Here are the best articles from around the web this week talking about student loans…
For the week ending Friday April 04, 2014
Student Loan News:
1.Student loan reform hitting Triad black colleges hard:
Federal efforts to limit the debt piled up by college students and their families who may have trouble paying back loans have caused significant harm at historically black colleges and universities in the Triad, according to college officials.
That harm is echoed at campuses around the country where many students have limited financial means and who have recently been cut off from the U.S. Department of Education's “PLUS Loans” thanks to stricter credit standards implemented in late 2011. A DoE panel of stakeholders is due to wrap up negotiations in May on permanent rules that could either loosen or retain the tighter loan standards.
“My biggest real criticism (of student loan reform efforts) has been about the arbitrary and capricious changes in the PLUS loan program that have adversely impacted a lot of students, especially those at HBCUs,” said Rosalind Fuse-Hall, president of Bennett College in Greensboro. “What it’s meant for us has been $1.4 million (in lost revenue) because parents weren't able to qualify under the new eligibility standards.” Read rest of post: http://www.bizjournals.com/triad/blog/2014/04/student-loan-reform-hitting-triad-black-colleges.html
2. $1T student loan debt widens U.S. wealth gap:
Every month that Gregory Zbylut pays $1,300 toward his law school loans is another month of not qualifying for a decent mortgage.
Every payment toward their student loans is $900 Dr. Nida Degesys and her husband aren't putting in their retirement savings account.
They believe they'll eventually climb from debt and begin using their earnings to build assets rather than fill holes. But, like the roughly 37 million others in the U.S. saddled with $1 trillion in student debt, they may never catch up with wealthy peers who began life after college free from the burden.
The disparity, experts say, is contributing to the widening of the gap between rich and everyone else in the country. Get more info: http://www.rgj.com/story/news/education/2014/03/31/t-student-loan-debt-widens-us-wealth-gap/7076927/
3. Can ‘Pay It Forward' Help Solve Student Loan Problems?
With student loan burdens mushrooming into daily talk of a “bubble,” Michigan and Oregon policymakers are looking at a “Pay it Forward” student lending systems. This is when students initially pay no tuition but after college pay back a fixed percentage of their incomes. What this ends up meaning practically is that monetarily successful graduates pay back more and subsidize those who make less.
This generates a problem of incentives, points out University of Michigan economist Sue Dynarski, who wrote for The Brookings Institution think tank about how this type of cross-subsidization creates adverse selection. Those borrowers likely to benefit from the subsidies will get loans, but those likely to subsidize will avoid Pay it Forward. Published here: http://www.forbes.com/sites/carriesheffield/2014/03/31/can-pay-it-forward-help-solve-student-loan-problems/
Student Loan Blog Posts:
1. How Student Loans Are a Big Drag on the Economy:
While carrying some student loan debt may be inevitable, higher and higher balances can strain finances for a decade or more.
About 37 million Americans now owe more than $1 trillion on their student loans, with the average household having about $26,000 in debt. Each check that a college graduate writes to pay off his student loans means less money for investing in a home or contributing to a retirement fund.
The net worth for a household with no outstanding student loan debt is nearly three times the net worth of a household with student debt, according to a study published in the Federal Reserve Bank of St. Louis Review last September. Go there: http://247wallst.com/economy/2014/03/29/how-student-loans-are-a-big-drag-on-the-economy/
2. How to do taxes when you have student loan debt:
Student loan debt, like all debt, follows you until it’s paid or cancelled. But unlike most other debt that pounds away at your bank account until it’s paid, student loan debt comes with an upside, in the form of tax benefits.
Here’s how to take into account student loan debt this tax season.
Get the right form:
Before even filling out taxes, you need all the right forms.
You should have received tax forms from your employer/s by now, but student loan debt requires different forms. One such form is the 1098-E, which reports how much interest you’ve paid on your student loans for that year. Another form you may have received is a 1099-C, titled “Cancellation of Debt.” Find main article: http://www.usatodayeducate.com/staging/index.php/choice/how-to-do-taxes-when-you-have-student-loan-debt
3. Nova Scotia government eliminates interest on student loans:
The Nova Scotia government is eliminating interest on provincial student loans in a move it says will save graduates hundreds of dollars over the life of their loans.
The government says there could be about 18,000 students who would benefit every year from the interest relief.
Advanced Education Minister Kelly Regan says the average Nova Scotia student loan is about $5,600, and the interest would total about $800 over the loan’s lifetime.
She says people who take advantage of it have to live in Nova Scotia, have graduated from an approved school and have a Nova Scotia government-sponsored direct-lend loan. Read full article: http://globalnews.ca/news/1236564/nova-scotia-government-eliminates-interest-on-student-loans/
PayMyStudentLoans.com Around The Web: