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Archive for the ‘Federal Student Loans’ Category

Student Loan Holders: Are You Aware of Federal Income Based Repayment Programs?

It is that time of year, college graduation time. Students across the country are being handed their diplomas. While it is a time of great accomplishment, it is also a time to start thinking about paying back the student loan debt that you have accumulated during your college years. What many student loan holders do not realize is that there are programs available to help ease the burden of paying back student loan debt. This year’s grads as well as other student loan holders can qualify. The Federal income based repayment program was updated last July to help those... more »

Student Loan Reform Leads Sallie Mae to Cut 2,500 Jobs

Sallie Mae, the nation’s largest student loan lender, has announced that it will be cutting a total of 2500 jobs–1200 of which will be before year’s end. Sallie Mae’s Killeen, Texas service center and Sallie Mae’s Panama City, Florida service center will both be shutting their doors. The remainder of the cuts are yet to be determined but are scheduled to take place sometime during 2011. According to Sallie Mae the cuts are part of the company’s forced restructuring due to new student loan reforms. Just recently congress ended the FFELP program (Federal Family Education Loan Program) which had... more »

Student Loan Bill Passes the House

Update March 25th, 2010: The Senate also approved the bill , all but assuring it will become law. This past Sunday, the House passed the largest student loan overhaul seen in decades. Under the new legislation, federal backing of private student loan lenders will end, and instead the federal government will be funding student loans. While private companies will still help in servicing the loans, the federal government will now be issuing them. The savings for this program is in the billions. Just over $60 billion over ten years is the projected savings according to the Congressional Budget Office. The... more »

Student Aid Bill: Will It Finally Pass?

The student loan bill is back in the news this week. The bill that would put the government in charge of dispersing student loans instead of commercial lenders passed by the House last year but has yet to pass in the Senate. Private lending lobbyists have been working overtime to stop the bill, and have succeeded in the very least by stalling it in the Senate. The bill was originally predicted to save the federal government around $87 billion over a ten year time period. New cost saving estimates show that the number may be closer to $61 billion. Currently... more »

Obama Announcing Initiative to Ease Student Loan Burden

With the economy in shambles and unemployment all over the country at an all-time high, college grads, especially recent ones, are struggling to pay back their student loans. For those struggling, there is some good news. Help may be on the way. Obama is expected to announce at the State of the Union Address new initiatives to help the struggling middle class. College graduates who have student loans would be one of the benefactors of his plan. Currently, recent graduates spend 15 percent of their disposable income just to pay their federal student loans each month. Payments on some loans... more »

Government May Nationalize Student Loans

There is a new bill being kicked around in Congress that would essentially exterminate the private student loan industry, paving the way for the government to make all loans directly to college students. It’s called the Student Aid and Fiscal Responsibility Act and it calls for the elimination of the Federal Family Education Loan (FFEL) program that has created millions of dollars of subsidized student loans each year. Here’s how subsidized loans work: The government encourages lenders to loan money to students at low rates by promising to make up any profit losses or to repay the money if a... more »

New Statistics Show High Federal Student Loan Default Rates

The Education Department recently released data on Federal student loan default rates gathered from over 5000 colleges and universities across the country. The data showed shocking high rates of recent grads who had defaulted on their college loans within the first three years of repayment. The stats covered those students who were scheduled to begin payments in 2007 and by the end of fiscal year 2009 had defaulted on their loan. The figures further showed that the highest percentage of default rates was from those students who attended for profit schools. In fact, default rates at these institutions were three... more »

Is That All She Wrote for Private Student Loan Lenders?

The Student Aid and Fiscal Responsibility Act, currently moving through Congress, would stop the FFELP (Federal Family Education Loan Program). The FFELP has allowed third party (private) lenders to issue student loans which are backed by the government. In 1992, the Federal Direct Student Loan Program began, which allowed parents and students to borrow directly from the U.S. Department of Education without a FFELP lender or involvement from a bank. If the Student Aid and Fiscal Responsibility Act is passed by Senate vote, critics of the act argue that it will put most private student loan lenders out of business... more »

Ten Percent of Community College Students Do Not Have Access to Federal Student Loans

According to the Project on Student Debt, there are about 900,000 students at community colleges in 31 states who do not have access to federal student loans because their colleges do not participate in federal loan programs. What’s more, 362,000 community college students (2 out of 3 students) who do have access to federal loan programs took out private student loans during the 2007-2008 school year, instead of using the more affordable and safer federal student loan options. This decision to fund education with private student loans may be due to deceptive marketing practices of some private lenders, as well... more »

Student Aid and Fiscal Responsibility Act Ends Government-Backed Private Student Loans

In the past, the federal government guaranteed student loans that were financed by private lenders. Recently, the U.S. House approved a money-saving move that will stop guaranteeing private lender loans and replace them with student loans that are financed through Treasury funds and that are therefore less expensive. This will save the government an estimated $80 billion over a 10 year period. How will the government use the $80 bill in savings? The savings are meant to provide larger grants and more grants to lower-income students for their college expenses, and to increase federal aid available to community college students.... more »