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…
Misinformation and Miscommunication Between Borrowers and Loan Servicers
The National Association of Student Financial Aid Administrators (NASFAA) surveyed financial aid administrators finding a “large amount of misinformation and miscommunication between borrowers and the student loan servicers that collect their monthly payments. ”Financial aid administrators have a front seat when student loan servicing goes wrong -- and when it goes right,” said NASFAA President Justin Draeger. “These recommendations are built on the experiences and observations from professionals who want to ensure all borrowers…
Rohit Chopra and CFPB Piss Off Private Student Lenders
Ombudsman Rohit Chopra of the Consumer Financial Protection Bureau (CFPB) can sleep soundly at night knowing he is doing something right. The Wall Street Journal quotes Richard Hunt, president of the Consumer Bankers Association, as stating “There’s more tension between banks and those in the CFPB’s student-lending division than in all other areas of the CFPB combined.” Why is the private student loan industry so pissed off? The CFPB and Mr. Chopra have persistently pushed private lenders to modify or refinance…
Expanding Pay As You Earn by Negotiated Rulemaking
The Department of Education has announced its intention to convene a negotiated rulemaking committee to develop regulations that expand the President's Pay as You Earn repayment plan by allowing more borrowers to cap their federal student loan payments at 10 percent of their income with the goal of making the expanded PAYE repayment option available to borrowers by December 31, 2015. Negotiated rulemaking is required by law for programs authorized under Title IV of the Higher Education Act of 1965 (unless the Secretary of the Department of Education…
Higher Student Loan Interest Rates are Here for New Borrowers
New federal student loan interest rates are established each summer for the loans that will be borrowed during the following school year. The interest rates are based on the 10-year Treasury rate (a benchmark figure representing investor confidence). Once you borrow, your interest rate is fixed for the life of the loan. Here are the interest rates for loans disbursed on or after July 1, 2014, and before June 30, 2015: For Direct Subsidized and Direct Unsubsidized Stafford Loans for undergraduates, the interest rate…
