Smart Borrower Blog

Archive for the ‘Student Borrowing’ Category

Debt Deal Cuts Student Savings

If the current debt ceiling deal is passed by Congress on Monday as scheduled, graduate students around the country will soon be faced with pricier college loans. In an attempt to safeguard Pell grants for low-income undergraduate students, the proposed legislation would eliminate a popular interest-subsidy loan for graduate and professional students. At the present, the government pays the interest on these loans while students are in school and for six months thereafter. If the law is approved, as of July 1, 2012, graduate and professional students will be responsible for all of that interest. Neither the accrued interest or... more »

Colleges Lose Money on New Credit Card Rules

In the wake of the 2009 Credit Card Act, also known as CARD, colleges and universities have felt a dramatic drop in their income from their school-affiliated credit cards. The Federal Reserve recently reported that the total number of credit cards issued through colleges and universities fell 17 percent in 2010. In terms of income, schools earned $73 million in 2010 from these marketing deals, a 13 percent drop from $84 million in 2009, according to Bankrate.com. The decline in sign-ups for these cards is attributed to the new rules put in place in February 2010, including a major one... more »

Is Sallie Mae Beating The Odds?

Sallie Mae has had to succumb to numerous changes over the last year. Once known as the student loan lender giant, the company has had to make deep cuts, move its headquarters and refocus their business. Last year when new student loan regulations forced them out of the Federal backed student loan industry, many thought the company might not make it. A year later they are surprising analysts with higher than expected loan originations and a drop in loan delinquencies. Sallie Mae during quarter 2 of this year posted a core earnings increase of 23%. While they still posted a... more »

Relief May Be In Site For Some Student Loan Holders

An article on USNews.com reports that there are new bills in front of both the congress and the Senate that could relieve the burden of student loans for some borrowers. The two bills would allow for private or commercial student loans to be forgiven in cases of bankruptcy. College students today are faced with high tuition costs and diminishing student aid. Many parents of college students are struggling to make ends meet and cannot contribute to their children’s college educations. As a result more students are being forced to borrow and borrow more money than at any time in the... more »

New For-Profit College Rules – Are They Enough?

New rules proposed last week by the Obama Administration are designed to protect students and federal dollars from abuse at for-profit colleges. Data uncovered in the past several years has shown that students attending for-profit colleges have the highest post-graduation default rates of any higher education group. According to Senator Tom Harkin (D-Iowa), students at for-profit colleges receive roughly 25 percent of government student aid account for 46 percent of all defaults. And students of for-profit colleges only make up 10 percent of the nation’s total graduates. Senator Harkin has led five panels on this issue in the past year.... more »

Sallie Mae Slashes Interest Rates

According to an article on businesswire.com Sallie Mae, the largest private student loan lender recently announced that they will be lowering their interest rates for next school year’s loans. The Smart Option Student loan will carry a lower interest rate and have a flexible pay back plan which will give students the option of paying back some of their loan while they are still in school. With higher tuition fees and less federal aid available, it gives students a means to come out of school with less debt. According to the article on businesswire.com, Sallie Mae’s Smart Option Student loan... more »

Student Loans in Crisis

The federal government is being faced with an increasingly high numbers of student loan defaults. Just last year student loan debt passed credit card debt, and recent reports indicate student loan debt could hit a trillion dollars by year’s end. Students today are graduating with more debt than ever and just last year the average graduate exited college with a bill of $24,000, up 6 percent from the year before. The increase of student loan debt is sparring higher default rates. With the sluggish economy and many college grads having difficulty finding gainful employment, debt is not being paid back.... more »

Not All Student Debt Created Equal

Student loans have generally been considered a “good” or “safe” debt, as they are an investment and allow the borrower to significantly increase income potential. In fact, the College Board reported last fall  in 2008 the median income for those who earned a bachelor’s degree and had full-time work was $55,700. That is $21,900 more than the high school graduate median income. What’s more, the bachelor’s degree recipients were much less likely to be unemployed. So there’s no reason to worry about rising student debt, with a likely total of more than $1 trillion this year, right? Or that student... more »

Student Loan Debt May Exceed A Trillion By Years End

According to an article on NYTimes.com, student loan debt could very well pass the trillion dollar mark by year’s end. Just last year student loans surpassed credit card debt, and it did not stop there. With the economy continuing to be sluggish, coupled with colleges receiving less funding and raising their tuition, more and more students are being forced to borrow and borrow more than ever in the past. In 1993 only about half of those who graduated from college had student loan debt compared to today where 2/3 of all college grads are faced with paying back student loans.... more »

Student Loan Debt May Limit Career Options For Some Grads

According to an article on CBS Money Watch, many students graduating college today are faced with such high debt that they are not able to pick the career of their first choice because the job wouldn’t pay enough to pay back their student loans. Add credit card debt to the student loans and these young graduates are faced with pressures that generations before them never had to deal with. While smart borrowing is advocated to get an education, there are many students today that are borrowing to the max and using part of their loan money to fund a lifestyle... more »