Here are the best articles from around the web this week talking about student loans…
For the week ending Friday April 19, 2013
Student Loan News:
1. Young people with student loans shy from homeownership:
For the first time in at least a decade, 30-year-olds who didn't take on student loan debt in college are more likely to own homes than those who did, a new report from the Federal Reserve Bank of New York finds.
That switch may have long-term implications for both the rental and owner housing markets as college-educated but debt-laden young people put off (or forgo altogether) a transition from renting to buying.
“While highly skilled young workers have traditionally provided a vital influx of new, affluent consumers to U.S. housing and auto markets, unprecedented student debt may dampen their influence in today’s marketplace,” the Fed's Meta Brown and Sydnee Caldwell write. Details here: http://www.oregonlive.com/front-porch/index.ssf/2013/04/young_people_with_student_loan.html
2. Student Loans and the Spring Swoon:
I had been kicking this around for a while, never finding the time to a real data dig. But, as there is renewed worry about a “Spring Swoon” – a seasonal drop-off in US consumption, I thought I would mention that we have one strongly growing segment of consumer debt and it is by its very nature highly seasonal: student loan debt.
The monetary story here is that shadow price of cash rises in between student loan disbursements.
In other words families are worried about whether and how much student loan aid their children or even they will receive. In response, they clamp down on discretionary expenses when they are far away from a student loan disbursement date. If they have an emergency, they want to make sure they can handle the emergency and have enough money to pay for school. Look at more: http://www.forbes.com/sites/modeledbehavior/2013/04/17/student-loans-and-the-spring-swoon/
3. Student loan forgiveness proposed for teachers in low-income areas:
The notion of debt forgiveness is hardly a popular theme and rarely embraced by both sides of the aisle; however, there’s a kernel of an idea regarding student loans that appears to be gaining momentum in statehouses around the country.
In a nutshell, some government leaders, from New Mexico to South Carolina and Wisconsin, are floating the concept of student loan forgiveness for highly proficient teachers who spend a certain amount of years in low-income urban and rural schools. For more info: http://www.voxxi.com/student-loan-forgiveness-for-teachers/
Student Loan Blog Posts:
1. Proposed Student-Loan Reforms Set Activists and Lawmakers at Odds:
Washington — With interest rates on federal student loans set to double this summer, student-advocacy groups have intensified their calls for Congress to find a way to avoid the increase, and lawmakers are scrambling to pass legislation that would overhaul the student-loan system.
President Obama’s loan-reform proposal, which he released on Wednesday as part of his budget for the 2014 fiscal year, suggests switching to a market-based rate, in which interest rates would be set annually and fixed for the duration of each loan. Understand more: http://chronicle.com/blogs/bottomline/proposed-student-loan-reforms-set-activists-and-lawmakers-at-odds/
2. Student loan woes put dreams on hold:
She loves her job as a nurse and makes a pretty good living at it, but Karla Gourley’s dream is to become a nurse practitioner.
It’s a step up that Gourley figures would increase her current salary of $55,000 by as much as $30,000, while giving her more freedom to pursue the kind of health care work she loves.
She’s putting that dream on hold, for now.
Gourley, 36, is worried that interest rates on the subsidized Stafford loans that she had planned to rely on for her bachelor’s degree in nursing will double unless Congress intervenes. That would add to the already daunting cost of going back to school. View full story: http://lifeinc.today.com/_news/2013/04/14/17722724-student-loan-woes-put-dreams-on-hold
3. Student loan default rates rise:
The most recent available data shows Missouri Western students’ loan default rate has tripled in just four years.
This problem is not only unique to Western, as default rates all over the country are climbing. However, the folks at financial aid here on campus are instituting a lot of new programs to keep students up-to-date on their loans and out of collections.
The default rates on loans come out every three years so the 2013 release is still a draft and not public. The most recent trends though show that between 2006 and 2009, the rate here went from only 6 percent to 19.9 percent.
Default rates are so important to our campus because high numbers can lead to federal cuts. Marilyn Baker, director of financial aid, explains. More explain: http://www.thegriffonnews.com/2013/04/default-rates-on-student-loans-on-the-rise/
PayMyStudentLoans.com Around The Web:
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