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House to Take Up Student Loan Fix 2013 - It's a better deal at first, but student loan rates could steadily
climb and cost students more over the long haul under the plan House Republicans are considering.

Members of the Republican-led House Education and Workforce Committee planned on Thursday to finish up a bill that would keep interest rates from doubling on new subsidized Stafford loans on July 1. The GOP measure provides lower rates immediately and for the next few years, but the plan also comes with potentially higher costs for some students in coming years.

Without Congress' action, interest rates for new subsidized Stafford student loans would double from 3.4 percent to 6.8 percent on July 1. Neither party wants to see that happen, although there are strong differences in the methods to dodge that.

Under the proposal by the committee's chairman, Rep. John Kline, R-Minn., student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points.

Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014 but climb to 7.7 percent for loans in 2023. Stafford loan rates would be capped at 8.5 percent, while loans for parents and graduate students would have a 10.5 percent ceiling under the GOP proposal.

In real dollars, the GOP plan would cost students and families heavily, according to the nonpartisan Congressional Research Service. The office used the CBO projections for Treasury notes' interest rates each year.

Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.

For students who borrow the maximum subsidized and unsubsidized Stafford loans, they would pay $12,374 in interest under the Republican bill. The interest charges would be $10,867 if subsidized loans were allowed to double in July, or $7,033 if rates stay the same. The maximum available in subsidized and unsubsidized amounts is $27,000.

Graduate students and parents, meanwhile, would see interest payments reach $27,680 for four years of college under the GOP plan. If Congress keeps the rates the same, their interest payments would be $21,654 on the original maxed-out $40,000 loan, according to the Congressional Research Service report.

Democrats ahead of the hearing pledged to oppose Kline's plan and said they would offer amendments to the bill. They declined to provide further details before Kline gaveled the committee into its morning session. One idea that is popular among Democrats is to extend the 3.4 percent rate for subsidized Stafford loans for two years while leaders work on a long-term fix.

Obama's budget outline included flexible rates for student loans, pegging the interest to markets, but did not have a cap. Republicans had long pushed for the flexible rates and Kline said he would go along with Obama on that principle while adding a cap that Democrats sought.

During the 2010-11 academic year, about 7.5 million undergraduates borrowed from the subsidized Stafford loan program. In all, there were 36 million students loan borrowers through federal programs, according to the Education Department.

Source : http://abclocal.go.com

Debt a drag on UK youth - Hard times - Young adults are finding it almost impossible to break free from their parents, both emotionally and financially, as they struggle to become independent, a British study has revealed.

A survey of 1500 people aged between 18 and 30 by The Co-operative Group found that debt had become the "new normality" for their generation.

Student loans, credit cards, loans and overdrafts were the main sources of debt, with almost a third admitting they are hiding the state of their finances from their parents.

More than four out of five of those questioned are receiving financial support from their parents, needing help to buy food or repay debts.(see HERE)

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Most also turned to their parents to help find a job, give them lifts, or do household chores, the report says.

The study also revealed that 18 to 30-year-olds were earning over £7000 ($A10,645) a year less than they thought they would in relation to their age and education, while one in 10 did not feel their job matched their qualifications.

Two-fifths of those surveyed were dissatisfied with their lives, believing they should have achieved more.

Martyn Wates, deputy group chief executive at The Co-operative Group, said: "It should not be forgotten that it is these young adults who are ultimately going to shape the future of Britain for years to come, so they need support and encouragement to thrive which, in turn, will only be positive for the future of the country.

"Whilst it is positive to see that young people believe that they will one day earn a healthy salary, the survey has signposted that the earnings of 18 to 30-year-olds do not currently live up to expectations which highlights that, for now at least, this ambitious group may have to re-evaluate their ideals."

The research also revealed that one in four young adults had never climbed a tree or played the traditional British game of conkers and one in eight had never ridden a bike.

Interest Rates on College Loans on Way Up - Putting her self through school, Shayna Stevens relies heavily on student loans to pursue a degree in secondary education at Northern Arizona University.

Currently a sophomore, Stevens said she is already $40,000 in debt. She works part time during the school year and plans to take two jobs over the summer to keep that amount as manageable as possible.

"If I didn't have to take out these loans then I wouldn't have to work all these extra jobs on the side and I could focus more on my studies and actually getting the education that I'm paying for," Stevens said.

Things won't be getting any easier next year. Unless Congress acts before July 1, interest rates on subsidized student loans, for which students must demonstrate financial need, will rise from 3.4 percent to 6.8 percent.

Students don't have to pay interest on subsidized loans while in school. Unsubsidized loans, which currently have a 6.8 percent interest rate, require students to pay interest on loans from the start.

Stevens, who has both types of loans, said she plans to finish her education but has concerns about her peers. She said she already has seen friends drop out of NAU after realizing that the financial burden would be too much.

"I think there's definitely going to be a huge drop out from students who just can't afford to take on these loans anymore," Stevens said.

Serena Unrein, public-interest advocate with the Arizona Public Interest Research Group, said the average Arizona student borrower will pay $1,000 more in interest if the rates double. (see HERE)

Jennifer Johnson, a senior at Arizona State University who took out subsidized loans throughout college, said that with the current interest rates she will be paying close to $2,000 in interest over a 10-year period.

"Doubling it to $4,000, I just can't even imagine," Johnson said.

Tucsonan Ann-Eve Pedersen, president of the Arizona Education Parent Association, said she has talked with parents who won't be able to send their children to college because of the rising cost not just of loans but tuition.

"We're just making higher education unaffordable, but we know that all of the quality jobs now and definitely in the future are going to require higher education, so we're moving in the absolute wrong direction as a state," Pedersen said.

Unrein said that the increased interest rates could also influence the decisions students make after college. She said that those with a lot of debt may choose to not go into lower-paying careers such as teaching or working for nonprofits.

"We need people to go into careers as teachers, as first responders, and if we're saddling people with the kind of debt that makes it impossible to go into those careers then that leaves our state in a world of harm," Unrein said.

The interest rates on subsidized loans were set to double last year as well. Just before the deadline, Congress passed a one-year extension of the 3.4 percent interest rates.

Megan McClean, director of policy and federal regulations with the National Association of Student Financial Aid Administrators, said that another one-year extension is unlikely.

"Last year, extending it for one additional year cost $1 billion, and I'm sure you know that that money is hard to come by in these particular times that we're in," she said.

McClean said that Congress and President Obama are looking for long-term solutions. In Obama's fiscal 2014 budget, he called for student-loan interest rates to be set each year based on the current market rate.

"I think from a broader standpoint … we need to find a long-term sustainable solution versus these quick fixes," McClean said.

Amid national discussions on college affordability, Sheila Shelton decided to return to college after 30 years. She took out subsidized loans to pay for an education degree at Phoenix College. (see HERE)

"If it doubles, I don't know if I'll be able to pay it all back," Shelton said. "It'll be a lifetime. I'm already over the age of the average student."

However, Shelton said that she won't let the increase postpone her dream of being a special-education teacher.

"It's going to be a challenge, but at this point I'm up for the challenge," she said.

Loan types

Subsidized

• Recipients must demonstrate need.

• The U.S. Department of Education pays interest: while a recipient is in school; during the six months after the recipient leaves school (only applies to loans disbursed before July 1, 2012); or during a period of deferment.

• Currently have an interest rate of 3.4 percent.

Unsubsidized

• No financial need necessary.

• Students are responsible for paying interest from the outset.

• Currently have an interest rate of 6.8 percent.

Source: Federal Student Aid Office of the U.S. Department of Education

Student loans may make recent grads hesitant 2013 - Student loan debt is a troubling and not-so-

A recent Princeton study conducted by Fenaba R. Addo suggests that student loan debt could possibly leave some partners with cold feet — particularly men.

The study suggests women who have accumulated student loan debt are less likely to marry as opposed to men in the same financial predicament. Although this seems strange, there are some explanatory theories, as well as controversy from both sides of the argument.

“One interpretation of this study might suggest that women with more debt are more likely to be

Source : www.dailyhelmsman.com

Watch Out for Student Debt Time Bomb 2013 - The American dream of a college education is turning into a nightmare for too many people. More jobs require a college degree, yet the percentage of unemployed and underemployed college graduates age 25 and younger is at its highest in 11 years.

Meanwhile, college costs are soaring, in part because cash-strapped states have less to give to public universities. And parents who’ve lost jobs or home equity after the financial crisis can’t support their children’s college costs as they planned.

The average total student debt load increased to $27,253 in 2012, a 58% jump during a seven-year period when debt as a whole rose 16%. More than 1 million adults have student debt exceeding $100,000.
Furthermore, student debt as a percentage of household debt has gone up to 8.5%, nearly three times what it was in 2003. The $870 billion now outstanding in student debt (which includes federal lending) outpaces that of auto loans ($730 billion) and credit card lending ($693 billion).

“We tell young adults, if your four-year-degree debt is going to exceed the average price of a midsize car, you need to look for a less expensive solution so you don’t start your first job behind the financial eight ball,” says John Coyne, a member of the board of trustees at Mount St. Mary’s University in Emmitsburg, Md., and vice chairman of Brinker Capital, a $13.5 billion investment management firm that provides advisory services to financial advisors. (see HERE)

Coyne says families can lower higher education costs if their children first live at home and go to a two-year community college. Later, they can complete their degree at a four-year institution.

He notes that professors laid off from four-year institutions are now teaching at two-year schools either full time or part time, bolstering the community colleges’ reputations.

To help keep costs down, colleges are condensing some four-your degree programs into three years.

The Consumer Financial Protection Bureau has come out with a Web-based tool kit called “Paying for College” (www.consumerfinance.gov/paying-for-college) to help student borrowers facing high payments and lacking alternative repayment and finance options. The site includes an application for financial aid and advice on choosing a loan. There is also a worksheet that allows students to compute how much they would need for particular colleges with different aid packages.

Undergraduate and graduate students should maximize federal student loan borrowing because the plans offer repayment and loan forgiveness advantages that private loans and federal Parent PLUS loans don’t, says Fred Amrein, a Philadelphia-area, fee-only financial consultant specializing in college education funding.

Amrein warns that the federal government is starting to go after the Social Security checks of parents who fail to keep up payments on the PLUS loans, which are typically used to meet tuition and fee expenses underfunded by student loans. (see HERE)

MassMutual financial advisor Marlene Dattilo says that before parents or grandparents cosign a private student loan, they should find out what their risk is for nonpayment and how it affects their credit rating. They should also ask: If the student becomes disabled or dies, is the loan still there and who is responsible for payment?

Dattilo says the family member preparing to cosign should bring the student along for this conversation. “Many times, the parents and grandparents have not discussed money matters at all [with children],” she says. “This is a great time to start.”

Telling How to Make College Affordable 2013 - The California Senate introduced legislation this month. The Senate’s concerns surely include some basic facts: The cost of getting a college degree is no longer affordable to most young people, and even if they can afford college, they cannot get the general education courses they need to progress in their academic career. Major problems to be sure.

More universities are looking at blended learning – a form of distant education – or even at Massive Open Online Courses or MOOCs, as one possible solution. It’s true that to accommodate larger student bodies, the large lecture hall combined with some online activity makes sense. Indeed, some courses can as easily be taught outside the classroom or lecture hall.

Allowing students to learn when and where it is most convenient for them is extremely attractive. Given the widespread availability of technology, it is not surprising that the “cyberschool” approach is fast becoming ordinary and acceptable at high schools and colleges in America, Europe and in other developed nations.

But collaboration and cooperation between most universities really hasn’t taken hold. Last month, according to the Chronicle of Higher Education, Steven G. Poskanzer and David R. Anderson, the presidents of Carleton College and St. Olaf College talked “about how these two colleges could work together more closely in areas like the library, the colleges’ technology infrastructure, human resources and payroll, and, ultimately, their academic programs.” And they did it.

There was criticism that they could’ve done more … and it’s still early. But while this collaboration occurred between smaller universities, isn’t there an opportunity for all universities?

The motto of the modern day corporation, as Robert Logan and Louis Stokes wrote 10 years ago, was “Collaborate to Compete.” The basic idea is to determine your core strength or strengths and leverage them while finding ways to cooperate with others … to provide things that must be done but in which your organization has no special talent.

The purpose is to make your organization more competitive in the marketplace. (see HERE)

The concept has worked and gained widespread acceptance, at least in the corporate world, but this same philosophy seems not to be applied to nonprofits, local governments, or to universities.

In the California State University (CSU) system and other state systems there must be similar opportunities to lower the costs and increase efficiency and availability. And, for curriculum too. Each university, for example, has an undergraduate program full of courses that everyone should take in their first two years; and subsequently, courses that are duplicated – depending on the major – in each of the 17 universities that are part of the CSU system.

Are they each so unique that there cannot be collaboration – even if they are team-taught? And aren’t we able to find ways to have the best faculty use blended learning techniques to all the CSU student body? Of course we can.

Furthermore, the idea of logging on when its convenient for many students and asking questions whenever they need to without the formality – and often embarrassment of more traditional classroom settings – also has its appeal. And, according to many experts in the online field, the new media make lectures more accessible and even more entertaining.

that could reshape higher education by requiring the state’s public colleges and universities to give credit for online courses.

Social media, email, and texting have displaced personal contact in a way that would have been hard to predict just a few years ago. Electronic media have become the standard way of communicating, according to Glenn Hartz a professor of philosophy at Ohio State University (See HERE). “Assuming that the content is there, the course is now judged largely on how artfully and smoothly the elements meld together into a coherent, pleasing whole,” Hartz said.

If we really want to be more accessible, more affordable and more efficient at delivering basic college education to more students, we need to ask how we can collaborate, where we can work together, and determine what we can do that is so unique to our university that it becomes our basic mission.

In short, we must find where we can collaborate … and, using technology, better serve young people in our region, and our country.

Eger is Van Deerlin Chair in Communications and Public Policy Director, Creative Economy Initiative School of Journalism and Media Studies San Diego State University.

Source : www.utsandiego.com

5 Steps to Maintain Student Loan Debt 2013 - As student debt levels — along with delinquencies and defaults — continue to rise, borrowers need to ask:

As a recent college graduate, this Student Loan Ranger knows both my mother and I had minimal understanding of student loans in general. And banks and schools aren't doing enough to inform us, so we end up making loan decisions in the dark.

To help figure it out, Equal Justice Works recently published an e-book, Maintai Your Future, which offers five of the following ways to maintain student loan repayment.

1. There are big differences between private and federal loans. It is important to understand these basic distinctions before borrowing and too often, students and parents lack knowledge on the various types of loans and what they entail.

Here are some crucial aspects to pay attention to when deciding how to borrow:

• Keep in mind that commercial or private loans are never eligible for federal relief programs (see HERE).

• Most private loans offer variable interest rates that may start low, but can — and likely will — increase.

• Federal loans, on the other hand, qualify for federal relief programs and come with borrower protections such as fixed interest rates and deferment and forbearance in times of hardship (see HERE).

Discover the ins and outs of financial aid.

Students should exhaust the federal loans available to them before taking the private loan route.

2. Income-Based Repayment can help many borrowers repay their loans. Federal relief programs inarguably help many borrowers. Among these programs is Income-Based Repayment (IBR), which keeps the amount borrowers must pay each month to 15 percent of their income. A few things to keep in mind:

• Only Federal Direct and federally guaranteed (FFEL) loans are eligible for IBR.

• You must have a partial financial hardship, meaning the amount you owe on your eligible loans exceeds 15 percent of your discretionary income.

• Your monthly payment depends on two things: your income and your family size. When income decreases or family size increases, you pay less (and vice versa).

Explore income-based and income-contingent repayment.

• If you remain in IBR you will be eligible for forgiveness of any amount remaining on your loans after 25 years of making qualified payments.

3. Pay As You Earn keeps payments even more manageable. Launched under the direction of President Barack Obama, this program helps a ton if a borrower qualifies. Participants must be a new borrower who experiences a partial financial hardship, and must have taken out their loans on or after Oct. 1, 2007.

Participants must also have at least one loan from Oct. 2011 or later. This includes: receiving a new loan, receiving a disbursement on an existing loan, or consolidating loans on or after Oct. 1, 2011.

Under Pay As You Earn, monthly payments are capped at 10 percent of discretionary income. As long as participants remain in the plan, they will be eligible for forgiveness after making qualifying payments for 20 years (see HERE).

4. Public Service Loan Forgiveness helps public interest workers with lower salaries. Public Service Loan Forgiveness (PSLF) motivates and helps individuals to work in the public sector. Borrowers must have Federal Direct loans to be eligible, and must be working in a full-time public service job, such as with a local, state, federal or tribal government or a nonprofit.

Participants must make 120 qualifying payments on those eligible loans while employed in public service. After making those 120 qualifying payments, submit the PSLF application for forgiveness. As a bonus, forgiveness receives through PSLF is not taxed.

5. Loan Repayment Assistance Programs can help with payments. Take advantage of Loan Repayment Assistance Programs (LRAPs). If you're eligible, LRAPs provide funds toward your monthly payments. And you may be able to use those funds for your private student loans. Ask your employer, school, and even your professional association if they offer an LRAP. There are even some available from state, local and the federal government.

Learn how to evaluate an LRAP.
Download Maintain Your Future, available in the Kindle Store, to learn more about these options and weave your way through the student debt maze — whether you're just starting to borrow or already in repayment. Every borrower should be informed when making decisions that will affect your future.

Cheap Budgets With Different Effects On Student Loans 2013 - Among a number of other dissimilarities, federal budgets proposed by Democrats and Republicans in Congress offer varying effects for students involving federal financial aid and education funding.

Democrats in the House of Representatives’ House Budget Committee announced an alternative budget plan Monday in response to the budget released March 12 by House Budget Committee Republicans, according to a Monday press release from the committee.

Over 300K Student frustration with Studylink - Government call centre Studylink is battling to cope with the number of inquiries from students their about loans and allowances. The help line has dropped nearly 300,000 calls in the last five months, and students' frustration is mounting as they struggle to get answers to their questions.

Student Melissa tried to make contact via the Studylink website(see here), but was told "the only way to do anything is over the phone". 

"So I've rang up and I cant get through to them. I've called them at eight o'clock in the morning and all throughout the day and I cant get through," she said.

It's a similar pattern across the country. Head of Studylink Susan Kosmala said it is unfortunate some students have trouble getting through.  

"That's not the service we aim to provide. We are continuing to make improvements to answer as many calls as we can," she said.

Victoria University Students' Association president Rory McCourt said the problems mean some students have to make difficult choices. "What we're finding is students who are out of luck with Studylink coming through with their allowance or student living costs, they're facing choices like spending nights at the night shelter, desperately hunting for flats - but its very hard to get into a flat when you can't front up with the cash," he said. In the last five months Studylink has answered nearly 430,000 calls, but a further 300,000 weren't answered. The figure is actually an improvement of more than a 100,000 on the same time last year. Studylink told ONE News this is its busiest time of year. It is processing 310,000 student loan and allowance applications (see more here) and has employed an extra 330 staff.

But that might not be enough, McCourt said.

"Students have trouble with Studylink every year but this year is especially bad we've found.

"A lot of people just dont get through at all, they get hung up on when they do and the online support just isn't adequate. We understand that Studylink is doing their best but the Government needs to acknowledge that this is a problem year in, year out and it needs more resourcing," he said.

Melissa's course costs have been paid by Studylink, but she still hasn't received the part of her loan she needs for living expenses and so cannot afford this week's rent. 

"It's made it a lot more stressful than it needs to be. I have not been able to buy some of my books because I haven't had my payment yet," she said. She's been to Work and Income to try and talk to someone face to face, but was told she had to make an appointment by phone, through Studylink. Studylink recommends to use its website as much as possible.

Source ONE News

Do you have student loans? Learn Your Options - College loans can be a bear for veterinarians. An article in the Express-News Business section pointed out the growing number of practicing vets across the country who have large college loans. They're not alone.

According to Think Progress, a political blog sponsored by the Center for American Progress, the number of students who go into debt to get a bachelor's degree has risen from 45 percent in 1993 to 94 percent today. In 2010, student loans surpassed credit cards as the largest source of debt for Americans and now tops $1 trillion.

Source: http://www.mysanantonio.com