Dept of ED Throws Consumers Under the Bus
The Department of Education barely bothers to pretend it has the best interests of student loan borrowers in mind anymore. In announcing its intent to cut the Consumer Financial Protection Bureau out of federal student loan servicing oversight, ED admits that it is declawing the CFPB because the CFPB had the nerve to actually handle borrower complaints. How dare it? In a half-hearted attempt to spin its obviously anti-consumer announcement, ED asserts that the CFPB's efforts on behalf of borrowers add "confusion".…
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…
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…
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.…
Enrollment in Income-Driven Repayment is Up
Nerds like me will want to check out recently released updates to the Department of Education’s Federal Student Aid Data Center for reports including outstanding balances and recipients by loan program, loan type, loan status, repayment plan, and delinquency status. Unemployment and economic hardship deferments are down 31.5 percent from the previous year, as enrollment in income-driven repayment plans has increased. As of December 31, 2015, approximately 4.8 million borrowers are enrolled in Income-Driven Repayment plans.
