Here are the best articles from around the web this week talking about student loans…
For the week ending Friday December 13, 2013
Student Loan News:
1. Federal Budget Deal Could Hit Student Loan Servicers:
A federal budget deal was struck Tuesday night that is expected to prevent another government shutdown next year—and have an impact on student loans.
The agreement depends on whether the deal makers–Senator Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wisc.) can sell it to their respective caucuses. If it becomes law, about 87% of last year's sequester cuts are expected to be restored, leading to an increase in federal spending of about $63 billion during the next two years.
Some spending could be replaced without a tax hike or reductions in entitlement programs. Soup-to-nuts sources of new revenue include higher airline security fees and increased pension contributions from federal workers. Visit now: http://www.mainstreet.com/article/moneyinvesting/education-planning/federal-budget-deal-could-hit-student-loan-servicers
2. Yes You Can Eliminate Your Culinary School Student Loans in Bankruptcy:
have a private Sallie Mae student loan I took out back in 2007 to pay for a vocational education in culinary arts from a school called “Kitchen Academy” (I think they got bought out by Le Cordon Bleu and now they go by the latter name)
The loan was originally for $16,000. I now owe $27,000 due to interest. I spent years not being able to pay the loan because I couldn't afford to do so. I managed to obtain jobs in the culinary field but never made more than $8/hr. I had to leave that field because I could not make a living off of jobs as a cook.
At one point in 2010 I worked two jobs one in fast-casual food and the other in retail and still only made $800/month BEFORE taxes. Find more information: http://www.huffingtonpost.com/steve-rhode/yes-you-can-eliminate-you_b_4421296.html
3. Borrowers Are Finally Using the Government's Helpful Student Loan Program:
There’s no shortage of painful numbers about student loans. Just yesterday, a new report from the Institute for College Access & Success showed that seven out of 10 borrowers are graduating from college in debt, averaging almost $30,000 in loans. Among the gloom, though, there’s a bit more optimistic news: Students are finally using federal programs designed to make their loans more affordable.
The federal government has three main programs that tie how much a borrower pays to how much the borrower earns. They generally extend the loan, cap the monthly payments as a percentage of income, and then forgive the balance after a certain period of time. As I (and other reporters) have pointed out, students were slow to sign up for the programs. While the programs have some downsides that don’t make this the right choice for everyone, they clearly could have helped more people than the 280,000 Direct Loan borrowers who had enrolled as of June 2012. Original news: http://www.businessweek.com/articles/2013-12-05/borrowers-are-finally-using-the-governments-helpful-student-loan-program
Student Loan Blog Posts:
1. While Still Paying Off Student Loans, Sen. Murphy Tackles College Affordability:
Perhaps because he is still paying off student loans himself, Sen. Chris Murphy, D-Conn., is keenly aware of the nation’s accumulated student loan debt – which, he noted recently, has reached $1.1 trillion.
“Onus [should] be on colleges to lower costs, not students to cough up more cash,” Murphy declared in a Twitter message last month, just days before he and Sen. Brian Schatz, D-Hawaii, unveiled legislation designed to stem the growth of this mountain of debts.
Their legislation, to be formally introduced this month, comes as Congress proceeds slowly to consider reauthorization of the Higher Education Opportunity Act of 2008, the law governing federal higher education programs that officially expires at the end of this year. Get more: http://bunewsservice.com/while-still-paying-off-student-loans-sen-murphy-tackles-college-affordability/
2. Student loan debt hits a new high as millennials take ‘poverty-wage' jobs:
The class of 2012 has the highest student loan burden of any graduating college class in history, continuing a five-year trend of rising debt loads on millennials just coming out of school.
The average student debt load made a big jump in the past year, from $26,600 in 2011 to $29,400 in 2012, according to the Project on Student Debt at The Institute for College Access and Success.
It's increasingly rare for students to get out of college without student loan debt. Of 1,075 private and public colleges, 42 reported that more than 90% of their graduating class are leaving college with some student debt – meaning the vast majority of their students had to take loans to graduate. Meanwhile, 122 colleges reported the average debt per student is more than $35,000. Overall, currently only three out of every 10 US graduates are graduating without debt. Find more: http://www.theguardian.com/money/us-money-blog/2013/dec/06/student-loan-debt-minimum-poverty-wage-jobs