to discuss the Obama administration’s proposed college ratings system. At the event, students expressed the same concerns to the department that thousands of current and prospective college students, like me, have across the nation: Students want more data to assess our financial future before enrolling in college and taking on massive amounts of student loan debt. To start, these data need to include information about the net price of college, the average incomes of graduates in different fields, and data on internship placement rates.