Student Loan Forgiveness News & Information

Is College the Only Answer After High School?

Is College the Only Answer After High School?

In the United States, it’s no secret that the higher education industry is not perfect. Students are leaving college with increasing amounts of debt, whether or not they left with a degree in hand. They are having trouble finding work that uses their education and pays well enough to reduce their debt. People are starting to wonder if college will propel our younger generations forward or hold them back. But isn’t college necessary to get a well-paying job and secure a place in the middle class? After all, that’s why most parents want their kids to go to college: to set them up for a successful life in which they won’t have to worry about finances. A college degree can be a golden ticket to good jobs. Or at least that was the case a few decades ago when more jobs started requiring college degrees. But there’s a growing part of the population that will argue that a college education isn’t the only path to a great, well-paying career. Most recently, Labor Secretary Alexander Acosta argued that there are options outside college. And the Trump administration is backing him up. What do you do if you don’t go to college? For starters, don’t think that bypassing the traditional college experience means you’re not required to learn. It’s still true that to get a well-paying job you need to have some knowledge or skills, which you acquire through some form of learning. But for many jobs, there’s a way to get that without racking up a lot of debt. These types of education require less time and have a greater... read more
Student Debt and the Racial Wealth Gap

Student Debt and the Racial Wealth Gap

Not all student debt is created equal. New data compiled by the Department of Education s how the permeates the realm of student loans. Student loans are often seen as good debt because the education they finance is a vehicle for economic mobility. But deep divides in wealth accumulation along racial lines show that does not prove true for everyone, especially black Americans. Default and Discrimination Black borrowers have the highest rate of default on their student loans among racial groups. Based on the Education Department’s report, black students who first entered college in the 2003-2004 school year have defaulted on their loans at a rate of 47 percent. In contrast, 27 percent of borrowers of all races defaulted in the same cohort. Black borrowers had the highest share of defaults no matter what kind of school they went to — public, private, two-year, four-year, and so on. However, it’s noteworthy that 66 percent of black students who attended for-profit colleges defaulted on their loans. That’s the highest rate among all school types and all racial groups. For-profits have faced much scrutiny regarding enrollment practices in recent years. In the worst cases, some have faced legal action for targeting black students in order to sell them worthless degrees. As for degrees, many black students don’t even attain one all. Despite being more likely to have student debt, black students are less likely to complete college. Having debt but no degree from which to benefit may be one of the culprits behind high default rates. On the other hand, racial discrimination in hiring practices persists at levels unimproved for the past... read more
Parent Borrowers Share Financial Pain Without Rewards

Parent Borrowers Share Financial Pain Without Rewards

Parents argue that nothing is more rewarding than raising children. Those rewards range from watching them learn new things and gain confidence to seeing them succeed in their many endeavors. Of course, it’s natural for parents to do everything they can to help their kids succeed. When it comes to college, many parents may go too far. Whether parents cosign on a private loan or take out federal Parent PLUS loans to cover the expected family contribution, parents are increasingly on the financial hook for an education they didn’t even get. The major justification for students taking out loans is that the funds allow them to get an education that will help them boost their earning potential, and therefore payoff potential, for the rest of their lives. When parents borrow for their kid’s college needs, they don’t see the same rewards. In fact, not only do they get no financial reward at all, they often suffer because of their efforts to help their children. Private Loans Companies offering private student loans often base lending decisions on the borrower’s credit. For a late-teens/early-20s student needing money to make it through college, credit is hard to come by. Therefore, most private lenders require a cosigner, an honor usually left to the parents. Whereas this may be necessary to send the kids to college, it often hurts the parents in the long run. For those students who find themselves in the all-too-familiar position of being unable to pay their student loan payments, it’s not just their credit that hurts. When a parent cosigns a loan that becomes delinquent, their credit score reflects... read more
Lessons From England’s Failed Free College Experience

Lessons From England’s Failed Free College Experience

Education is a driving force in any country. Many experts agree that a highly educated population drives the economy and benefits everyone, especially those that come from low-income families. So, making college free would help in that cause, right? Well, before jumping into any free college plan, we must be wary of all possible outcomes. In the case of England’s free college experience, free tuition actually reduced access for low-income students. What Happened in England? England offered free college until the late 1990s. In the 1980s, more jobs started requiring a college degree, so colleges started seeing many more people enrolling. This influx in admissions strained the colleges’ money pool, which was filled by taxpayers, until the quality of the education per student decreased substantially. In response to that hit on quality, the government capped enrollments at public colleges, and colleges became more selective in their admissions process. Students from high-income backgrounds were accepted more often than those from lower economic circumstances. Because they could afford to go to schools with greater resources, they were often the most qualified applicants and were, therefore, more appealing to colleges, who want the best and brightest students to represent them. Therefore, England began introducing tuition again toward the end of the 1990s — starting at £1,000 — and schools were then able to spend more money per student and improve college for everyone. As a result, the student income gap narrowed and more low-income students attended. Since then, tuition has increased with each administration and now they are facing another college affordability crisis. England’s failed model limited the funding English colleges received,... read more
What Would You Do to Get Rid of Your Student Debt?

What Would You Do to Get Rid of Your Student Debt?

This headline has been popping up everywhere recently: “Millennials would give up the right to vote to get rid of their student loans.” Is it true? Sort of. A recent survey by Credible asked millennial student debtors what they would do to get their student loans canceled. Some of the choices seemed pretty doable, like “not traveling outside of the country for 5 years.” But the most common choice out of the given options to eliminate student debt was “giving up your right to vote in the next two presidential elections.” What Would You Do? Now, that’s not a complete forfeiture of the right to vote. There are still local and state elections, after all. But what might this choice mean? Some may see it as an irresponsible millennial mistake. We see it as desperation in the face of mounting debt and ever-increasing higher education costs. This isn’t the first survey to ask student loan borrowers what they might do to get rid of their debt. Earlier this year another poll revealed most of the respondents would give up Netflix to get their student debt canceled. Not really a scandalous revelation. However, around 22 percent of respondents would “help their best friend dispose of a dead body” if it meant student debt forgiveness. It’s possible that this response was selected as a joke by some, but others may see possible accessory to murder charges as less intimidating than their debt. That kind of desperation is pretty intense. The Stress of Debt It’s important to note that both of these surveys had about 500 respondents each. That’s a drop in the... read more
Perkins Loan Program Expired Over the Weekend

Perkins Loan Program Expired Over the Weekend

Anyone who needs extra help going to college may be familiar with Perkins Loans. What are Perkins Loans? The Perkins Loan program allowed about 1,500 schools across the country to offer low-interest loans to students with the highest financial need. These loans were available to undergraduates, graduates, and professional students at a 5 percent interest rate. On average, in-need students received $2,200 in Perkins Loans in the 2014-2015 school year. Going forward, students who would usually receive Perkins Loans will have to figure out another way to get those necessary funds. Why Did Congress Let It Expire? The Federal Perkins Loan Program Extension Act of 2017, introduced in the Senate by Senator Tammy Baldwin, D-Wis., had extreme bipartisan support. Those who sponsored it expected it to go through without a hitch. However, they needed a unanimous vote and it took just one to block it. That one vote came from Senator Lamar Alexander, R-Tenn., who opposed the extension. While others argue the Perkins Loan program is essential to fill in gaps, Senator Alexander and like-minded politicians believe there is a better solution out there — one that is long-term and will address the broader financial aid system. What Will Happen Next? Anyone already approved and promised Perkins Loans for the current year will still receive them. However, going forward, no more Perkins Loans will be issued. This may not be the end of the program. Back in 2015, Congress let the Perkins Loan program expire but then brought it back a few months later. The plan was to phase out the Perkins Loan program while they reauthorize the Higher... read more
What Are Tuition Discounts?

What Are Tuition Discounts?

Tuition discounts are just what they sound like. Not every college student knows this, but much like an item at a store, there’s a sticker price to college tuition. Sometimes you just have to pay the sticker price, but sometimes the store (or the college) wants to give you an incentive to buy (or enroll), so they discount the displayed price. College tuition is by no means a fixed price at any institution. Financial aid packages come in all shapes and sizes, and while many aid packages include loans, colleges and universities lure students by giving discounted tuition. What does this mean exactly? A discount is simply a grant given by the school. This grant aid could be because of a student’s demonstrated financial need. But it could also be granted on a whim by the institution, regardless of the students’ finances. Institutions may give discounts for a variety of reasons, but often ultimately to incentivize enrollment. To lure potential students they could give discounts: • Based on a student’s demonstrated financial need • Based on a student’s accomplishments • On a whim • By the family’s request • Based on state residency • As an employment perk, including for spouses or dependent children Increasingly widespread Students may be unaware that what you’re getting is a discount just to entice enrollment. The grant may be named things like “merit scholarship.” This name is misleading because it may have nothing to do with academics. Plus, the sticker price was likely never going to be what the student was going to pay anyway. Tuition discounts are indeed widespread, according to a... read more
Ivy League School Leading the Free College Charge

Ivy League School Leading the Free College Charge

With student loans constantly breaking records, a lot of attention is placed on lowering student loan balances. While that is a valid endeavor for the currently indebted, others dedicate their time to minimizing the debt burdens of future students by lowering the cost of college — or at least reducing the amount of loans students need to take out. Even Ivy League schools are joining the cause. Brown University, an Ivy League school in Rhode Island, recently introduced the Brown Promise, a plan to replace all student loans in their financial aid packages with grants for undergraduates. In 2003, Brown started a journey to increase access with the Boldly Brown initiative, which established a need-blind admissions policy. This policy promised that admission would be determined by merit instead of the ability to pay tuition. While it increased access to low-income students, it did nothing to help middle-income students afford a Brown education. In 2015, the university continued that journey by starting the fundraising campaign BrownTogether to “move Brown to a new level of excellence, with specific investments in areas of education and research that demand greater depth and scale, and which are important to society,” according to Brown President Christina Paxson. The $3 billion raised would help propel Brown into a position to “meet 21st-century challenges.” One of the first projects funded by BrownTogether was a new state-of-the-art building for the School of Engineering, featuring 20 lab modules fit to address today’s challenges in a variety of fields. Now, Brown University is making another promise: the Brown Promise. Building on the Boldly Brown and BrownTogether campaigns, this new promise... read more
Department of Education Stirs Controversy with Latest Moves

Department of Education Stirs Controversy with Latest Moves

The Department of Education (DOE) has been making headlines since President Trump took office and appointed Betsy DeVos as Secretary. Which of the Department’s recent actions affected the world of student loans? Two moves have stirred up some controversy. DOE Picks New Student Aid Enforcement Leader First, the DOE announced their pick to head the Student Aid Enforcement Unit: former DeVry University dean Julian Schmoke. The unit was created in 2016 to combat the threat of fraud in the student loan industry. Considering his former position at an institution that was the subject of multiple federal investigations for fraud, which has garnered strong criticism, and his little to no experience investigating fraud claims, Schmoke was an unexpected pick. Schmoke was never implicated in any of the fraudulent actions of the for-profit school; in fact, DeVry’s parent company, Adtalem Global Education, handled it and settled the federal accusations against them for $100 million. However, though he had served solely in academic roles, some interpret his hiring as a signal that for-profit colleges will face less scrutiny by federal regulators. DOE Steps Back from Agreement with CFPB Second, the DOE recently ended an agreement with the Consumer Financial Protection Bureau (CFPB) that requires the Department to share information with the CFPB (and vice-versa) regarding complaints from borrowers about their student loans. For example, if someone had an issue with their student loan servicer or their lender, they could lodge a complaint with either entity and the two would communicate to resolve it. In their letter withdrawing from the agreement, the DOE cited “overreach” by the CFPB into issues of federal student... read more
The Myth of the Self-Indulgent Student

The Myth of the Self-Indulgent Student

The conversation about who’s in college needs to change. The typical college student is not the stereotypical college student anymore. Most college students are not attending private, four-year institutions like you might assume. They’re not attending full-time or living on campus. More than two-thirds of students these days are “non-traditional.” They might be older, commuting, part-time, or parents. They might be seeking a degree meant for a specific job. They might have a low income. The “Impractical Degree” And often the conversation about student debt — in articles, in the comments section, and at the dinner table — brings up the idea of the self-indulgent student. This theoretical student goes to a fancy four-year school, takes out loans to attend, and graduates with a degree with no practical application for a real-world job. For some, this kind of degree may still enrich the life of the student. It could open the door to great connections or prep them for an advanced degree. For others, “impractical” degrees are applicable to a variety of jobs that require strong analysis and critical thinking. But in truth, the students who go this route are few and far between. Of the thousands of colleges and universities in the United States, only several dozen are ranked as highly selective and might be considered “elite.” And at those schools is where you have a good chance of finding a theater major or a philosophy major. (To be sure, you still will find chemical engineers, programmers, and pre-med students at elite colleges, too.) An Education Focused on Jobs, but Debt Persists So where do the vast majority... read more

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I was giving over half of my monthly income to student loans until I heard about AFBC.  I just recently enrolled in the program and already I am saving close to $1,000/month.  I couldn’t be happier to have this extra money and finally feel a little …

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