Here are the best articles from around the web this week talking about student loans…
For the week ending Friday November 01, 2013
Student Loan News:
1.It's Official: Student Loan Debt Is Hurting the Economy
Most people know that the current $1.1 trillion in student loan debt weighs heavily upon the shoulders of college graduates, but how does it affect the greater economy? The notion that onerous college debt could be affecting the housing market isn't new, but the issue has been front and center lately, as Obama administration officials note the injurious effect that heavy student debt is levying on the economy.
Housing is taking the biggest hit:
In a recent speech at the ABS East conference in Miami, Consumer Financial Protection Bureau Ombudsman Rohit Chopra told a gathering of structured finance specialists that college debt is dragging down the economy. Housing is taking it on the chin, as prospective first-time homebuyers graduating with student loan debt are finding their credit profiles negatively affected. Chopra tied 75% of the decrease in household formation over the past few years to college debt. Read more: http://www.fool.com/investing/general/2013/10/27/its-official-student-loan-debt-is-hurting-the-econ.aspx
2. Get Rid of Student Loan Debt Without Paying for It:
Sixty percent of 2012 college graduates went into debt to finance their bachelor's degrees, borrowing an average of $26,500, according to an annual report released last week by the College Board. Students who pursue a master's or professional degree often add tens of thousands of dollars to that tab.
Graduates may be able to legally bypass some student loan payments, thanks to loan forgiveness programs. “I was able to use AmeriCorps to repay some of my loans and had all of my Perkins loans forgiven,” Tori Whaley told U.S. News via Facebook, referring to the national volunteer program. Details here: http://www.usnews.com/education/best-colleges/paying-for-college/articles/2013/10/30/get-rid-of-student-loan-debt-without-paying-for-it
3. Student loans, condo payment squeeze couple’s wallet:
Like many young couples, A.J. and Amy Roberts borrowed to become first-time homebuyers and to finance their college educations.
But the duo — a 32-year old broadcast technician and a 33-year old crisis counselor, respectively — in 2010 began facing a combined $1,500 monthly student-loan tab, largely linked to the master’s Amy completed that year.
With a $1,360 mortgage payment, and a stint of unemployment for Amy during the economic downturn, the pair soon began struggling to pay the bills. Main site: http://seattletimes.com/html/businesstechnology/2022117563_moneymakeoverrobertsxml.html
Student Loan Blog Posts:
1. CFPB Helped Hundreds Of Private Student Loan Borrowers Resolve Problems With Lenders: Report
Hundreds of college graduates facing hurdles repaying their private student loans are getting out of trouble with help from the Consumer Financial Protection Bureau, a new report finds.
The CFPB helped at least 330 student loan borrowers get compensation and close complaints, according to a new U.S. Public Interest Research Group analysis of the consumer agency's complaint database. Disgruntled borrowers received a median of $700 in monetary relief, although some consumers with private student debt collected as much as $75,000. Full article here: http://www.huffingtonpost.com/2013/10/25/cfpb-private-student-loans_n_4159045.html
2. As loan repayment nears, students warned to guard against default:
The first student loan payment date is quickly approaching for students who graduated from college in May.
This can be a worrisome time for new college graduates, especially after the U.S. Department of Education recently announced an increase in federal student loan cohort default rates. The national two-year cohort default rate rose from 9.1 percent to 10 percent for fiscal year 2011 — the most recent available. Iowa’s two-year rate is even higher, 12.3 percent.
Federal student loans are considered to be in default after 270 days of failure to make payments; private loans may go into default sooner. Understand more: http://studentloanslegalhelp.com/as-loan-repayment-nears-students-warned-to-guard-against-default/
3. Proposal Calls for Student-Loan Repayment System Overhaul:
Student loans in the United States have gotten out of control, but a new proposal could help stop the flood.
A policy proposal released on Monday, titled “Loans for Educational Opportunity,” identifies a number of issues with the federal student-loan repayment system in the United States and discusses its inadequacy in preventing students from defaulting on their loans after entering the workforce.
Published by the Brookings Institution’s Hamilton Project, the proposal’s authors point out that borrowing for postsecondary education has been steadily rising for decades, and that student-loan debt has surpassed $1 trillion. The proposal argues that the current system needs to be replaced by a new and improved repayment model. For much more: http://www.evolllution.com/friday-links/proposal-calls-student-repayment-system-overhaul/