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Archive for the ‘Private Student Loans’ Category

Student Loan Debt Reaches Record Levels

Total student loan debt in the U.S. has surpassed national credit card debt, according to new figures from the Federal Reserve Bank of New York. New student loan funds borrowed last year grew to $100 billion dollars, a record high, and now total outstanding student loan debt has reached $1 trillion for the first time in history. Full-time undergraduate students borrowed an average of $4,983 last year, according to the College Board. That figure is more than double the average from 10 years ago, after adjusting for inflation. In the wake of the current economy, default rates on student loans... more »

Student Default Rate Makes Sharp Rise

Student loan borrowers are defaulting at a much higher rate, according to a new study from the Department of Education. This is yet another testament to the bleakness of the job market, as well as falling graduation rates. The Department of Education reported that the rate of default stood at 8.8 percent in 2010, up from the 7 percent in the fiscal 2008 year. Student loan borrowers at for-profit colleges performed the worst in that group. For the roughly 1 million students whose first payments were due October 1, 2008, 15 percent were more than 270 days late on their... 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 »

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 »

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 »

Consumer Group Calls for More For-Profit College Regulation

For-profit colleges received another poor review for their student loan practices in a recent study from the National Consumer Law Center’s Student Loan Borrower Assistance Project. The report titled “Piling It On: The Growth of Proprietary School Loans and the Consequences for Students” dings for-profit schools for creating private student loans with high fees and “predatory” terms, while criticizing the government for its lack of regulation of the situation. The main problem seems to stem from the “90-10” law that requires for-profit schools to prove that at least 10 percent of their revenue comes from non-federal student loan sources. In... more »

For Profit College Student Loan Defaults Projected to Approach Fifty Percent

New data released by the Education Department this week shockingly shows projected student loan defaults from for profit colleges is approaching 50%. 46.3% of federal loans that were taken out by students attending for profit colleges and universities in 2008 are expected to go into default. This number is well above the national average of all colleges which is 15.8% for loans originating in 2008. Some are now paralleling this crisis to that of the mortgage market. Just as home loan lenders lured home buyers into risky mortgages they could not afford, higher educational institutions have been doing the same... more »

New Grads Have More Debt, Less Opportunities

Graduating from college is supposed to be an exciting time, filled with hope about the future and its many possibilities. Unfortunately, that is not the case in general for today’s graduates. A new study by the Project on Student Debt and reported on CNN Money.com, says that student debt is rising and the number of grads finding jobs is shrinking. Students who graduated from college in 2009 from either public or not-for-profit private schools carried an average student loan debt load of $24,000, a 6 percent increase from the previous year. Perhaps that wouldn’t be a noteworthy change if this... more »

Private Student Loan Web Tool: Available for Students in 12 States

Twelve states have recently launched a new website to assist college students in obtaining privately funded student loans. Colleges and Universities in partnership with their states and private student loan lenders in the states of Ohio, California, Maryland, Pennsylvania, New York, Indiana, Michigan, Kentucky, Mississippi, Tennessee and Alabama are trying to ease the burden placed on students who need private college funding. Students can now visit the new website, The Student Marketplace and be able to compare private funding options all in one place. The website is set up to first direct students to sources of federal aid and funding.... more »

Americans Now Owe More on Student Loans than Credit Cards

Student loans now comprise a bigger chunk of American consumer debt than do credit card charges, according to recent data from Mark Kantrowitz, of FinAid.org and FastWeb.org, a somewhat unexpected finding considering the rough state of the economy. Kantrowitz asserts that as of June, Americans owe about $826.5 billion in revolving credit (most of which is credit card debt), while student loans, both federal and private, all together have now grown to $829.8 billion. This economic twist has apparently caught many by surprise. “The growth in education debt outstanding is like cooking a lobster,” Mr. Kantrowitz said as quoted on... more »