Student Loan Forgiveness News & Information

Student Loan Complaint Rate Increased 325%

Student Loan Complaint Rate Increased 325%

This last year consumer advocates have been on a warpath regarding student loans, setting their sights on loan servicers. Just this year the Consumer Financial Protection Bureau (CFPB) began the process of suing one of the largest student loan servicers: Navient. With the CFPB so prominently in the news lately, it was only a matter of time before the number of complaints submitted to them would skyrocket. On April 1, the CFPB released their monthly complaint snapshot, showing a 325% increase in student loan complaints received in a year-to-year comparison of just three months. From January 2017 through March 2017 the CFPB received 3,284 complaints about student loans, compared to 773 from January 2015 through March 2016. The CFPB has noted that the spike in student loan complaints may be because of the awareness of loan servicer issues, specifically tied to CFPB suing Navient. The report shows that Navient was the most complained about company, jumping from tenth most complained about in the previous month’s report. The number one complaint had to do with student loans, followed by debt collection — by a large margin. After these past three months, Navient now has a complaint total of over 12,000. “The agency’s lawsuit against Navient was a wake-up call to many borrowers that they too may have been preyed upon by the company’s illegal conduct,” said Rohit Chopra, a senior fellow at the Consumer Federation of America, and student loan ombudsman for the CFPB. Most of the complaints from the snapshot were issues with credit card companies, which remains the nation’s highest debt. Wells Fargo showed an increase of approximately... read more
Consolidation versus Refinancing

Consolidation versus Refinancing

There is a lot of confusing jargon in the world of student loans — it’s hard to keep track of it all. There are a couple of terms that often get mixed up and could cause you, the borrower, a serious headache. The word consolidation can mean different things in different contexts. Some people simplify and define consolidation as combination. Combining loans to create a single monthly payment can be a good option to lower payments (but not always, so do your research first). To get more specific, combining loans is different for federal loans and for private loans. When you combine federal loans it’s called consolidation, and when you combine private loans, it’s called refinancing. The differences are outlined below. Federal Consolidation Only federal loans are eligible for federal consolidations. These consolidations are completed through the government. A federal loan consolidation combines all the selected loans into one with a single loan servicer, which you can choose from a list. You will be given a new interest rate that will be the average of all the interest rates of your loans. Generally, you don’t need to consolidate. Though it is a tool that can help simplify your payments if you have more than one loan servicer. Refinancing (Private Consolidation) All loan types are available for refinancing. Some people refer to refinancing as private consolidation. Really what you’re doing is having someone buy your loans, similar to when you refinance other loans like auto or home loans. Your account transfers to the new lender, the term starts over and you make payments to the new lender. Refinancing your loans... read more

Rings Commit Student Loan Fraud

A new report from the Inspector General for the Department of Education shows that large and well-organized ring of fraudsters are creating fake student profiles and applying for student loans, working primarily through online education providers. The problem is made worse by many online education outlets not properly reporting attendance and enrollment to the Department of Education. Sometimes the fraudster commit student loan fraud through creating “straw students”, completely fictitious profiles of non-existent persons. Other times, they take out student loans in names of real people who later find out that they were targeted when their finances take a hit due to unpaid student loans that they never applied for or received. If you have student loans, be sure to check periodically to see if there is unusual activity on your student loan records to protect yourself from student loan... read more

8% of Congress Carries Student Loan Debt

It may come as a surprise to you that 47 members of Congress currently have student loan debt. Even if the percentage of members with student loan debt is small, at 8%, their average debt is nearly $70,000 per person. 28 Republicans and 19 Democrats are on the list, but Congress itself right now leans Republican so the number of Republican student loan debtors only leans slightly Right. While in the average American population about 13% of people have some student loan debt, the lower number in Congress is high, considering that the average member of Congress is much older that the general population and much wealthier. We often imagine that Congress’ complete inaction in dealing with the student loan debt crisis comes from their separation from the day-to-day issues of most Americans, but for at least 8% of Congress, student loan debt is very real. More information about which members of Congress currently have student loan debt and how much are at... read more

Should Government Profit From Student Loans?

The sharp climb in student loan debt and student loan default in the last few years has caused a lot of political grandstanding at the state and federal level, but very little actual legislation. And now a new angle to the debate, their is now discussion of whether it makes sense or is fair for the U.S. Government to make a profit from student loans. Recently six democratic senators sent a letter to Education Secretary Duncan stating that the Department of Education should not be in the business of “squeezing” students and that the federal government to bring in $110 Billion in student loans in the next decade. Whether or not this number actually represents profits is debatable, since a number of student loan forgiveness programs will begin to kick-in in 2017, which fundementally change the income from student loans overall. It is unclear from the report that this number originally came from where this money is originating from. 
That being said, clearly the interest and restrictions on student loan debt makes it a burden on most student borrowers and leave few options for those who come out of college with large student debt payments at the beginning of their professional careers. Many other degrees in certain disciplines, including trade school programs, often do not pay as well of certain other types of degrees and leave students on a cycle of barely paying against the principle of their student loan debt. The best option is, of course, to educate yourself before applying to college what the lifetime value of a degree can be in a best case scenario and... read more

Set a Budget Plan For Student Loan Debt Management

Nearly 70 percent of college graduates are in student loan debt. That doesn’t count the amount that are in debt because of other things such as credit cards, mortgages, car loans, etc. So what can you do to help yourself with your student loan debt management? Setting a budget is the top priority. What do you need to set a budget? Here are some things to consider. What You Should Budget The first thing you want to do when it comes to making a budget to control your debt management is to write everything down. And this doesn’t mean the three most important bills you pay, this means everything. You will want to decide how much you are paying for electric, gas, garbage, rent/mortgage, gas, vehicle payments and maintenance, clothing, cell phones, television, internet, everything. No expense is too small to include into your budget. If you are unsure of how much these cost each month or they vary, always write down the highest number that you have seen in the past. Electric bills can vary greatly. Seek Help if You Need There are financial planners available that can assist you with everything you need to know about debt management. If you are having trouble recollecting everything in your budget, they can propose one for you. Some of these may cost money, but a good debt management service is very valuable. Advantages Once you have determined exactly how much you can spend each month, you will be able to see how much you have left over. You can use the money to put into savings for an event or... read more

Seek A Student Loan Financial Advisor If You Have Trouble Paying

Not everyone is going to have the necessary funds to pay for their student loan each and every month. It’s a growing problem in the United States and some are choosing just to ignore the problem rather than remedy it. For those that can not make their payments on time, it’s best to seek the help of financial services. So what exactly can they do for you? Here are some of the student loan financial advisor advantages. Budget Setting When meeting with a company that performs financial services, you will be able to see how much money you are spending and where it’s going. If you are spending too much on one item or bill each month, financial services will be able to point you into a direction where you spend less on unnecessary items and more on the bills that need attention. Steer You Toward Future Money If you still have some money left over after figuring out your budget and getting it set in the right place, then you should be in luck. Financial services companies are able to assist you in investing your extra money into things such as stocks, bonds, CD’s and more to set you up with a brighter financial future. Figures Out Emergency Relief Once in awhile, an emergency will pop up in which you need money. Financial services companies can tell you how much you should be saving each month toward these types of expenses. It’s a good idea to always have the money on hand in case a hospital bill or major vehicle expense comes up because these can cost thousands. Give... read more

The Reasons Against Student Loan Consolidation

In a previous post, we mentioned all of the positives that can come out of loan consolidation. Truly, it is a program that can be very beneficial. However, we did not mention some of the caveats that loan consolidation can entail. Now, all of these are not awful things that can happen, there’s no magic fee that appears and costs you $10,000 but there’s some things to be aware of. Here’s some of the downsides of loan consolidation. More Money When it comes to student loan consolidation this is the clear cut biggest disadvantage. By tying up all of your student loans into one large one, it’s unlikely you will be able to afford a minimum monthly payment that would be set in a 10 year standard repayment plan. Loan consolidation will extend this period and you will be paying much more interest than you were before. While in the long term you will end up spending much more money due to interest, it’s nice to be able to have just one payment that is affordable. It just comes at a price. That’s the key disadvantage here. You May Be Losing Benefits While you can still get a new deferment option through loan consolidation, you may lose other benefits in return. Loan forgiveness may be thrown out of the window as well as cancellation. Say for example that you are working in public service. If after 10 years your individual loans can be forgiven but you consolidate them in the second year, then you can no longer achieve this option. It provides a lower payment each month but it... read more

Borrowing to Pay Off Student Loan Debt

Now that the student loan debt has reached an average of $33,000 for students that graduated in 2014, some are using creative methods to bring it down. So what are some of the ways in which students are borrowing money to knock their student loan debt down? Here’s a look at some of the ways. Home Equity Loans With the housing market still trying to rebound from the bubble bursting, interest rates are becoming much lower on home equity loans. For this reason, some students have been able to receive a home equity loan to completely pay off their student loan and take advantage of the low rates. However, this can be a large risk since home equity loans aren’t as easily forgiven as a student loan and the payments each month can be much higher. Always consult a financial expert before using this route. 401k 401k borrowing can be easy, but it’s not advised that you empty it out so early in your life to pay off a student loan. It’s easier to leave the money in the 401k so that it continues to grow and you will be taxed for taking out any amount as it counts as income. Personal Loans Some have received offers for a private loan in which their interest can be lower than even that of a Federal Government loan. It’s rare to see unless you have tremendous credit, but it’s possible. Again, a student loan has more of a chance for being forgiven if you work in some of the right fields. Others have even asked their friends and family with extra... read more

Using A Student Loan Calculator to Determine What You Need For College

There are many great tools on the internet that can show you how much you need for scenarios such as a mortgage or college. Using the student loan calculator, you can determine how much exactly you will need to borrow. This is a great option so you don’t end up over borrowing and getting deep into debt. So let’s look at the student loan calculator to determine an example of how much you might actually need for school. We’ll start with a job income. If you are able to get a part time job in which you make $5,000 that is a terrific start. Let’s also assume that the parents are able to spend $2,000 a year for tuition (this number can vary greatly). Add in another $1,000 through scholarships and grants to the student loan calculator. If you also have $1,000 in savings through high school work or graduation gifts, that can also make a big dent. Let’s use the number of $9,500 to determine the average public school costs for an in-state student when it comes to tuition and room and board. If you are able to live on-campus, his can save you a lot of money on bills such as internet, television, electric and more. Book costs are on the rise as well, so let’s assume you need $600 per year for those. Also, you will need spending money for gas (let’s use $500 for one year) and insurance (around $1,500 per year). Lastly, we will throw in $1,000 a year for other additional expenses (such as clothes, off-campus food, etc.) If you have exhausted every... read more