Consumer Financial Protection Bureau Issues Annual Report on Student Loans
The Dodd-Frank Wall Street Reform and Consumer Protection Act established an ombudsman within the Consumer Financial Protection Bureau. Pursuant to the Act, the ombudsman prepares an annual report and makes appropriate recommendations to the Secretary of the Treasury, the Director of the Consumer Financial Protection Bureau, the Secretary of Education, and to Congress. The first annual report on student loans was issued yesterday and for those of us who follow the industry closely and who listen to frustrated student loan borrowers…
Is College Still Worth It?
So legendary rocker, Alice Cooper, is your hero and "School's Out" is your new ringtone? Sing it with me... School's out for summer School's out forever School's been blown to pieces No more pencils, No more books No more teachers' dirty looks Yes, we've all probably dreamt of fleeing our classrooms and their prisonlike walls for the freedom of summer and all it entices us with, but the reality is that upward mobility is our society is contingent upon higher education. Who can forget former Republican presidential candidate…
Cooking the Books: For-Profit Schools Look For Ways to Avoid Government Sanctions
In an editorial that appeared yesterday in The New York Times, the paper's editors pointed out a troubling problem for student loan borrowers, especially those contemplating or already enrolled at for-profit colleges and institutions - misleading advice. Facing possible sanctions and loss of all federal student aid for colleges whose graduates have default rates of 30 percent or higher over three consecutive years or 40 percent in any one year, some for-profit schools have resorted to recommending "default management" programs (aka…
Presidential Candidates Debate Higher Education
Last night’s first presidential debate included several references to higher education but few new policy statements from either candidate. President Obama highlighted his funding of the Pell Grant program using savings created by the administration’s removal of banks and private lenders from the federal student loan programs. Former Massachusetts Governor Mitt Romney pledged not to cut spending on Pell Grants, although the Pell Grant program repeatedly faces funding crises. President Obama argued that that Romney could…
Student Loan Default Rates Rise, Income-Based Repayment Can Help
The Department of Education just released statistics showing that student loan defaults rose to an average of 13.4 percent last year, with 22.7 percent default rates for students who attended for-profit colleges. But the data we have on student loan default rates isn't anywhere close to complete. Meet the “Cohort Default Rate,” that measures only those defaults that occur soon after a student loan borrower begins repaying his or her loans. At least the cohort has recently been expanded to include…
