Here are the best articles from around the web this week talking about student loans…
For the week ending Friday June 28, 2013
Student Loan News:
1. Regulators seek flexibility from private student loan lenders:
Regulators on Tuesday called on private student loan lenders to offer more flexible repayment terms to borrowers at a time when many are struggling to pay off their debt.
Testifying before the Senate Banking Committee, federal regulators said private student loans constitute a small portion of overall student debt, but many people are struggling to repay their loans and delinquency rates for such loans are high.
“It's absolutely important that we address the large population of existing private loan borrowers. Many of those borrowers are certainly victims of the bad economy that they had no role in creating,” said Rohit Chopra, student loan ombudsman at the U.S. Consumer Financial Protection Bureau. Main article: http://www.reuters.com/article/2013/06/25/us-usa-studentloans-regulators-idUSBRE95O1GB20130625
2. Student Loan Refinance Market Should Get Government Boost, Top Regulator Suggests:
The U.S. government should help to develop a market for student loan borrowers to refinance high-cost debt in order to allow younger households to benefit from the Federal Reserve’s efforts to provide cheaper borrowing, a senior regulator has suggested.
Rohit Chopra, the official responsible for student loans at the Consumer Financial Protection Bureau, is due to tell lawmakers on Tuesday that if harmful market practices such as poor loan servicing or structural impediments such as a concentrated credit sector are not addressed, “there may be a negative impact not just on consumers, but also on the broader economy,” according to prepared remarks he plans to make at a Senate Banking Committee hearing. Official Site: http://www.huffingtonpost.com/2013/06/24/student-loan-refinance_n_3492566.html
3. Bipartisan Senate group forges student loan proposal:
A bipartisan group of senators on Thursday will propose a compromise bill on student loan rates — a bid to end a stalemate that, if unresolved, would allow rates to double on Monday.
The proposal from three Republicans and Sens. Joe Manchin, West Virginia Democrat, and Angus King, Maine independent, would tie rates to Treasury notes a method preferred by House Republicans while locking in rates for the length of the loan, an aspect that President Obama supports. Original article: http://www.washingtontimes.com/blog/inside-politics/2013/jun/26/bipartisan-senate-group-forges-student-loan-propos/
Student Loan Blog Posts:
1. Students caught in the crossfire as Congress debates college loan rates:
Satin Tashnizi has already had to compromise on her future. Financial obstacles have chipped away at the 18-year-old’s dream, and unless Congress takes action in the next week to prevent a big jump in student loan interest rates, it may just crumble altogether.
Since Tashnizi, a Salt Lake City resident, turned 14, she’s wanted to be a heart surgeon and set her sights on studying at the University of Massachusetts Amherst.
She received an acceptance letter last year but quickly realized she couldn't afford the extra $20,000 annually in out-of-state tuition, even with a combination of federal grants and loans. Details: http://www.sltrib.com/sltrib/politics/56510977-90/congress-interest-loan-loans.html.csp
2. 5 Things You Probably Didn't Know About Private Student Loans:
Taking on student loan debt can be a good long-term investment for some professions, but not all student loan debt is the same. Students typically have two main options when it comes to borrowing money: a federal student loan or a university payment plan. What many have started to consider as a third option, is a private student loan from a bank or credit union.
With the current student debt total at $1 trillion, it's a topic worth knowing a little bit about. If you're considering a private student loan, here are a few things you need to keep in mind. Discover main site: http://www.businessinsider.com/heres-why-you-dont-want-private-student-loans-2013-6
3. Easy Credit Is Inflating a Massive Student-Loan Bubble:
Americans are still talking about the recently deflated housing bubble, but there’s a new bubble in town. It’s the student loan bubble and when this one pops, it might dwarf the wreckage we've witnessed in the real-estate markets.
In the latest news, the Federal Reserve’s Board of Governors warned that soaring student-loan debt has “parallels to the housing crisis,” according to a May report in Bloomberg. As with housing, free-flowing cash will lead to widespread default. Of course, it’s easier to repossess a tract house than to take back a potentially worthless degree. Visit: http://reason.com/archives/2013/06/21/easy-credit-is-inflating-a-massive-stude