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November 30, 2016

Cost estimates for Income-Driven Repayment plans are unreliable

For the fiscal year 2017 budget, the Department of Education (ED) estimated that Income-Driven Repayment (IDR) plans will cost $74 billion. Actual costs will depend on how many borrowers participate in IDR plans and how much (or how little) those borrowers earn over time. After reviewing how ED produces its cost estimates, the Government Accountability Office (GAO) criticized aspects of ED’s methodology and concluded that ED’s cost estimates are not reliable.  GAO found that ED’s methods may both over- and under-state actual…

June 4, 2016

Direct Loan interest rates to be half percent lower for 2016-17

Not exactly thrill worthy but better a tiny bit lower than any higher, am I right? Federal Direct Student Loans 2016-2017 Interest Rates (For Loans First Disbursed on or After July 1, 2016 and Prior to July 1, 2017) Loan Type Borrower Type Index/10-Year Treasury Note Add-On Fixed Intrest Rate Direct Subsidized Loans Undergraduate Students 1.710% 2.05% 3.76% Direct Unsubsidized Loans Undergraduate Students 1.710% 2.05% 3.76% Direct Unsubsidized Loans Graduate/Professional Students 1.710% 3.60% 5.31% Direct PLUS Loans Parents of Dependent Undergraduate…

February 9, 2015

Administration Suggests Changes to PAYE and PSLF in Budget Proposal

Each year, the executive branch submits a budget PROPOSAL to the legislative branch.  The administration's budget serves as a starting point for negotiations in congressional committees.  To me, there is no world in which this congress passes this president's proposal precisely as it has been submitted.  More on the bizarre budget process from the Center on Budget and Policy Priorities and from the Washington Post. In my view, the substance of the budget proposal is important for two reasons:  first, it…

May 13, 2014

Heather Joins ABA Task Force to Address Legal Education Costs

The American Bar Association announced last week that it has formed a new task force to examine the costs of obtaining a legal education in the United States.  The ABA Task Force on the Financing of Legal Education is charged with looking at the cost of legal education for students, the financing of law schools, student loans and educational debt.  It will also consider current practices of law schools regarding the use of merit scholarships, tuition discounting and need-based aid.  Heather will join 13 esteemed colleagues…

March 6, 2014

Will Proposed Cuts to Public Service Loan Forgiveness Impact Existing Borrowers?

Us student loan borrowers are understandably concerned about parts of President Obama's proposed budget, but we would do well to remember that the budget proposal itself cannot, does not, and never will determine whether any future cuts to student loan forgiveness would apply to existing borrowers.  The offending document, the Budget of the United States Government, Fiscal Year 2015, is a political document.  It consists of 212 pages of budget overviews organized by agency and summary tables of the dollar amounts in question.…

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