Here are the best articles from around the web this week talking about student loans…

For the week ending Friday February 28, 2014

Student Loan News:

1. Refinancing can lower student loan debt: 

Millions of Americans could put more money in their pockets each month by refinancing their student loans. It’s always been possible to refinance private student loans, but few financial institutions offered this service.

In January, RBS Citizens Financial Group, which operates Citizens and Charter One banks, introduced a new Education Refinance Loan, with fixed rates as low as 4.75 percent APR and variable rates starting at 2.8 percent APR. There are no application, origination or disbursement fees and you don’t have to be a bank customer to apply for this refinance.

“These are very aggressively priced and typically a much better rate than a loan you can take out when you’re in school,” said Brendan Coughlin, head of education and auto finance at RBS Citizens Financial Group. “For a vast number of students who have private student loan debt, this will dramatically improve their payments and the interest they pay over the life of their loans.” Full article: http://www.today.com/money/refinancing-can-lower-student-loan-debt-2D12163074

2. Colleges need bigger stake in student loan burden: 

Three things are noteworthy about the federal government's decision to halt the issuance of Perkins college loans for Delaware State University students.

The first is the odd quirkiness of the federal bureaucracy. DSU is losing the ability to issue low-interest Perkins loans designed for low-income students because a high percentage of students defaulted on their loans. However, DSU does not issue that many Perkins loans. The default rate at Goldey-Beacom College is lower, but the amount of money defaulted is much higher. DSU suffers because it does not issue that many Perkins loans. Goldey-Beacom does not suffer because it issues more loans and it has a lower default rate.

The lesson here is that if you are willing to play the federal aid game, you must obey the federal rules. Click here: http://www.delawareonline.com/story/opinion/editorials/2014/02/25/colleges-need-bigger-stake-in-student-loan-burden/5815795/

3. Sallie Mae Student Loan Horror Stories Brings a Slap on Wrist: 

One in 10 borrowers defaulted on their federal student loans in the first two years after graduation, with one in seven defaulting in the first three years, the Department of Education reported last week. These defaults often lead to debt-collection methods including late fees and penalties and the garnishing of wages, federal tax refunds and even Social Security and disability payments.

But even while many seem to get the shaft by being stuck in a cycle of ever-increasing student loan debt, lender Sallie Mae has been making record profits — even as it has been found violating laws and its own contractual obligations to the federal government, according to a report released in January by the National Consumer Law Center. Read more: http://www.thestreet.com/story/12457243/1/sallie-mae-student-loan-horror-stories-brings-a-slap-on-wrist.html

Student Loan Blog Posts:

 1. Have You Dealt with a Student Loan Debt Collector? Tell CFPB 

Tens of millions of Americans are carrying some $1.3 trillion in student debt as the cost of higher education has soared and needs and non-loan financial aid has dried up over the past quarter of a century. In addition, more than 7 million students and former students are in default on their college loans, according to the Consumer Financial Protection Bureau (CFPB).

When that happens, many student loan borrowers find themselves on the receiving end of a call from a debt collector and have a tough time understanding their options when trying to find a way out of default. We all know, some from personal experience, that sometimes collection agencies can use threatening, intimidating and even unethical or illegal tactics. More info: http://www.aflcio.org/Blog/Economy/Have-You-Dealt-with-a-Student-Loan-Debt-Collector-Tell-CFPB

2. The Hefty Yoke of Student Loan Debt: 

Delinquency in consumer debt has reached its lowest point in five years, with the exception of student loans, the Federal Reserve Bank of New York reports. Until 2009, young adults with student debt were more likely to own homes than people of the same age without them; and they also were more likely to have car loans and higher credit scores. Now, the opposite is true: those carrying student loan debt are less likely to take out a mortgage or have auto loans, and their credit scores are poorer. Young adults with student debt also are more likely to be living with their parents.

With most personal loans, those who owe the most are more likely to default; but the opposite appears to be true for student loans. “This suggests that borrowers who default are overwhelmingly noncompleters,” said Rohit Chopra, student loan ombudsman for the Consumer Financial Protection Bureau. “These borrowers take on some debt but do not benefit from the wage increase associated with a degree.”  See more at: http://www.responsiblelending.org/tools-resources/headlines/the-hefty-yoke-of-student-loan-debt.html

3. Student loan defaults widespread, and rising: 

First, the good news: According to the National Association of Colleges and Employers, U.S. firms expect to hire almost 8 percent more class of 2014 grads than they hired from the class of 2013.

The bad news: It can’t come fast enough for many attending college, because many are facing unsustainable debt and defaulting on their student loans.

Nationwide, the student loan default rate jumped this year to 14.7 percent (for those starting loan repayments in fiscal year 2010), a significant increase from 13.4 percent (for those starting repayment in 2009; for default rate background and methodology, see description at the end). Every district state saw its cumulative default rate also increase for the 2010 cohort group, though rates are typically much lower than the national average (see table, left). North Dakota’s rate of 5.6 percent for the 2010 cohort group is a small fraction of the national rate and has risen comparatively little over the past two years. Get more: http://minneapolisfed.typepad.com/roundup/2014/02/student-loan-defaults-widespread-and-rising.html

PayMyStudentLoans.com Around The Web:

1. http://messymoney.com/carnival-financial-camaraderie-olympic-hockey-edition/

2. http://www.aspiringblogger.com/aspiring-blogger-personal-finance-carnival-32/

3. http://www.saveandconquer.com/financial-carnival-for-young-adults-feb-23-2014/