Here are the best articles from around the web this week talking about student loans…
For the week ending Friday February 14, 2014
Student Loan News:
1. Student Loans Are A Drag On The Economy And Society:
The shift from greater public funding of higher education to individuals financing their own education through debt has put more risk on individual students. But it also has potentially negative social and economic effects that spread beyond the college campus.
While loans are intended to expand college access to a broader population, the nature of risk that they entail also produces the opposite result. Low- and middle-income students worried about the consequences of taking out a loan will be more likely to decide that college attendance is not worth the risk. What we intended as a mechanism of educational expansion, then, is working at cross-purposes with itself. Learn more: http://www.forbes.com/sites/joshfreedman/2014/02/11/student-loans-are-a-big-drag-on-the-economy-and-society/
2. How to Stand Up to Your Student Loan Servicer:
Perhaps there's a bit of irony in the name “student loan servicer,” considering the number of stories out there about the less-than-satisfactory customer service they provide. The Consumer Financial Protection Bureau started collecting complaints about student loan servicers in March 2012, and the most recent annual report from the CFPB said the bureau had fielded 3,800 complaints about private loan servicers between October 2012 and September 2013.
Borrowers mentioned frustrations when seeking customer service and complained that miscommunication sometimes resulted in costly errors, like missed or mis-processed payments. Not only can such issues make the borrower pay more out of pocket, they can also affect people's credit scores, since payment history is the most important part of your credit profile. Check this out: http://www.dailyfinance.com/2014/02/13/student-loan-servicer-problems/
3. Indiana University Says Student Loan Borrowing Is Down:
Officials say overall student borrowing decreased by $34 million in 2013 compared to 2012 and the total number of undergraduate students taking out federal loans decreased by 12%.
“The idea behind our office being created initially was ‘Well, borrowing is a problem, how are we gonna reduce it,” says Indiana University Director of Financial Literacy Phil Schuman.
His office was created in 2012 to address student borrowing and college affordability.
Schuman says part of the reason student borrowing has generally increased in recent years is that students simply aren’t familiar with basic concepts like loan criteria necessary to make sound financial decisions. Right here: http://indianapublicmedia.org/news/indiana-university-student-loan-borrowing-62967/
Student Loan Blog Posts:
1. Why the government shouldn’t privatise the student loan book:
The announcement that the government intends to sell off part of the student loan book is perhaps no surprise, but it is bad economics. Debt from student loans is currently a groaning £46.6 billion on the government’s balance sheet. The government has already made very clear its intent to further privatise the UK’s higher education system.
The argument is simple. They want to convert an extended stream of income from student loan repayments – which are paid by graduates at a small proportion of their income each month, thus drip-feeding repayment to the government for up to 30 years into the future – into a one-time payment now. This would immediately lower the public debt number. It is a simple move of income in the future to income today. Official source: http://theconversation.com/why-the-government-shouldnt-privatise-the-student-loan-book-22784
2. Smart Student Loan Options:
With the cost of education rising, student loans tend to be the only option for many students. However a large amount of student loan debt can be debilitating post graduation. Choosing the right student loan can be as important as declaring the right major. So what are the best options? Below is a quick guide on choosing the best student loan option for you.
Best Loan Options:
Choosing the right student loan is imperative when it comes to your financial success long-term. Make sure you follow these rules before borrowing that money. Moved here: http://www.simplethriftyliving.com/smart-student-loan-options/
3. Two sent to prison for student loan fraud schemes:
Brent Wilder, 44, of Antelope, has been sent to federal prison for to two years and nine months, and Michelle Wright, 32, of Stockton, for three years in prison and one year of home confinement after each was convicted in a separate student loan ripoff scheme, says U.S. Attorney Benjamin Wagner. Ms. Wright was also convicted of aggravated identity theft.
According to court documents, between February 2009 and April 2012, Wilder and Michael Huddleston, 44, of Sacramento, obtained Federal Student Assistant funds by recruiting more than 50 straw students to apply for aid and caused the fraudulent disbursement of more than $200,000. View full article: http://studentloanslegalhelp.com/two-sent-to-prison-for-student-loan-fraud-schemes/