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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…

March 29, 2016

Latest CFPB Effort to Improve Things for Student Loan Borrowers: “Payback Playbook”

Student loan borrowers struggle mightily to get information tailored to our specific circumstances.  Ever get a form letter from your student loan servicer that left you scratching your head? Advocates at the Consumer Financial Protection Bureau (CFPB) are working to improve the way loan servicers communicate with us about our loans with the goal of giving consumers real-time, up-to-date information about our repayment options.   The CFPB has released new Payback Playbook prototypes (say that six times fast) and they want our feedback.…

By Heather  |  Category:  Student Loan Policy, IBR, Student Loan Repayment  

August 25, 2015

Student loan servicers screwing 30 percent more troops and counting

When will the loan servicers stop the nonsense? Why isn't the Department of Education holding their feet to the fire? Consider this.  The Department of Justice (Justice, not Education), documented that Sallie Mae has been overcharging interest to active duty members of the military since 2005, in violation of the servicemembers Civil Relief Act (SCRA). According to the Federal Deposit Insurance Corporation (FDIC), Sallie Mae also illegally maximized borrower’s late fees and misrepresented how borrowers…

By Heather  |  Category:  Student Loan Policy  

June 18, 2015

Three Cheers for Rohit Chopra, CFPB Student Loan Ombudsman!

Hip hip!  Hooray!  Rohit Chopra stood up for student loan borrowers during his four-year tenure as the first ever Consumer Financial Protection Bureau's Student Loan Ombudsman.  I thank you, Mr. Chopra.  The Chronicle of Higher Education reports that Mr. Chopra will step down from his post next week.  In his resignation letter, Mr. Chopra wrote, "I am proud of the progress that we have made together to assist borrowers, promote transparency, and hold accountable those who break the law.  While more…

By Heather  |  Category:  Student Loan Policy, Private student loans  
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