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

For the week ending Friday March 21, 2014

Student Loan News:

1. Students should question the risk, terms of dangerous private loans:

College is an exceptional time in our lives when we can partake in activities that society otherwise frowns upon, such as drinking Keystone beer and playing hacky sack in public. One potentially ruinous side effect of pursuing a higher education, though, is taking out the loans to pay for it.

According to a May 2013 estimate by the Consumer Financial Protection Bureau, there are $1.2 trillion in outstanding student loans in the U.S. Student loans now make up the second-largest sum of debt held by Americans, behind mortgages. The swelling bubble of student debt is a well-trod narrative — rising costs of school combined with declining job prospects make post-grad financial realities difficult — but a less-explored dimension of student loans is the market forces behind them. Know more:

Student Loans Concept

2. Why Most Student Loan Debt Advice Is Bad or Just Wrong: 

As a consumer debt expert it is exceedingly frustrating hearing from people all around the country on a daily basis who are seeking good help for their student loan troubles, only to get really bad advice, or worse, ripped off.

The scammers are ahead of the experts on selling student loan solutions. It's not unusual at all for me hear from people who were charged $20,000-$37,000 for student loan help that's available for free. I've got a couple of those client agreements sitting right here on my desk as I write this. Quite frankly the reason the scammers do this is because unaware consumers are easy pickings.

Even student loan servicers are giving horrible advice. Call me cynical but one reason might be the servicers and collectors earn more by not telling you how to reduce or eliminate your loans for free. In fairness, I have observed some employees at some loan servicers trying to give best advice. Find more:

3. Gainful Employment Rule And Student Loan Debt Counseling: A Perfect Match? 

New regulations that will impose severe requirements on for-profit colleges and career training programs may open the door to an increased need for independent third-party student loan debt counseling. On March 14, 2014, the Obama administration released its “gainful employment” rule that would establish student-loan default thresholds that, if exceeded, could lead to schools losing access to student financial assistance programs authorized under Title IV of the Higher Education Act of 1965, as amended (HEA).

The 841-page rule uses student-loan default rates to determine whether a program's students are burdened with unpaid debt. Programs with a cohort default rate higher than 30% for three consecutive years may lose access to federal financial aid. Training programs could lose funding if the annual education-debt payments of typical graduates exceed 20% of their discretionary earnings or 8% of their total income. Schools that fail to comply for two out of three years would lose eligibility for funding. At the same time, the Department of Education predicts one million students will lose access to post-secondary education. Get more:

Student Loan Blog Posts:

 1. As Many As 1-in-3 Student Loans May Be Delinquent: 

Over the years, Consumerist has reported on student loans and the crippling impact their debt can have on recent graduates. But with rising tuition costs and financial aid opportunities becoming increasingly competitive it’s easy to see why student loans are a necessity for entering college. A new report claims that overall loan delinquency rates are declining, but a closer look at the numbers may reveal a problem that is much worse than previously believed.

The newest Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit highlights the fact that loan-payment delinquency rates are improving, but’s review of the data turns up some potentially frightening numbers

The FRBNY report [PDF] notes outstanding student loan balances increased to $1.08 trillion as of Dec. 31, representing an increase of $114 billion for 2013. Go there:

2. Graduate Student Loans Regulations Proposed by Obama: 

The Obama administration took new steps on Friday and proposed “gainful employment” regulations to hold for-profit colleges and other career training programs accountable for producing graduates who can earn enough money to pay back student loans.

The regulations are intended to protect students from amassing large amounts of student loan debt that they will not be able to pay off after graduation.

“Career-training programs offer millions of Americans an opportunity they desperately need to further their education and reach the middle class,” Education Secretary Arne Duncan told reporters in a conference Thursday, a day before the official announcement of the “gainful employment” program. Original article: Around The Web: