Debt a drag on UK youth - Hard times - Young adults are finding it almost impossible to break free from their parents, both emotionally and financially, as they struggle to become independent, a British study has revealed.

A survey of 1500 people aged between 18 and 30 by The Co-operative Group found that debt had become the "new normality" for their generation.

Student loans, credit cards, loans and overdrafts were the main sources of debt, with almost a third admitting they are hiding the state of their finances from their parents.

More than four out of five of those questioned are receiving financial support from their parents, needing help to buy food or repay debts.(see HERE)

Advertisement

Most also turned to their parents to help find a job, give them lifts, or do household chores, the report says.

The study also revealed that 18 to 30-year-olds were earning over £7000 ($A10,645) a year less than they thought they would in relation to their age and education, while one in 10 did not feel their job matched their qualifications.

Two-fifths of those surveyed were dissatisfied with their lives, believing they should have achieved more.

Martyn Wates, deputy group chief executive at The Co-operative Group, said: "It should not be forgotten that it is these young adults who are ultimately going to shape the future of Britain for years to come, so they need support and encouragement to thrive which, in turn, will only be positive for the future of the country.

"Whilst it is positive to see that young people believe that they will one day earn a healthy salary, the survey has signposted that the earnings of 18 to 30-year-olds do not currently live up to expectations which highlights that, for now at least, this ambitious group may have to re-evaluate their ideals."

The research also revealed that one in four young adults had never climbed a tree or played the traditional British game of conkers and one in eight had never ridden a bike.

» Read More...

Interest Rates on College Loans on Way Up - Putting her self through school, Shayna Stevens relies heavily on student loans to pursue a degree in secondary education at Northern Arizona University.

Currently a sophomore, Stevens said she is already $40,000 in debt. She works part time during the school year and plans to take two jobs over the summer to keep that amount as manageable as possible.

"If I didn't have to take out these loans then I wouldn't have to work all these extra jobs on the side and I could focus more on my studies and actually getting the education that I'm paying for," Stevens said.

Things won't be getting any easier next year. Unless Congress acts before July 1, interest rates on subsidized student loans, for which students must demonstrate financial need, will rise from 3.4 percent to 6.8 percent.

Students don't have to pay interest on subsidized loans while in school. Unsubsidized loans, which currently have a 6.8 percent interest rate, require students to pay interest on loans from the start.

Stevens, who has both types of loans, said she plans to finish her education but has concerns about her peers. She said she already has seen friends drop out of NAU after realizing that the financial burden would be too much.

"I think there's definitely going to be a huge drop out from students who just can't afford to take on these loans anymore," Stevens said.

Serena Unrein, public-interest advocate with the Arizona Public Interest Research Group, said the average Arizona student borrower will pay $1,000 more in interest if the rates double. (see HERE)

Jennifer Johnson, a senior at Arizona State University who took out subsidized loans throughout college, said that with the current interest rates she will be paying close to $2,000 in interest over a 10-year period.

"Doubling it to $4,000, I just can't even imagine," Johnson said.

Tucsonan Ann-Eve Pedersen, president of the Arizona Education Parent Association, said she has talked with parents who won't be able to send their children to college because of the rising cost not just of loans but tuition.

"We're just making higher education unaffordable, but we know that all of the quality jobs now and definitely in the future are going to require higher education, so we're moving in the absolute wrong direction as a state," Pedersen said.

Unrein said that the increased interest rates could also influence the decisions students make after college. She said that those with a lot of debt may choose to not go into lower-paying careers such as teaching or working for nonprofits.

"We need people to go into careers as teachers, as first responders, and if we're saddling people with the kind of debt that makes it impossible to go into those careers then that leaves our state in a world of harm," Unrein said.

The interest rates on subsidized loans were set to double last year as well. Just before the deadline, Congress passed a one-year extension of the 3.4 percent interest rates.

Megan McClean, director of policy and federal regulations with the National Association of Student Financial Aid Administrators, said that another one-year extension is unlikely.

"Last year, extending it for one additional year cost $1 billion, and I'm sure you know that that money is hard to come by in these particular times that we're in," she said.

McClean said that Congress and President Obama are looking for long-term solutions. In Obama's fiscal 2014 budget, he called for student-loan interest rates to be set each year based on the current market rate.

"I think from a broader standpoint … we need to find a long-term sustainable solution versus these quick fixes," McClean said.

Amid national discussions on college affordability, Sheila Shelton decided to return to college after 30 years. She took out subsidized loans to pay for an education degree at Phoenix College. (see HERE)

"If it doubles, I don't know if I'll be able to pay it all back," Shelton said. "It'll be a lifetime. I'm already over the age of the average student."

However, Shelton said that she won't let the increase postpone her dream of being a special-education teacher.

"It's going to be a challenge, but at this point I'm up for the challenge," she said.

Loan types

Subsidized

• Recipients must demonstrate need.

• The U.S. Department of Education pays interest: while a recipient is in school; during the six months after the recipient leaves school (only applies to loans disbursed before July 1, 2012); or during a period of deferment.

• Currently have an interest rate of 3.4 percent.

Unsubsidized

• No financial need necessary.

• Students are responsible for paying interest from the outset.

• Currently have an interest rate of 6.8 percent.

Source: Federal Student Aid Office of the U.S. Department of Education

» Read More...

Student loans may make recent grads hesitant 2013 - Student loan debt is a troubling and not-so-

A recent Princeton study conducted by Fenaba R. Addo suggests that student loan debt could possibly leave some partners with cold feet — particularly men.

The study suggests women who have accumulated student loan debt are less likely to marry as opposed to men in the same financial predicament. Although this seems strange, there are some explanatory theories, as well as controversy from both sides of the argument.

“One interpretation of this study might suggest that women with more debt are more likely to be

pursuing professional degrees and careers, which might simply mean they are putting off marriage until a little later than average so that they can build a career first and then a family on their terms,” Seth Abrutyn, a sociology professor at the University of Memphis, said.

The United States has a federal student loan debt that resides somewhere between $902 billion and $1 trillion, according to the Federal Reserve Bank of New York. (see HERE)

“In times of economic recessions and uncertainty, both women and men tend to put off marriage and children until they feel financially secure,” Abrutyn said. “This answer doesn’t really explain the differential in rates between men and women, but it could explain why the data is saying one thing, when in five years, it might be saying something else.”
Though it could be just a misinterpretation of statistics, the classic American culture could be an explanation of why some men might be wary of taking on a traditional potential housewife fully loaded with money to pay back.

“I could understand how some men might be hesitant to marry a girl with debt, for financial reasons,” Addison Piggott, a junior criminal justice major, said. “Though the economy could be a primary issue, it seems the statistics could be distorted by the fact more people are simply waiting until later in life to get married, so that they’re financially stable.”
Sophomore Haley Hanners, an English major who has accumulated student loan debt over the past few years, believes that debts shouldn’t play a part in marriage, stating that a mutual education is well worth the burdens.

“I’m not worried about loans being a factor in my love life. I don’t value wealth and I don’t mind spending the majority of the rest of my life paying off loans as long as I can have an education and do what I want to do, career wise,” Hanners said. “And whoever I choose to marry will value the fact that I have an education and career regardless of loans and vice versa.”
Though there is little evidence of these financial issues actually interfering with  “true love,” a debt can last as long as marriage, if not longer in today’s world, so it is definitely something to consider when finding a potential life partner. (see HERE)

“I think statistics are a way of making people believe things that aren’t solid,” Hanners said. “They’re generally circumstantial, so I don’t put a lot of faith in them.”
distant reality for many currently enrolled students. However, recent studies show that it might not be just an economic problem.

Source : www.dailyhelmsman.com

» Read More...

Watch Out for Student Debt Time Bomb 2013 - The American dream of a college education is turning into a nightmare for too many people. More jobs require a college degree, yet the percentage of unemployed and underemployed college graduates age 25 and younger is at its highest in 11 years.

Meanwhile, college costs are soaring, in part because cash-strapped states have less to give to public universities. And parents who’ve lost jobs or home equity after the financial crisis can’t support their children’s college costs as they planned.

The average total student debt load increased to $27,253 in 2012, a 58% jump during a seven-year period when debt as a whole rose 16%. More than 1 million adults have student debt exceeding $100,000.
Furthermore, student debt as a percentage of household debt has gone up to 8.5%, nearly three times what it was in 2003. The $870 billion now outstanding in student debt (which includes federal lending) outpaces that of auto loans ($730 billion) and credit card lending ($693 billion).

“We tell young adults, if your four-year-degree debt is going to exceed the average price of a midsize car, you need to look for a less expensive solution so you don’t start your first job behind the financial eight ball,” says John Coyne, a member of the board of trustees at Mount St. Mary’s University in Emmitsburg, Md., and vice chairman of Brinker Capital, a $13.5 billion investment management firm that provides advisory services to financial advisors. (see HERE)

Coyne says families can lower higher education costs if their children first live at home and go to a two-year community college. Later, they can complete their degree at a four-year institution.

He notes that professors laid off from four-year institutions are now teaching at two-year schools either full time or part time, bolstering the community colleges’ reputations.

To help keep costs down, colleges are condensing some four-your degree programs into three years.

The Consumer Financial Protection Bureau has come out with a Web-based tool kit called “Paying for College” (www.consumerfinance.gov/paying-for-college) to help student borrowers facing high payments and lacking alternative repayment and finance options. The site includes an application for financial aid and advice on choosing a loan. There is also a worksheet that allows students to compute how much they would need for particular colleges with different aid packages.

Undergraduate and graduate students should maximize federal student loan borrowing because the plans offer repayment and loan forgiveness advantages that private loans and federal Parent PLUS loans don’t, says Fred Amrein, a Philadelphia-area, fee-only financial consultant specializing in college education funding.

Amrein warns that the federal government is starting to go after the Social Security checks of parents who fail to keep up payments on the PLUS loans, which are typically used to meet tuition and fee expenses underfunded by student loans. (see HERE)

MassMutual financial advisor Marlene Dattilo says that before parents or grandparents cosign a private student loan, they should find out what their risk is for nonpayment and how it affects their credit rating. They should also ask: If the student becomes disabled or dies, is the loan still there and who is responsible for payment?

Dattilo says the family member preparing to cosign should bring the student along for this conversation. “Many times, the parents and grandparents have not discussed money matters at all [with children],” she says. “This is a great time to start.”

» Read More...

Cheap Budgets With Different Effects On Student Loans 2013 - Among a number of other dissimilarities, federal budgets proposed by Democrats and Republicans in Congress offer varying effects for students involving federal financial aid and education funding.

Democrats in the House of Representatives’ House Budget Committee announced an alternative budget plan Monday in response to the budget released March 12 by House Budget Committee Republicans, according to a Monday press release from the committee.

“Any help that students can get — by committing to funding Pell Grants and just keeping interest rates as low as they have been — is really helpful,” said BU Democrats Communications Director Margarita Diaz. “… It’s important to ensure that everyone can actually afford an education.”

The alternative budget proposed by House Democrats continues full funding for students receiving Federal Pell Grants and prevents subsidized student loan interest rates, currently set at 3.4 percent, from doubling in July 2014.

“This focus on education is in sharp contrast with the Republican budget,” the Democratic budget summary stated. “Their budget makes it harder for out-of-work Americans to get the education and skills needed to find jobs in a competitive global economy by cutting job training services and by cutting student aid by $168 billion over 10 years.”

The Republican budget plan aims to reserve financial aid for those most in need (see HERE), cap Pell Grants awards at $5,645 annually, streamline federal aid programs and remove barriers in higher education, particularly those relative to non-traditional teaching methods like online college courses.

Tim Buckley, communications director of the Massachusetts Republican Party, said in an email that the Republican budget would protect students in the future and ensure the Pell Grant program is sustainable.

“This budget plan looks to maintain current Pell Grant levels and reform the system so today’s middle school students can access the same resources currently available — which left alone, would go broke,” he said.

He said measures aiming to lower costs of college in the past have generally been ineffective.(see HERE)

“It is important to remember that throwing money at efforts to reduce the cost of higher education has not worked, as anyone paying tuition today knows all too well,” Buckley said. “More spending is not translating into results.”

BU Republicans Vice President Mara Mellstrom said the budget proposals do not appear as if they will affect a majority of college students, and that most of the provisions for higher education deal with streamlining program funding.

“Where [U.S. President Barack] Obama wants to do more Pell Grants and more price control, it looks like [House Budget Committee Chairman] Paul Ryan and the Republicans just want to trim the fat,” Mellstrom, a College of Arts and Sciences junior, said.(see HERE)

Mellstrom said the budget proposed by Republicans is fair and appropriate.

“The Republicans are well aware that everyone deserves a college education and that everyone should have equal opportunity to get it,” she said.

While it is troublesome that Congress takes so long to come to a consensus on the budget, these dilemmas are more complex than most Americans think, Mellstrom said.

“It’s not black and white,” she said.

Diaz, a CAS senior, said the current stagnation in Congress is causing further distress for college students trying to fund their education.

“We are at a point where students must address the skyrocketing costs of college tuition, but we’re also at a point where, in Congress, everything is completely stalled right now,” she said. “The House Democrats, they’re just trying to make sure with this budget that college students don’t get caught in the fray of things like inflation or economic conditions in this country.”

Kayla McDonald, a CAS senior, said Congress should be quicker to make a decision on the national budget.

“It makes sense that it’s taking them [Congress] a long time, but they should definitely be able to come to an agreement faster than this,” she said.

McDonald said she receives federal aid, but would still like to see some improvement to federal aid programs.

“I think they overestimate the family’s contribution a lot of the time,” she said.

School of Law graduate student Kelly Soltis said while she does not receive federal aid, she would like to see a limit on how much colleges can charge.

“It would be helpful for students like me who don’t receive financial aid to have some sort of cap on either the percentage increase on tuition or tuition in general at universities, especially private universities,” she said.

CAS freshman Ellen Nevers said it is important to maintain a low interest rate on federal loans.

“It’s definitely helpful that some of the federal loans come with a much lower interest rate,” she said. “They’ve offered me a lot of loans that would be easier to pay back than trying to take a loan out myself.”
Source : http://dailyfreepress.com/

» Read More...

Student Loan As a Family Affair - If the mere mention of FAFSA (Free Application for Federal Student Aid), which most colleges and universities use as the universal form for determining financial aid eligibility for grants and loans -- doesn’t strike fear in your heart, then you probably aren’t staring down the possibility of not being able to afford to send your son or daughter to college this fall.

Even worse off than those who are already struggling to gather all the financial documents necessary to complete the lengthy application are the parents who are nursing the hope of landing scholarships, grants and student loans but have yet to hear about the FAFSA process.

Sorry, Illinoisans, the “priority deadline” -- the cutoff to qualify for state-based college aid -- was March 1. And funds were so limited that the state asked families to file “as soon as possible after Jan. 1, 2013” -- a hefty request when tax forms didn’t even arrive until the end of that month.

Take heart, Texans, your budding scholars have until March 15 to meet their priority deadline and Mississippians until March 31.

As for everyone else whose students are deep into considering prospective campuses and majors (see here), it’s time to have some serious heart-to-heart conversations about how to pay for college.

And the No. 1 thing families need to know about applying for college financial aid (see here) is that it involves a ton of hard work.

First, the only way to triumph over the nightmare stories of students who graduate with tens of thousands of dollars in debt -- or worse, drop out before earning a credential but still owing on loans -- is to step out of your comfort zone and talk frankly about your child’s hopeful expectations and the real-world limitations of parental help.

Probably the most shocking statistic I’ve heard about our country’s trillion-dollar student-loan debt crisis is that Americans 60 and older are among the hardest hit.

Last spring, the Federal Reserve Bank of New York reported that this demographic owes about $36 billion in student loans with about 10 percent of those loans delinquent.

Every parent wants to help their child through college but, as much smarter financial minds than mine have noted, it isn’t wise to sign or co-sign your life away on someone else’s education loan, even if that someone else is your baby. Plus, it might not be the best choice.

Research by Laura Hamilton, a sociology professor at University of California (see here), found that while the common perception is that the more a family contributes to college costs, the more time students have to focus on studies, this may not be true. She reported that though students whose parents picked up most of the tab were likelier to graduate, their grade-point averages were lower than those of their peers, possibly because they had such a small stake in the financial aspects of their educations.

And then we have the question about whether a student should work while attending college. Over the past few years, there has been tension between those who are proud to have worked their way through and others who fear it puts students -- especially minority and first-time college students -- at risk of not performing well in school.

It’s definitely a legitimate concern, especially if you’re talking about students who haven’t proved themselves to be high academic achievers. Yet, the American Psychological Association recently reported that African-American and Hispanic high school students who work long hours while attending school have more stable grades compared to whites and Asian-Americans working the same hours.

These studies shouldn’t absolve parents from fretting about how college and its costs could make or break their child’s future. But the tidbits could fuel the much-needed preparation and soul-searching required to confront some of the very real consequences of how to finance a family’s college dreams.

Navigating these emotionally thorny issues is terribly hard work, but also the perfect precursor to the sometimes mind-boggling labor of applying for student aid (more here). My husband and I already have our own student loans to pay off, and now we’re planning on how to pay for college for our two sons. Believe me, it’s a nightmare.

Source : Washington Post Writers Group

» Read More...

Over 300K Student frustration with Studylink - Government call centre Studylink is battling to cope with the number of inquiries from students their about loans and allowances. The help line has dropped nearly 300,000 calls in the last five months, and students' frustration is mounting as they struggle to get answers to their questions.

Student Melissa tried to make contact via the Studylink website(see here), but was told "the only way to do anything is over the phone". 

"So I've rang up and I cant get through to them. I've called them at eight o'clock in the morning and all throughout the day and I cant get through," she said.

It's a similar pattern across the country. Head of Studylink Susan Kosmala said it is unfortunate some students have trouble getting through.  

"That's not the service we aim to provide. We are continuing to make improvements to answer as many calls as we can," she said.

Victoria University Students' Association president Rory McCourt said the problems mean some students have to make difficult choices. "What we're finding is students who are out of luck with Studylink coming through with their allowance or student living costs, they're facing choices like spending nights at the night shelter, desperately hunting for flats - but its very hard to get into a flat when you can't front up with the cash," he said. In the last five months Studylink has answered nearly 430,000 calls, but a further 300,000 weren't answered. The figure is actually an improvement of more than a 100,000 on the same time last year. Studylink told ONE News this is its busiest time of year. It is processing 310,000 student loan and allowance applications (see more here) and has employed an extra 330 staff.

But that might not be enough, McCourt said.

"Students have trouble with Studylink every year but this year is especially bad we've found.

"A lot of people just dont get through at all, they get hung up on when they do and the online support just isn't adequate. We understand that Studylink is doing their best but the Government needs to acknowledge that this is a problem year in, year out and it needs more resourcing," he said.

Melissa's course costs have been paid by Studylink, but she still hasn't received the part of her loan she needs for living expenses and so cannot afford this week's rent. 

"It's made it a lot more stressful than it needs to be. I have not been able to buy some of my books because I haven't had my payment yet," she said. She's been to Work and Income to try and talk to someone face to face, but was told she had to make an appointment by phone, through Studylink. Studylink recommends to use its website as much as possible.

Source ONE News

» Read More...

Do you have student loans? Learn Your Options - College loans can be a bear for veterinarians. An article in the Express-News Business section pointed out the growing number of practicing vets across the country who have large college loans. They're not alone.

According to Think Progress, a political blog sponsored by the Center for American Progress, the number of students who go into debt to get a bachelor's degree has risen from 45 percent in 1993 to 94 percent today. In 2010, student loans surpassed credit cards as the largest source of debt for Americans and now tops $1 trillion.

Not making student loan payments can damage your credit, which can prevent you from obtaining a job. Unpaid student loans can follow you for decades and money can be taken from income tax refunds and Social Security benefits. Wages can be garnished, and it is rarely discharged in bankruptcy.

Graduates and others who have student loans should learn their options since there are repayment plans available, even for those who have defaulted. It is never too late to begin repaying. As a local nonprofit agency providing financial education for over 30 years, we want consumers to know we have knowledgeable experts available to help you find a way to manage college debt within your budget.

We encourage anyone with student loans to learn financial aid terminology to ensure they understand what options they have. There are many new loan forgiveness and income-based loan repayment options available today. However, navigating through all the student loan information can be overwhelming.

Let our counselors negotiate with your lenders to help you get back on track to financial stability.
After all, you went to college to attain financial security.

Source: http://www.mysanantonio.com

» Read More...

How to Find Fast Loans For Students - How to get an 'Education loan' The cost of education is getting higher day and day. To solve this problem, banks provide 'Education Loans' to all deserving students so that further studies become a good learning experience. Getting an education loan granted can be quite easy and one can apply online also for it.
To take an education loan from a bank, a student should take the following steps:

- Step 1: Take the student loan application form from the bank and fill it correctly. 

- Step 2: Have a personal discussion with the bank authorities. 

- Step 3: Provide correct supporting documents to the bank with your signatures on them. 

- Step 4: Get a guarantor.

- Step 5: Student signature on Promissory Note. 

- Step 6: Sanctioning of the loan or disbursal of the loan to the student.

All the above six steps have to be followed by the applicant. Now let us discuss each step:

Step 1: Loan Application form from the bank

Just as for all the other kinds of loans, for an education loan also the banks provide an application form to the applicant which has to be filled correctly. The bank will ask for personal details and all information related to the course for which one is applying. Make sure the information is accurate and can be easily verified. This information will help the bank to process your application faster.

Step 2: Personal Discussion with the bank authorities.

Once the applicant has filled the form, the next step is the discussion with the bank authorities. In this stage, the applicant is asked about his/her academic and extra-curricular performance. At this stage, it is very important to be lucid and clear about one's selection of the course and its potential of generating income in the future.

Step 3: Provide correct supporting documents to the bank with your signatures on them

In case of education loans, the documents related to admissions are mandatory even before the bank considers the loan application. The bank will verify on every step of the enrollment of the student in the concerned institute in which he/she is studying. One may also require collateral
security such as papers related to any property to be mortgaged if the loan amount is above 4 lakhs (INR).

Step 4: Get a guarantor.

For an education loan, a guarantor is mandatory.To get a loan approved there should be a person who takes the responsibility for the repayment of the loan in case of any mishap. The guarantor could be the applicant's parents or guardians. The bank will run a thorough check on the guarantor's credit history before sanctioning the loan. After the completion of the process, the loan may be sanctioned or denied.

Step 5: Student signature on Promissory Note

While the parents/guardians are guarantors, the student is the actual borrower of the loan. Once the loan is
sanctioned, the student has to sign a promissory note to the bank.

Step 6: Sanction of the loan or disbursal of the loan to the student

Once the paper work formalities have been completed, the bank will surely disburse the loan into your account or deposit the fee directly into the account of the concerned college/institute.
All the above 6 steps will surely help you to understand the process of education loan. Once the loan has been approved you may contact the Admission Times for the further process.

» Read More...

They Won't They Let Education-Loan Debtors Refinance  - Just about any time I turn on the radio, I hear an ad exhorting people to refinance their loans.  Interest rates are lower than they've been in decades, those ads remind us.  Even some people with less-than-stellar credit--including those whose home mortgages are "underwater" or even in foreclosure--are getting those rates.

It's not only the homeowners who've overpaid for their McMansions who can refinance.  People with credit card debt, even if it's a result of gambling, will be considered for lower interest rates, especially if they have collateral--including homes with "underwater" mortgages!  Car loans aren't exempt from consideration, either.

In fact, there's only one kind of loan for which it's all but impossible to get lower interest rates.  Since you're reading this blog, you've probably guessed what it is:  Federally-guaranteed student loans. 

The government and banks point fingers at each other when it comes to this issue.  The government blames the banks for not wanting to reduce the interest rates on such loans, which are often carried by people who don't have collateral.  The banks blame the Federal government for regulating the interest rates on those loans. 

Of course, both sides don't want to give up the handsome profits they're making.  They also realize that most student debtors are a captive market:  Unlike, for example, credit card holders who can shift their balances from, say, Capital One to Barclays, those who are struggling to pay education loans don't have the option of moving their debts and balances to another credit provider.

Plus, the loans are one of the few areas in which the Government actually makes a tidy profit.  According to the Center for American Progress, these loans are expect to give Uncle Sam over $34 billion in profits this year by financing $864 billion of the $1trillion in outstanding student loans. In the current budget environment, nobody wants to ask the government to cut off such a cash cow.

Most of those loans are saddled with interest rates of 6 percent or more.  According to the CAP, simply applying a rate of 5 percent to all student loans that currently have interest rates higher than that will save borrowers around $14 billion. 

Then maybe, just maybe, they could take advantage of those lower interest rates on home and other kinds of loans. And they might start to buy the homes, cars and other things their parents were able to buy without having gone to college and endebting themselves for the privilege.

» Read More...

Report Details Woes of Student Loan Debt - As in the housing market, securitization of student loans led to more aggressive underwriting for borrowers who could not possibly afford the debt they took on, according to a government report.

The 131-page report was formally released by the Education Department and the Consumer Financial Protection Bureau on Friday. It provides new estimates for total outstanding student loan debt: more than $1 trillion in 2012, composed of $864 billion in federal government loans and $150 billion in private student loan debt.

Cumulative defaults on private student loans exceeded $8 billion, a sum from over 850,000 distinct loans.
That total has risen in the last decade as lenders bypassed college financial aid offices and marketed loans directly to students. Students often signed on without realizing the difference between private and government loans or that government loans usually offered better terms, the report says.
Private student loans, for example, usually charge higher interest rates and are harder to discharge in bankruptcy.

» Read More...

Best Way To Minimize Student Loan Debt - Try to avoid overborrowing for your college education. Do not treat loan limits as targets. A good rule of thumb is that your total education debt for your entire college education should be less than your expected starting salary after you graduate. Ideally your student loan debt should be less than half your expected starting salary. Other signs of over-borrowing include borrowing more than $10,000 for each year in school or needing to borrow private student loans.

If you borrow more than your expected starting salary, you’ll have to repay your loans with an alternate repayment plan like extended repayment or income-based repayment instead of standard 10-year repayment. These repayment plans reduce the monthly payments to more affordable levels by increasing the term of the loan, but this also significantly increases the cost of the

loan. For example, switching a Federal Unsubsidized Stafford loan from a 10-year term to a 20-year term will cut the monthly payments by about a third, but it will also increase the total interest paid over the life of the loan by a factor of 2.2. That’s more than double the total interest. A longer repayment term will reduce the monthly payments, but do you really want to still be repaying your own student loans when your children enroll in college?

Find loans, banking benefits and student deals with Simple Tuition.

If you borrow more than twice your expected starting salary, you will be at high risk of defaulting on your debt. You can’t get away from this debt, as the federal government has very strong powers to compel repayment. The federal government can garnish up to 15% of your wages and intercept your income tax refunds without a court order. They can even garnish Social Security benefits. A student loan default on your credit history will make it more difficult to get credit cards, auto loans, home mortgages. It can even affect your ability to get a job or rent an apartment. Student loans are almost impossible to discharge in bankruptcy. A successful discharge requires demonstrating undue hardship in an adversary proceeding, a very harsh standard. Of roughly 72,000 borrowers in bankruptcy in 2008, only 29 had all or part of their federal student loans discharged. That’s 0.04%. You are more likely to get cancer or die in a car crash than to have your student loans discharged in bankruptcy.

Education debt can also have a big impact on your lifestyle after graduation. Students who graduate with no debt are almost twice as likely to go on to graduate and professional school as students who graduate with some debt. Student loans also affect career choices. An extra $10,000 in debt corresponds to a 5% to 6% decrease in the likelihood of a college graduate pursuing a public service career. Students who graduate with excessive debt or who default on their loans are more likely to be depressed. They often delay getting married, having children, buying a car and buying a home. Borrowing excessively can be like having a mortgage without owning a home. The debt may make it more difficult to save for retirement or your own children’s college educations. Live like a student while you are in school so you don’t have to live like a student after you graduate.

So how do you minimize your student loan debt?

Here are several tips on ways to reduce the need to borrow for college costs and cut the cost of borrowing.

Save before enrolling in college.

It is literally cheaper to save than to borrow. Every dollar saved is a dollar less you will have to borrow. If you save $200 a month at 6.8% interest for 10 years, you will accumulate about $34,433. If instead of saving this money, you were to borrow it at 6.8% interest, you will pay $396 a month for 10 years, almost twice as much. The difference is that when you save, you earn the interest, while when you borrow, you pay the interest.

Search for scholarships on free scholarship-matching sites like Fastweb.

Every dollar you win in scholarships is about a dollar less you have to borrow. You can win scholarships even after you’ve already enrolled in college, not just in high school and the earlier grades. Ask each college about its outside scholarship policy. Most colleges will reduce the need-based aid package by the amount of the private scholarships you win. But some colleges will reduce the loans first, letting you save money by substituting scholarships for debt.

» Read More...

Student Loan Debt Crisis: How’d We Get Here and What Happens Next? (US Education)  - The amount of student loan debt and the rate of delinquency have been climbing for years now. If it seems like every new statistic is worse than the last, that’s because it is. Two studies released this week are no exception.

Credit bureau TransUnion says that in the past five years, the average student loan debt each borrower carries has risen 30% to $23,829. More than half of student loan accounts, which add up to more than 40% of the total dollars owed, are in deferral status. This is just a temporary reprieve; students can defer for only a few years before they have to repay.

The trouble is, many of them aren’t doing so. FICO Labs found that delinquencies rose by 22% in five years. For the newest group of loans it studied, delinquency rates are 15.1% — higher than the 11% cited by the Federal Reserve in a November report. Like the Fed’s study, the FICO analysis doesn’t include loans that are in a deferred status — which means the number of people who can’t afford to pay back that money may be almost twice as high as what the official delinquency rates reflect.

This situation obviously can’t be sustained over the long term. “I think a few more years and it’s going to be a general crisis,” says Barry Bosworth, an economist at the Brookings Institution. Interest rates are unusually low right now; when they rise, more borrowers who were just keeping their heads above water are liable to become delinquent.

Note EU-Digest: some European Governments like that of the Netherlands have also started to move away from Government subsidized student support and opted for a privatized student loan system. Given the results obtained in the US with this privatized loan system it does not seem to be the proper way to proceed.

» Read More...

HR 432, Restoring Bankruptcy Protection Rights To Student Loan Borrowers - Last Wednesday, HR 432, which would allow private loans to be discharged in bankruptcy, was introduced by Congressmen Danny Davis (D-Ill.) and Steve Cohen (D-Tenn.). This is the fifth time that that this type of legislation has been presented for passage.

As most of my readers are aware, I am in full favor of restoring bankruptcy protection rights to borrowers with private student loans. The same goes for federal loans, too. However, there are valid concerns about the potentially, negative consequences of a bill like this passing - this is always the case when legislation is passed. That's to say, the outcome can result in unforeseen problems. The most significant concern I have is the following: if the bill passes, Congress and higher education policymakers might pat themselves on and declare, "The problem is

solved, so there is nothing to worry about now." That is not what we want our dear Congressmen, Congresswomen, and policymakers to conclude! Far from it.

And, as I've mentioned previously, the lenders, who are culpable - just as the U.S. government is - in creating this crisis, would not be held accountable if this law were passed. Furthermore, bankruptcy is not a walk in the park. It is a difficult procedure, which would in the end hurt the borrowers (not to mention taxpayers, too).

Again, I want to be clear - bankruptcy protection rights need to be restored. In fact, they should have never been taken away in the first place. Indeed, they were taken away as a result of false claims made about scores of doctors and attorneys, with high levels of student loan debt, who purportedly rushed to bankruptcy attorneys, declared bankruptcy, and got off the hook in - if memory serves me - the late 1980s and 1990s. Based upon extensive research I have done, searching to find proof of this fact, I haven't found a shred of evidence that confirms the claim. In fact, the argument reminds me of President Reagan's problematic description of the black "welfare queen" who, so he fallaciously claimed, abused the welfare system, bought fancy cars, flashy clothing, and so forth. While there are people who do abuse the welfare system, the majority of recipients use the support to feed and clothe their families. In addition, these people, who receive a minimal amount of support from the government, are also the working poor, a class of people in the U.S. that continues to grow - unfortunately - exponentially. Furthermore, the majority of welfare recipients are not African Americans, but poor, whites who live in the South in rural areas. Mind you, whites make up the majority of Americans, but it is a important reminder of how this remark by President Reagan became part of the national conversation as an accepted truth, one of which has had negative ramifications for the welfare system and those who receive support from it. This assertion led to an aggressive dismantling of the system. Naturally, the same goes for the myth that countless doctors and attorneys recklessly declared bankruptcy after they earned their degrees.

The bill is currently under review by the House Committee on the Judiciary.

What do you think? Will it pass, and if so, will the results be positive? Why or why not?

» Read More...

Student Loan Debt Could Cripple Economy For Decades - The price of a college education has been climbing at a substantially higher rate than inflation for years; meanwhile, the value of a college degree has been falling. That’s why thousands of debt-laden college graduates are facing the worst economic bust to plague the United States since the housing bubble burst.

A recent report from the Center for College Affordability and Productivity, entitled “Why Are Recent College Graduates Underemployed?”, refutes the oft-repeated theory that college educated Americans have the potential to earn substantially higher lifetime incomes than their uneducated peers. In fact, the report indicates that many college-educated Americans are woefully underemployed because “the growth of supply of college-educated labor is
exceeding the growth in the demand for such labor in the labor market.”

From the report: 

• About 48 percent of employed U.S. college graduates are in jobs that the Bureau of Labor Statistics (BLS) suggests requires less than a four-year college education. Eleven percent of employed college graduates are in occupations requiring more than a high-school diploma but less than a bachelor’s, and 37 percent are in occupations requiring no more than a high-school diploma;
• The proportion of overeducated workers in occupations appears to have grown substantially; in 1970, fewer than one percent of taxi drivers and two percent of firefighters had college degrees, while now more than 15 percent do in both jobs;
• About five million college graduates are in jobs the BLS says require less than a high-school education;
• Comparing average college and high-school earnings is highly misleading as a guide for vocational success, given high college-dropout rates and the fact that overproduction of college graduates lowers recent graduate earnings relative to those graduating earlier;
• Not all colleges are equal: Typical graduates of elite private schools make more than graduates of flagship state universities, but those graduates do much better than those attending relatively non-selective institutions;
• Not all majors are equal: Engineering and economics graduates, for example, typically earn almost double what social work and education graduates receive by mid-career;
• Past and projected future growth in college enrollments and the number of graduates exceeds the actual or projected growth in high-skilled jobs, explaining the development of the underemployment problem and its probable worsening in future years;
• Rising college costs and perceived declines in economic benefits may well lead to declining enrollments and market share for traditional schools and the development of new methods of certifying occupation competence.

Meanwhile, over the past five years the average amount of student loan debt accrued by college students has risen by 30 percent to $23,829. More than half of student loan holders have currently deferred student loan payments, which is only a temporary solution for struggling degree holders.

Some economists expect the American economy to struggle for decades under massive student loan debts because student loans are almost impossible to discharge in bankruptcy and the government will collect by garnishing the paychecks and tax refunds of those who fail to pay. Furthermore, being underwater on student loans can harm a person’s credit score, making it more expensive for them to get loans for homes or vehicles.

As more and more Americans struggle to pay back student loans while underemployed, the economy as a whole will suffer, since the purchases of first homes and other durable goods are put off indefinitely.

Source : personalliberty.com

» Read More...

Where are Best Schools for Veterans? - Sadly, there is no school that's exclusively for veterans only. A school for veterans just doesn't exist. I'm currently in class now as well as in my class you will find about 29 of us. three of us are veterans. Immediately I felt some kind of bond or connection with them considering that they have seasoned the army the same as I have.

Even in undergrad after i was acquiring my Bachelor's diploma, discovering someone that was a veteran was far and couple of in between. Simply since no one just went around on a loud speaker saying "I AM A VETERAN"!

Which means you never know who's a veteran going for walks around campus till you discuss with them they usually say items which can be distinct in your navy department.

As an illustration, I had been in the U.S. Navy, therefore if I commence a discussion with an individual plus they say terms like "shipmate" and "head", I know that they are clean out of the Navy. In fact that would be awesome if there was a school for veterans! It will be just like currently being while in the navy together with the whole camaraderie and all.

Although not getting a school for veterans is considerably an excellent point. I am going into a community university and i obtain the likelihood to fulfill so many folks!

Similar to while in the armed forces.

Despite the fact that a school for veterans does not exist, a veteran can head to any university that may settle for the GI Invoice.

And have faith in me, which is nearly every single university simply because meaning they're obtaining your tuition Assured through the armed forces.

No person, and that i indicate No one is going to move up guaranteed money, not even educational institutions! Opposite to popular belief, faculties are in enterprise to make cash.

Since I think over it, if somebody commenced a school for veterans, they might make money each and every semester.......assured! Any person need to think of doing that......

But don't allow not have a university particularly for veterans deter you from heading to highschool. I am going and that i get E-5 BAH each and every month which i go! And that's on top of them paying out my tuition and giving me a e-book stipend.

Now they will not spend you on holidays, or throughout breaks, like spring break or fall breaks. Mostly any split among courses you will not receives a commission.

Which sucks since I had been receiving accustomed to obtaining E-5 BAH just for likely to school right up until I spotted I had been heading to have significantly less than 50 percent of that in the months of December and January.

Less than 50 % I explain to ya!

I have a family to feed and my partner and that i each go to school entire time and acquire GI rewards. So most of us endure financially throughout these breaks.........which compelled me to discover a dietary supplement similar to this website.

Do not depend entirely on the government. If you're one you can make it. But when you do have a household, search for locating a dietary supplement to your income for the duration of those breaks like I have with different streams of cash flow similar to this site.

It is possible to supplement your earnings using a website way too, if you would like, to be able to get required revenue flowing into your own home.

So let's wrap this up........ A school for veterans does not exist, but definitely go to faculty to obtain that diploma and have that money!

Acquiring paid out to visit faculty! You cannot defeat that by using a stick!

And whilst you are at it, health supplement that income in the course of those dry months by obtaining an extra stream of income........like blogging!

That is what I did!
By Shun Smith

» Read More...

Get Ready for the Student Loan Bubble to Rock Obama's Fragile Economy - Student loan debt is nothing more than slavery. The promise of a good education and easy money has many students going tens of thousands of dollars in debt without ever having a significant income all thanks to the federal government's program to make education obtainable to all. The only thing that is truly obtainable in programs like these is trouble down the road of many who buy into the promises of this government program.

This year, student loan debt may mean more trouble for the troubled US economy.

Fair Issac reports:

Research by FICO Labs into the growing student lending crisis in the U.S. has found that, as a group, individuals taking out student loans today pose a significantly greater risk of default than those who took out student loans just a few years ago. The situation is compounded by significant growth in the amount of debt that new graduates are carrying.

The delinquency rate today on student loans that were originated from 2005-2007 is 12.4 percent. The comparable figure for student loans that were originated from 2010-2012 is 15.1 percent, representing an increase in the delinquency rate by nearly 22 percent

See the crisis brewing as another easy money lending plan delivered to you by the federal government in the name of fairness threatens the entire economy just like the housing bubble eight years ago.

You know who owns all the student loan debt now, so it will be the American tax payer, many who don't have a dime of student loan debt, who will be left to bail out these bad loans.

It was just a year or so ago that American students, graduates, and college drop outs hit a significant milestone. There is now over $1 trillion in unpaid student loan debt enslaving people from around the United States. If we are nearing a 20% delinquency rate in student loan repayment, that means we are rising above $200 billion in bad student loans which taxpayers will soon be asked to pay back in the forms of more bank bailouts just like the housing bailouts.

America's borrowing culture is kicking America from every angle.

» Read More...

How To Consolidate Cheap Student Loans? - Today, the cost of higher education is becoming increasingly expensive. Some families may not be able to afford to send their son or daughter for further education. Therefore get a student loan help. There are two main types of student loans available. Government student loans and private student loans. Student loans or federal government funded and administered by the U.S. Department of Education. It is classified under the student aid federal loans. They have very few requirements other than you are a student in an American college or university. International students may also apply if the approval is on a case by case basis.


Each year, the program through student loans pay nearly $ 60 billion making it a good choice for a government student loan. Thus, interest rates are very low. Private student loans are funded and administered by banks and other financial institutions. These lenders offer student loans at an interest rate higher compared to federal student loans. Some common student loans available are from Citibank and Sallie Mae

You are allowed to ask for private student loans and federal education needs your although I would not recommend it. For some students who have a few student loans to repay at the same time, it can be a financial burden on their family finances. This is where student loan consolidation comes in.

Student Loan Consolidation essentially consolidates all your student loans into one loan so that it is easier to manage and make payments. When you find a student loan consolidation whether from the government or the private market, your existing student loans are paid for and cleared by the lender to consolidate student loans. Balances are transferred to the new student loan consolidation. So you start a new loan and only needs to make a single payment each month.

There are several advantages to using student loan consolidation. Interest rates will be lower because it takes the average interest rates of your previous student loans. Thus, due to government legislation, the maximum interest rate can not exceed 8.25 percent.

It becomes much easier to manage a single student loan and payment are easier. Repayment options are quite flexible. To consolidate federal student loans, you can opt to start repaying after you have graduated from school. There are also several other options.

Another beneficial side-effect of student loan consolidation is that it can also improve your credit score. Since you are effectively clearing all your old student loans and taking a new one, your credit score will increase and it is important if plan to take other types of loans in the future ....

» Read More...

Every mother or father understands of the fact that they have to invest lot cash for their child's schooling. Many anticipate these expenses and try to invest less towards college tuition and higher knowledge fees. Not all the mother and father are able to preserve enough cash. It becomes difficult for them to strategy on pension benefits. As a result they send their children to an average or a average higher knowledge, that too after spending lots of money. But there are some brilliant mother and father who gather all the necessary details and invest less accordingly and invest get make their children be a part of in their desire higher knowledge. If you are the mother or father of a college-bound student, you may be thinking and concerned how you could afford for your child's knowledge. To get the children be a part of their desire higher knowledge may impacts the pension plans of some mother and father. In such a situation, grants and sports grants performs vital role in every past or present student's life.

There are ways to cut price on schooling and invest less towards the pension strategy. There are several economical helps available for almost all the mother and father. It is noticeable that many middle and upper-class family members were able to reduce the price of their child's knowledge by planning in enhance. Thus they don't choose any other means for their child's knowledge.

Many mother and father thoughtlessly believe that they will get a solution for economical aid from their child's assistance advisor or from the economical aid night. Unfortunately those mother and father end up in paying large amount than needed. It is said that secondary university assistance therapists are not trained to advice mother and father on economical helps. They are just intended to assist in submitting the types. It is same in the case of economical aid night time. In most cases these ability may not be conscious of the techniques and describing those to aid the mother and father.

One of the significant things to keep in mind before applying is to check whether those educational institutions have the ability to prize grants to their learners, because, most of the educational institutions have very little to provide away. Choosing the right educational institutions in enhance which can provide its best economical aid to the learners can reduce your visit to the university thereby saving your cash.

According to the report from the Division of Education, 90% of the economical aid types are posted with any errors. Every simple and reckless error can end up in rejecting the types. To reprocess your form, it will take another 4 to 6 weeks. As many economical helps are granted on first-come, first-served basis, and publish the types promptly, such errors are likely to happen. Due attention and care while posting such types can help you to helps you to save lots of money. You can even get tax benefits when discussed with a good advisor who understands of techniques and techniques.

» Read More...

Student Loan Consolidation Explained with Play-Doh

Advice and Tips on Getting a Mortgage Loan

» Read More...