Student Loan News August 16, 2013
1. Federal Student “Aid” Demand Rises
The percentage of undergraduates who used student federal student to pay tuition fees in 2012 reached an astonishing 57%. This percentage is stunningly high compared to the 47% that prevailed in the pre-crisis period (2007-2008). This is according to a report set to be released on Tuesday by the Education Department.
According to the WSJ, the average aid per student amounted to $8200 in 2011-12. The increase in reliance on federal loans corresponds to the increasing tuition costs in the US. According to the National Center for Education Statistics (NCES) (a division of the Education Department), in-state fees and tuition in public colleges rose from around $5,900 (in 2007-08) to about $7,700 (in 2011-12).
“Clearly, we can see over the last four years that a growing percentage of undergraduates and their families have relied upon aid…from federal grants and loans”
For more on this, visit http://www.zerohedge.com/news/2013-08-20/federal-student-aid-demand-soars
2. Student Loan Default Rates Rise In Colorado
Thousands of former students in Colorado have stopped repaying their federal student loans. At least one of the 2 dozen colleges in Colorado faces federal sanctions because of a high default rate.
The schools attributes the high default rate among former students to the state’s soft economy. For 9 consecutive months, over 8,800 Colorado former students (10.1%) failed to make their federal loan repayments on time. This is according to 2010 data.
According to Alicia Evangelista, a 30-year former student at CollegeAmerica, – it is not easy to come out of default. “I’m trying my best, but it’s hard,” she said. Working for $16 an hour, it has been a challenge for her to pay $643 per month towards the more than 30,000 student loan.
For more on this, visit: http://www.canoncitydailyrecord.com/news/canoncity-local-news/ci_23908163/student-loan-default-rates-soar-colorado
3. Understand Calls For Loan Repayment Reform
A proposal making waves among student loan specialists is likely to harm millions of students relying on federal loans. A Jason Delisle and Alex Holt’s analysis of Georgetown Law School’s Loan Repayment Assistance Program lead them to propose the following: – limiting Public Service Loan Forgiveness at $30,000, and – introducing a limit of $75,000 for all federal student loans.
According to Student Loan Ranger, the wide-ranging reforms are not warranted by their analysis. Loan Repayment Assistance Programs are put into place by institutions to provide funds to aid borrowers make their monthly loan payments. According to the authors, Georgetown Law is giving away free legal education using its LRAP at the expense of taxpayers.
For more on this, visit: http://www.usnews.com/education/blogs/student-loan-ranger/2013/08/21/understand-calls-for-loan-repayment-reform
4. Student Loan Debt Relief Industry Draws Scrutiny
Most people face troubles navigating the debt relief system. This makes them end up in the hands of unscrupulous individuals who rip them off in the name of help.
“We know people are having trouble with their student loans, and we know it can sometimes be hard to navigate the government system,” Loonin said, but “that should not be an open door to ripping people off.”
“It’s troubling when financially distressed borrowers are targeted and encouraged to pay for help that they could get for free,” said Lauren Asher, president of the Institute for College Access and Success.
According to Rohit Chopra, student loan ombudsman at the Consumer Financial Protection Bureau (CFPB): “You do not need to pay someone to help you with your student loan, you can enroll yourself,”
For more on this, visit: http://news.gnom.es/news/student-loan-debt-relief-industry-draws-scrutiny
Image courtesy of Boaz Yiftach / FreeDigitalPhotos.net
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