Here are the best articles from around the web this week talking about student loans…
For the week ending Friday October 4, 2013
Student Loan News:
1. Student-Loan Curbs Leave Black Schools in Peril:
The President of Howard University, one of the nation's elite historically black schools, stepped down this week, highlighting the deep uncertainty black colleges are facing in the wake of new restrictions on loans on which many of their students depend.
Sidney A. Ribeau announced his retirement Monday following a sharp decline in Howard's enrollment last year, a subsequent downgrade in the Washington, D.C., school's bond rating and a steep drop in its ranking by U.S. News and World Report. The string of bad news comes as many of the nation's historically black colleges and universities confront increasing fiscal peril, said Johnny C. Taylor Jr., president and CEO of the Thurgood Marshall College Fund, which awards scholarships to students attending such schools. Read full article: http://online.wsj.com/article/SB10001424052702303492504579111771569996370.html
2. Experts Find Increased Default Rate on Student Loans Troubling:
When the U.S. Department of Education released new data this week showing that the three-year default rate on federal student loans had increased from 13.4 percent to 14.7 percent, Zakiya Smith, a former senior education policy adviser for the Obama White House, said she became “alarmed.”
The reason is because the latest default rates involve a cohort of students who began repaying their loans during a time when the Obama administration was trying to “get the word out” about various repayment options meant to help students avoid default, Smith said. Get more: http://diverseeducation.com/article/56432/
3. Student Loans: What to Consider Before Consolidating
College students relying on student loans to pay for college can easily graduate with 16 or more separate loans. Plan to borrow for graduate school, too? Add a few new loans, interest rates and bills to that list.
Each subsidized, unsubsidized, Perkins and PLUS loan borrowed each semester or quarter comes with its own interest rate and monthly statement.
Keeping tabs on every loan and figuring out exactly what is due each month can be tricky. Consolidating those loans can eliminate some of the confusion, says financial aid expert Mark Kantrowitz, publisher of Edvisors.com. Original article: http://www.usnews.com/education/best-colleges/paying-for-college/articles/2013/10/02/student-loans-what-to-consider-before-consolidating
Student Loan Blog Posts:
1. Default Rate on Federal Student Loans Climbs Again:
The percentage of borrowers who defaulted on their federal student loans within two years of entering repayment has risen again, to 10 percent, according to data released on Monday by the U.S. Department of Education.
That rate, among the cohort for the 2011 fiscal year, is up from the 9.1 percent two-year default rate set the previous year.
For the second time, the department also formally released default rates for federal student loans measured over a three-year window: 14.7 percent of borrowers who entered repayment during the 2010 fiscal year defaulted within three years, up from 13.4 percent who entered repayment during the 2009 fiscal year. Proprietary institutions had the highest average three-year default rates, at 21.8 percent, down slightly from the previous rate of 22.7 percent. Find great info: http://chronicle.com/blogs/ticker/default-rate-on-federal-student-loans-climbs-again/66985
2. Discover the path to student loan forgiveness:
Wish you could make your student loans disappear?
Student loan forgiveness programs can make it happen, but there’s a problem.
“There needs to be more awareness about these programs,” says Betsy Mayotte, director of regulatory compliance at American Student Assistance, a nonprofit that helps borrowers manage their student debt.
So the organization released a student loan forgiveness guide earlier this year on its website. The Consumer Financial Protection Bureau, a government watchdog, released its own guide last month to bring attention to the programs. Know more: http://www.spokesman.com/stories/2013/sep/29/discover-the-path-to-student-loan-forgiveness/
3. How Bankruptcy Can Send Your Student Loans Soaring:
Many student-loan borrowers who file for bankruptcy are hit by a problem: When they emerge from Chapter 13, their credit-card and medical debt is wiped clean, but their student-loan burden remains—and in many cases it has grown.
The Wall Street Journal reported Tuesday that many people who file for Chapter 13 bankruptcy are restricted from making full monthly payments on their student loans during the case’s three-to-five-year repayment period because of the U.S. Bankruptcy Code’s repayment rules. When they don’t get full payments on student loans, lenders can add interest, late fees and other penalties to the bill. Visit: http://blogs.wsj.com/bankruptcy/2013/10/01/how-bankruptcy-can-send-your-student-loans-soaring/