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…
IBR Goes Digital!
An Electronic Income-Based Repayment (IBR) Application is now available and only 27 months after IBR came on line! If you qualify for Income-Based Repayment, your required monthly payment will be capped at an amount that is intended to be affordable based on your income and family size, and will be less than what you would have to pay under a 10-year Standard Repayment Plan. Why consider IBR? Well, assuming that you are not a Kardashian or heir to the Five Guys Burgers & Fries™ dynasty (I like cheese, jalepenos, mushrooms…
Private Student Loans Boom & Bust: Consumer Financial Protection Bureau Report
I have a generally low opinion of private loans, as they are typically risky and expensive for borrowers. Unfortunately, higher education is so expensive that many of us cannot cover the costs of our dream school while still avoiding private student loans. The Consumer Financial Protection Bureau (CFPB) today released the most comprehensive study of private student loans we’ve seen, including a large set of quantitative and qualitative data. The study was informed by data provided by lenders in the marketplace, existing…
New Student Loan Regulations Introduce ICR-A
The Department of Education today published proposed regulations implementing a better, faster, and stronger repayment option for student loan borrowers. Formerly known as President Obama’s Pay As You Earn initiative, it shall now be known by the absurdly non-descriptive name of ICR-A. [sigh] In spite of the stupid name, the new repayment option ROCKS (if you can get it…) There is fine print of course, but here’s the gist: Annual payments are capped at 10 percent of “discretionary income” (IBR’s…
Deal reached on student loan transparency
Good news coming from the White House today as Congress has agreed on a deal that will allow incoming students for the 2013-14 school year will be the first to receive an easy-to-understand "shopping sheet" detailing the terms of their financial aid packages. The new requirements will provide students with a clear picture of not only the net cost of their education after grants and scholarships are applied, but also an estimate of the monthly payments they will have to make following graduation to repay their federal student loans. This is…
