Here are the best articles from around the web this week talking about student loans…
For the week ending Friday April 12, 2013
Student Loan News:
1. Digging Deeper Into Student Loan Debt:
As student loan debt rises at an alarming rate in the United States, some analysts fear that this trend could cause another economic crisis. From 2005 to 2012, student loan debt grew from $364 billion to $904 billion — an increase of 13.9 percent annually. In a recent Federal Reserve Bank of Kansas City working paper, Kelly Edmiston, Lara Brooks, and Steven Shepelwich concluded that:
High debt levels, coupled with high default rates, present a number of challenges for individual student loan borrowers, but do not necessarily pose a substantial burden on society at large. Get more information: http://www.huffingtonpost.com/mike-english/digging-deeper-into-stude_b_3039936.html
2. Student loan interest rates to double:
Some student loan interest rates are expected to double this summer.
It's called the subsidized Stafford Loan. Many low-and middle-income students depend upon it in order to get a college degree.
If Congress doesn't take action now, interest rates on these loans are expected to sky-rocket by this summer.
“I guess it's not fair because it's out of my control and I'm just going to have to deal with it but it's just really frustrating to know that the people that I've elected into office aren't doing anything to help me be able to manage that,” Purdue student Katie Hensler said. Visit: http://www.wlfi.com/dpp/news/local/student-loan-interest-rates-to-double
3. SoFi Expands Student Loan Products for Refinancing Borrowers, Offers New Lower Interest Rate with 5-year Term:
Social Finance, Inc. (http://www.SoFi.com), the private student lender, announced today it is expanding its selection of loan products for eligible customers refinancing their student loans.
As a result of customer demand for increased flexibility in loan terms and interest rates, SoFi now offers a range of fixed-interest loans with varying terms from 5 years to 15 years. Customers who select a 5-year term can refinance at a rate of 5.74% APR. This rate is further discounted to 5.49% APR when customers make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account. More details: http://www.sfgate.com/business/prweb/article/SoFi-Expands-Student-Loan-Products-for-4424834.php
Student Loan Blog Posts:
1. Student Loans’ Latest Victim: Parents:
Total student loan debt is now more than $1 trillion and rising, and parents of students, many of whom are a decade or less from retirement, are finding themselves on the hook for an increasingly large portion of that total. The Deseret News:
Borrowers who are age 60 or older are the fastest-growing age group for student debt, according to the Federal Reserve Bank of New York. Their numbers have tripled since 2005, and 12.5 percent of their student loans are delinquent. For these borrowers, retirement can mean fielding creditors’ insistent phone calls while living on a fixed income that won’t ever cover the bills. It can mean having Social Security payments garnished to service student loan debt. Get more: http://blogs.the-american-interest.com/wrm/2013/04/08/student-loans-latest-victim-parents/
2. Survey Finds Many High School Seniors more Worried About Student-Loan Debt Than Getting into College:
Many U.S. high school seniors are more worried about the amount of debt they’ll incur earning a college degree than they are about getting into their school of choice, according to a new survey from the Princeton Review.
“Thirty-eight percent of students surveyed listed ‘level of debt incurred to pay for the degree’ as their primary concern,” the Erie Times-News notes.
“That edged out the top answer of the previous three years, which was getting into their preferred school but not being able to afford it or get enough financial aid,” the report adds. “This year, 33 percent listed that as their biggest worry.” Check out: http://www.theblaze.com/stories/2013/04/05/survey-finds-many-high-school-seniors-more-worried-about-student-loan-debt-than-getting-into-college/
3. Suze Orman joins Karen Bass to tackle student loan problem:
Los Angeles Congresswoman Karen Bass has been pushing for student loan debt relief. Tuesday on Capitol Hill, she and two other House Democrats turned to financial guru Suze Orman to champion their cause. Orman had some ideas of her own.
Bass has introduced a bill that gives borrowers a break after they’ve paid back federal student loans for ten years — if they've kept current on payments. “After ten years,” Bass said, “that loan would be forgiven up to $45,000.”
The bill would also cap interest rates for federal loans at the current 3.4 percent, rather than wait for an annual vote from Congress. Unless Congress acts by July 1st, the rate will double. The Bass bill would also suspend interest rates while the borrower is unemployed. Full story: http://www.scpr.org/blogs/politics/2013/04/09/13231/suze-orman-joins-karen-bass-to-tackle-student-loan/