Relief for Student Debtors Editorial
Three cheers for the New York Times and its recognition that there is no reason to extend special protections to private lenders of student loans! The Times recently published an insightful editorial calling attention to problems associated with expensive private student loans and the "undeserved advantage" private student loan lenders currently enjoy over other issuers of unsecured credit. I support the pending bills sponsored by Senator Dick Durbin, Democrat of Illinois, and Representative Steve Cohen, Democrat of Tennessee, that would…
The Scoop on Student Loan Consolidation
Why would I consolidate? Heads up government and nonprofit workers: consolidation can get your federal loans into Federal Direct so that you can participate in Public Service Loan Forgiveness. · Only Federal Direct loans are eligible for Public Service Loan Forgiveness. That’s one very good reason to consolidate. · Consolidation allows you to group your loans together with one lender. · …
Public Service Loan Forgiveness is Secure(ish)
The folks in Washington, DC are looking to save money wherever they can. I've been hearing from a lot of worried borrowers wondering, "Can I count on Public Service Loan Forgiveness to last?" My answer? Um, maybe. Probably. I think so. Public Service Loan Forgiveness doesn't exactly cost money Because only Federal Direct Loans are eligible for Public Service Loan Forgiveness, the United States Department of Treasury never writes a check to anyone. Instead, when a borrower qualifies, the…
5 Traps for Unwary Student Loan Borrowers
On the one hand, Public Service Loan Forgiveness is easy. Just 1) make the right kind of payment, 2) on the right kind of loan, 3) while you are in the right kind of job. 4) Repeat 120 times, and 5) prove it. But the devil is in the details. Payments made under many “standard” repayment plans don’t count towards forgiveness. Payments that are more than 15 days late don’t count toward forgiveness. Many borrowers must consolidate or reconsolidate into Federal Direct Loans in order to have the “right kind of loan.”…
Budget Control Act Makes Student Loans More Expensive
Last night, the House of Representatives passed the Budget Control Act of 2011 and the Senate is expected pass the Act today. The Act provides for: Elimination of the in-school loan interest subsidy for graduate and professional students beginning July 1, 2012. Elimination of Direct Loan “repayment incentives” (reduction in interest rates for on-time payments) for new loans disbursed on or after July 1, 2012. Additional funding for the Pell Grant program for the next two fiscal years. The elimination of the graduate and professional…
