Here are the best articles from around the web this week talking about student loans…
For the week ending Friday April 05, 2013
Student Loan News:
1. Student loan debt collectors may lose out on commission rates:
Private collection agencies and the U.S. Department of Education remain unclear about the specifics on their new contract conditions that began in March to limit private debt collection agency commissions.
According to a representative of the U.S. Department of Education, who wished to remain on background, private debt collectors may now receive a smaller commissions on defaulted federal student loan borrowers they persuade to make loan payments.
Dr. Linda Bradley, assistant professor of family and consumer sciences, said lower commissions could benefit loan borrowers in default. More Details: http://sundial.csun.edu/2013/04/student-loan-debt-collectors-may-lose-out-on-commission-rates/
2. Tuition.io helps manage all student loans in one place:
After graduating from Columbia University in the height of the recession and acquiring $120,000 in debt, including 12 student loans from seven servicers, Brendon McQueen was left with a film degree and a six-month grace period before his first loan repayment was due.
Frustrated by the lack of options in tracking and managing his various loans, McQueen, like many other entrepreneurs, took matters into his own hands. Details here: http://www.latimes.com/business/technology/la-fi-tn-tuition.io-consolidating-student-debt,0,5123579.story
3. Ryan Budget Could End Federal Student Loan Repayment Program:
The House Republican fiscal 2014 budget blueprint would gut the student-loan repayment program for federal employees, according to The Washington Post.
The budget plan – proposed by Rep. Paul Ryan, R-Wis., and passed by the House on March 21 — “assumes discretionary savings by eliminating the repayment by the government of student loans for federal employees,” according to a House report.
Cutting the loan program is one element of the broader strategy, which includes steep cutbacks on spending for federal personnel and benefits. For more info: http://www.govexec.com/pay-benefits/2013/04/ryan-budget-could-end-federal-student-loan-repayment-program/62237/
Student Loan Blog Posts:
1. Missouri College Drops Student Loans:
A small college in Missouri has come up with a surprisingly simple solution to the student loan crisis: it will no longer accept students who take out loans to pay for tuition. Instead, for the 90 percent of its students who require some form of financial aid, the college offers students a number of on-campus work opportunities. Rather than cash, students earn credits for tuition. Reuters has more:
“This college has a very low percentage of students graduating with debt, but it has come up a little and we just don’t think that is a good idea,” Davis said. “This a work college, not a debt college.” The school years ago stopped taking students who wanted to get public loans. Check out: http://blogs.the-american-interest.com/wrm/2013/04/01/missouri-college-drops-student-loans/
2. Congressional inaction could affect student loans:
Congressional inaction could end up costing college students an extra $5,000 on their new loans.
The rate for subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, just as millions of new college students start signing up for fall courses. The difference between the two rates adds up to $6 billion.
Just a year ago, lawmakers faced a similar deadline and dodged the rate increase amid the heated presidential campaign between President Barack Obama and Republican challenger Mitt Romney. But that was with the White House up for grabs and before Washington was consumed by budget standoffs that now seem routine. Visit Now: http://www.voxxi.com/congressional-inaction-student-loans/
3. Federal student loan interest slated to rise back to 6.8%: Once again, federal student loan interest rates are set to double from 3.4 percent to 6.8 percent (on new loans; existing ones wouldn't be affected). Last year's fix wasn't great, and that happened in the pressure of an election year in which President Obama campaigned on the issue. That means this year, with student loan defaults already hitting a new high, students are likely to be really screwed, paying up to $5,000 more interest than they would at the current rate. Read more: http://www.dailykos.com/story/2013/03/29/1197846/-Federal-student-loan-interest-slated-to-rise-back-to-6-8