Here are the best articles from around the web this week talking about student loans…
For the week ending Friday February 21, 2014
Student Loan News:
1. Rising student-loan debt is stopping first-timers from buying homes:
Is your student debt preventing you from buying a house?
Sales to first-time home buyers remain depressed, a new Washington Post article notes, directing some blame at student loans. Many young people are graduating with higher debts than earlier generations while stricter lending standards have made it harder to get a mortgage.
Chief economist Lindsey Piegza of Sterne Agee has drawn a similar conclusion. About seven in 10 graduates leave school with debt and almost 40 million have sizable loans to pay off, she wrote in a recent report. See post: http://blogs.marketwatch.com/capitolreport/2014/02/18/rising-student-loan-debt-is-stopping-first-time-home-buyers/
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. Read full: http://www.foxbusiness.com/personal-finance/2014/02/19/how-to-stand-up-to-your-student-loan-servicer/
3. Debt collectors are gorging themselves on student loans:
The cost of college is skyrocketing. The labor market is atrocious. Employers demand a college degree for pretty much any job these days. Yes, at this point, it has become commonplace to note the crushing burden of college debt (the total amount of which is now something like $1.2 trillion). But there's another side to this story that hasn't gotten as much play: the implications for debt collection.
Debt delinquency exploded during the financial crisis, but has since steadily decreased for every type of debt — except that of students. Because the bankruptcy code is badly skewed when it comes to student loans, total debt collection has risen steadily. Students are now the fuel for one of America's more predatory agencies, which is saying a lot. Official statement: http://theweek.com/article/index/256606/debt-collectors-are-gorging-themselves-on-student-loans
Student Loan Blog Posts:
1. The privatisation of student loans will pass a point of no return:
These divisive plans would see student tuition loans boxed-up and sold-off to the highest bidder. It’s a privatisation that will further erode the concept of the university as a public service, reduce access to education, and impact on the already struggling body of students and graduates.The first tranche of loans (pre-1998) have already been auctioned-off, and the rest will swiftly follow unless we make it loud and clear that we do not find this acceptable.
The government has attached a £10 billion price tag to the student loan book. In order to achieve the highest price and ensure profits for the buyers, financial sweeteners will have to be offered – most likely by an increase in the cap on interest rates.
Students will be forced to pay more, and for longer, to repay their student debt. This amounts to a retrospective tuition fee hike. Moved here: http://www.impactnottingham.com/2014/02/the-privatisation-of-student-loans-will-pass-a-point-of-no-return/
2. Government underestimates the amount of student loans that are likely to be paid back:
According to a report published by the Parliamentary Public Accounts Committee, the Government are currently underestimating how many students will actually pay back their university loans over the coming decades. Currently, the Government estimates that between 35 and 40% of loans to Higher Education students are never paid back – the Committee believes that the rate on non-repayment is much higher and reflects a weakness in the loan collection method. The primary reason for non-repayment is that student details get lost over a period of time particularly if the graduate moves and works abroad or was an EU citizen who has returned to their own country. The method of using the income tax registration process as a way of locating former students has been criticized for not being an effective method of collecting information. It is estimated that the shortfall could be as much as £80 million by 2042. Click to continue: http://www.tutor2u.net/blog/index.php/economics/comments/government-underestimates-the-amount-of-student-loans-that-are-likely-to-be
3. Finally, a Law That Would Protect People From Student Loan Hell:
Many well-intentioned graduates can’t afford to pay off their student loans because of the sour economy. They are being sacked with debt and penalties that outweigh their best efforts to keep up.
Unlike other forms of debt, in the case of student loans, basic consumer rights like bankruptcy protection don’t apply to those who default. Instead, everyone from recent college graduates to the older underemployed who can’t afford to pay is subject to garnished wages and other income in the name of paying for higher education with an increasingly high price tag. Unresolved student loan debt in the United States now surpasses $1 trillion. Click here: http://studentloanslegalhelp.com/finally-a-law-that-would-protect-people-from-student-loan-hell/
PayMyStudentLoans.com Around The Web: