Wednesday, 13 January 2016

Student loan | Would-be lawyer won't have $260K in student loans erased ...

Student loan | Would-be lawyer won&#39;t have $260K in <b>student loans</b> erased <b>...</b>


Would-be lawyer won&#39;t have $260K in <b>student loans</b> erased <b>...</b>

Posted: 11 Jan 2016 01:05 PM PST

Would-be lawyer won't have $260K in student loans erased; SCOTUS refuses to hear appeal

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Jake&#39;s Economic TA Funhouse: Walker <b>student loan</b> "reforms" don&#39;t <b>...</b>

Posted: 13 Jan 2016 06:25 PM PST

Feeling the heat from Legislative Democrats and advocacy organizations like One Wisconsin Now, and in light of reports that Americans now owe more than $1.3 trillion in student loan debt, Gov Walker felt the need this week to try to look like he was do something on the issue of student loans and the costs of higher education. As a result, Walker introduced a list of proposals intended to show that he also wants to contain higher education costs, with tax incentives and slightly expanded funding for certain grants included.

Gov Walker's press release supplied a list of bills that he says have been or will be introduced by GOP representatives in the Legislature (though there doesn't seem to be any listing for these bills in the Text of Recently Introduced Proposals as of this time). Here's a look at a few of these proposals on student loans and college affordability.

Deducting All Student Loan Interest – authored by Representative John Macco and Senator Howard Marklein, this legislation would eliminate any cap on the tax deduction for student loan interest, which would save student loan debt payers $5.2 million annually when it is fully phased in. This tax deduction would be the most generous of any state in the Midwest with an income tax and benefit roughly 32,000 Wisconsin taxpayers paying off student loans. This deduction also directly benefits middle class Wisconsinites with an average benefit of more than $200 annually for those making between $30,000 and $70,000;

· Increasing Wisconsin Grants for Technical Colleges – authored by Representative Dave Heaton and Senator Sheila Harsdorf, this legislation would increase needs-based Wisconsin Grants by $1 million for technical college students in the biennium or $500,000 annually. This would benefit over 1,000 students throughout the state;

· Creating Grants for Students in Emergency Financial Need – authored by Representative David Murphy and Senator Howard Marklein, this legislation would provide $130,000 to UW System colleges and $320,000 to technical colleges to provide emergency grants to students. This approach has been credited with increasing the likelihood a student finishes his or her degree in these unfortunate situations by increasing student retention;

For selfish reasons, I approve of the proposal on student loan interes, and wish the concept was taken to Congress, because the phase-out level of that tax deduction is at a point where a couple that each earn the median amount for people with a master's degree isn't able to use it. It seems a bit odd to not allow those who put in the work to get their extra education and income aren't able to write off the interest on the loans that helped to make it possible, because they get paid too much with their improved job. The complication is that 32,000 taxpayers writing off $200 a year means a tax break of $6.4 million a year, and given our state's budget problems, that may not be affordable. But I'll at least say it's a start.

On the expense side, these items sound OK at face value, but obviously funding must be found to pay for those items as well. And as Chris Walker at Political Heat notes, the $1 million for the "Wisconsin grants" won't go very far, as the large amount of needs in the state requires a much larger commitment than that.

The bill that Walker touts to will help so-called "need-based" students will fund about 1,000 additional grants. However, last year, more than 37,000 technical college students who were eligible for the grants didn't receive them. Doling out a small amount of grants will help a very small portion of students in dire need, and do little to help the debt crisis facing college graduates.

There are also provisions in Walker's proposals to increase funding for staff that can help find students more internships (the WMC crowd loves their free labor!), and a bizarre unfunded mandate to require schools to send out financial literacy information to students, as well as mail current loan status and cost information to students (which seems to be a waste of time for the schools and a veiled attempt to scare some into not continuing their education once they see the costs and debts involved).

Governor Walker also tried to promote the fact that the last two budgets he has signed has frozen in-state tuition for all UW System institutions, saying that this moved has helped make the universities more affordable for today's students.

According to the Legislative Fiscal Bureau, in the ten years prior to Wisconsin's current historic four-year tuition freeze, tuition increased an average of 8.1 percent across all UW System. Over that same period, tuition had gone up 118.7 percent prior to the freeze that Governor Walker and the Legislature enacted. Compared to the average increases over the prior ten years, across the UW System, students have saved $6,311 because of the freeze. While savings vary by institution, the tuition freeze meant average savings of $2,926 at UW Colleges and savings up to $9,327 at UW-Madison.

Walker's claim of a $9,327 savings over the 4 years at UW-Madison (for example) is sketchy enough- an 8.1% average increase would result in total in-state tuition reaching $12,736 in 2016-17 instead of the $9,327 it is at today (or just over $3,400), and even if the savings are taken in total, it reaches $8,192, not $9,327. That still doesn't mean there isn't relief there, but it's not as much as Walker claims it to be (Pages 20 and 21 of the PDF on the Legislative Fiscal Bureau's paper on UW tuition give a good history of the rates over the last 10 years).

However, it's worth noting that a large amount of those tuition increases between 2001 and 2011 are attributed to cuts in taxpayer funding to the UW System, to allow the total amount of funding and quality for the UW System to stay somewhat consistent. That has not been the case in the Age of Fitzwalkerstan, as the UW's documentation said the one-time benefit savings of Act 10 didn't come close to making up the difference in tuition that was required as a result of Gov Walker's first budget cut in 2011 (it's on Page 21 of that LFB tuition paper). Now the cut of $250 million for 2015-17 has been installed along with the tuition freeze for those two years, meaning that despite general taxpayer funding being around $50 million less for the UW System vs 2013, tuition hasn't been able to be raised to make up that difference, let alone pay for higher costs over the last 4 years.

Walker's claim also assumes that the UW would have used the tuition to offset increased costs in wages and benefits for their faculty and staff, but those increases have been far smaller in the post-Act 10 world, so there wouldn't be a need to raise tuition as much anyway. In fact, it seems quite likely that had Walker decided to adequately fund the UW System since 2011, tuition increases could also have been mitigated or outright avoided. These same goals of putting a lid on tuition would have been able to be done without sacrificing the UW System's quality and potentially reducing access to programs, both of which hamstring the earning ability of students once they get out of college, and their chances of growing the state's economy.

This doesn't even include the crippling of tenure, stacking of the UW Board of Regents with right-wing hacks, and regressive social legislation that has made retaining talent less likely for UW System schools. All of those developments have compromised the UW's ability to produce a high-quality education that allows high-skilled talent to come to Wisconsin for college, and/or want to stay after college ends, and preventing that scenario from occurring would seem to be a much more worthwhile boost to Wisconsin's economy than tuition freezes or being able to write off a few dollars of student loan interest on one's taxes. So while Gov Walker's proposals on student loan repayment and college costs might be a slight improvement from the status quo, it still doesn't come close to making up for the damage his past policies have had on higher education and college graduates in the state.

And this package of proposals also doesn't forgive Walker from avoiding the common-sense solution in the Wisconsin Democrats' "Higher Education, Lower Debt" bill, which would allow college graduates to refinance their student loans into lower interest rates, just like they can with a car, a house, or most other types of debt. Sorry, Scotty, but your misdirection play isn't going to fool any of us outside of the Bubble, and it doesn't come near close enough to handle the real problem of student loan debt and the reduced economic activity that results from that debt.

<b>Student loans</b>: Osborne criticised for &#39;back door&#39; repayments change <b>...</b>

Posted: 25 Nov 2015 09:55 AM PST

Students during a protest calling for the abolition of tuition fees and an end to student debt in Whitehall, London. Photograph: Dominic Lipinski/PA

Students and graduates who have taken out student loans since 2012 will face higher repayments after the £21,000 income threshold at which borrowings must be paid back was frozen for five years.

The controversial change – omitted from the chancellor's spending review speech in the Commons on Wednesday – means that on average a former student will pay £306 a year more in 2020-21 compared with 2016-17.

When the 2012 student loan system was launched, the government pledged that from April 2017, the £21,000 figure would be raised each year in line with average earnings. It now intends to freeze this threshold at £21,000 until April 2021 at the earliest, despite strong opposition in a recent consultation.

Related: Spending review 2015: things you may have missed in the small print

"This increases the financial commitment of borrowers to repaying their loans," the post-consultation report from the Department for Business, Innovation and Skills (BIS) said, announcing the freeze. "In 2020-21 borrowers will be paying £6 per week, or £306 in the year, more than they will be in 2016-17.

"What this means is that graduates would end up paying more each month than the loan scheme previously promised and publicised when students took out the loan," Sorana Vieru, NUS vice-president for higher education, said. "This is yet another betrayal by the government and part of a long list of political measures that shows complete disdain to students and their futures."

Martin Lewis, founder of MoneySavingExpert who chaired the independent taskforce on student finance information, accused the chancellor of not "having the balls to talk about this in the speech and I'm absolutely spitting teeth over this right now".

"This is a retrospective change to student loans, millions of people across the country will have to pay more each month," he told LBC. "This is a change going backwards, it's a change from what they said they would have done when people started going to university.

"It's an absolute disgrace that breaks the fundamental bond of politics that you do not impose retrospective changes. Commercial companies would not have been allowed to do this. This was snuck in the back door, even though he mentioned student loans in the speech."

The business department said it hoped the freeze would increase repayments by £3.2bn over the lifetime of the loans of existing borrowers.

Related: What does the spending review mean for science and innovation?

Labour MP Wes Streeting, the former NUS president who worked with Lewis on the taskforce, said the move "completely changed the financial conditions, retrospectively, that students signed up to in good faith".

"How can students now trust anything the government says about student loans they sign up to? If banks did this to customers, there would be an enormous outcry. This change will hit hardest those graduates on low and middle incomes close to the earnings threshold."

A spokesman for the department said the change has been made to reflect the reality of graduate earnings, which he said hadn't risen as high as they were expected to. "When the £21,000 threshold was set in 2010, assumptions had to be made about earnings growth between 2010 and 2016," the spokesman said.

"While the economic recovery is underway, it is not yet fully reflected in earnings, so the threshold is higher in real terms than originally intended.

"Making this change helps contribute to the current government's debt reduction targets."

Tuesday, 12 January 2016

Student loan | 6 Student Loan Changes for 2016 You Need to Know About ...

Student loan | 6 <b>Student Loan</b> Changes for 2016 You Need to Know About <b>...</b>


6 <b>Student Loan</b> Changes for 2016 You Need to Know About <b>...</b>

Posted: 08 Jan 2016 02:22 PM PST

It's a new year and a brand new start for many of us, full of financial goals and resolutions. It also means new rules, policies, and changes surrounding student loans.

In fact, 2016 stands to bring some big changes for student loan borrowers. If you are working on paying off student loans, learn the six big changes happening for student loans in 2016 that you need to know about.

1. New Way to 'REPAYE' Student Debt

The much talked about Revised Pay As You Earn (REPAYE) program became available on December 17, 2015. Federal student loan borrowers in need of a repayment plan with lower monthly payments now have another option to choose from.

One of the biggest improvements of REPAYE over the original Pay As You Earn program is that it allows an additional 5 million Direct Loan borrowers to obtain relief. That's because under the new plan, borrowers can cap their monthly student loan payment at 10 percent of monthly discretionary income, rather than 15 percent, regardless of when the loans originated.

The REPAYE program will also forgive any remaining debt after 20 years for undergraduate loans. Graduate degree debt will be forgiven after 25 years.

While the new repayment option will afford more borrowers flexibility, there is a downside: Your spouse's income will be considered when determining your monthly payment — even if you file your taxes separately.

2. Variable-Rate Loans Vulnerable to Fed Actions

After months of warning, the Federal Reserve finally raised interest rates, which has a direct impact on consumers with variable-rate loans. What does this mean for you? If you have private student loans or refinanced your loans at a variable rate, you might see an interest rate increase some time this year.

While the Fed rate hike was small, interest rates are expected to increase gradually over time. If you currently have variable-rate loans, you may want to focus on paying those down first or refinance to a fixed-rate loan.

Also, we'll be on the lookout for any federal student loan interest rate changes this spring. Federal student loan rates, which are fixed, are determined each spring for new loans for the upcoming award year, which is from July 1 to June 30 of the following year.

3. Robocallers Can Call You on Your Cell Phone

You used to call me on my cell phone… Your cell phone is no longer reserved for emoji-laden texts or calls to the family. Congress recently gave debt collectors the right to use robocall technology to autodial federal student loan borrowers who haven't made their payments.

Previously, it was illegal for debt collectors to call a cell phone, unless borrowers granted permission. To avoid this awkward and annoying situation, be sure to make on-time payments and avoid default.

4. Loan Servicer Changes

As part of a new bill, Congress will be making some changes in the loan servicer arena. The Department of Education recently received additional funding; as part of the deal, lawmakers are changing the current process to no longer give preference to four student loan servicers: Nelnet, Great Lakes, Navient, and American Education Services.

According to a report on the matter in the Washington Post, "Instead, the department would have to allocate new loans based solely on the quality of a servicers' work and ability to keep borrowers current. That could shift a significant share of business to nonprofit companies, like the Missouri Higher Education Loan Authority and Oklahoma Student Loan Authority."

This is a huge win for nonprofit loan servicers and borrowers alike, ensuring borrowers are paired up with high-quality loan servicers.

5. New President, New Policies

2016 is slated to be a big year for politics. In November, the American people will vote for the next U.S. president.

The election — regardless of your personal political preferences — will have a major impact on student loan legislation and policy. Nearly all the 2016 candidates have a plan to deal with student loan debt.

Sure, these changes won't take effect in 2016, but the candidate that the American people elect this year will have ramifications for student loan borrowers in the future.

6. Perkins Loans Back from the Dead

The federal Perkins Loans program expired in fall of 2015, but was recently renewed with tougher eligibility requirements.

According to Inside Higher Ed, "The legislation would require borrowers to exhaust their eligibility for federal direct loans — both subsidized and unsubsidized — before receiving a Perkins Loan. Existing borrowers would not be subject to such a requirement."

Though the bill is being revived, it's currently being positioned as a calculated shutdown of the program. Perkins Loans are reserved for students in need, so the extension provides some hope, but with restrictions and still no long-term solution.

As these developments and new policies take shape in 2016, Student Loan Hero will keep you updated so you can stay on top of payments and get rid of debt as quickly as possible.

Interested in refinancing your student loans?

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Monday, 11 January 2016

Student loan | Sanders beats the student loan drum. Loudly. - Reuters

Student loan | Sanders beats the <b>student loan</b> drum. Loudly. - Reuters


Sanders beats the <b>student loan</b> drum. Loudly. - Reuters

Posted: 11 Jan 2016 08:41 AM PST

Bernie Sanders wants to know how much you're in debt. Indeed, the Vermont senator positively encourages supporters at his rallies to discuss how much money they owe on student loans. 

Bernie Sanders in Marshalltown, Iowa January 10, 2016. REUTERS/Brian C. Frank

At a forum on climate change in Boone, Iowa on Sunday, an attendee, a university senior "already swimming in debt," asked the Vermont senator to elaborate his plans to lessen the burden of college loan expenses, prompting this exchange: 

"You have millions of people, including people in this room, who are struggling with outrageously high levels of student debt, am I right?" Sanders asked the 550 strong crowd to cheers, inspiring one woman to shout out her own $100,000 student loan burden.

 "$100,000 in debt for the crime of getting an education," Sanders said, as other supporters began yelling out their college obligations.

 "$83,000," one voice shouts. "$60,000," came another.  

 "$120,000, $140,000, $150,000,' others yell. 

 "My wife and I both have Ph.Ds," one man in the crowd said, totaling up to $300,000 student debt for the couple. 

 "I feel like this is a Vermont auction," Sanders joked as participants yelled out their various levels of college expenses–all of which were way higher than the $27,000 that the U.S. federal government estimates as the average student loan debt at a four-year institution. 

 "We're laughing here, but really this is not only not a laughing matter," he said when the crowd finally quieted. 

 "What we're saying is you're going to be shackled in debt for decades because you wanted to get an education," he said.

 Sanders has proposed making tuition at public colleges and universities free of cost, which critics have accused of idealistically ignoring how such a plan would be funded. 

Iowa voters go to their nominating caucuses on Feb. 1.

 

<b>Student loans</b>: Osborne criticised for &#39;back door&#39; repayments change <b>...</b>

Posted: 25 Nov 2015 09:55 AM PST

Students during a protest calling for the abolition of tuition fees and an end to student debt in Whitehall, London. Photograph: Dominic Lipinski/PA

Students and graduates who have taken out student loans since 2012 will face higher repayments after the £21,000 income threshold at which borrowings must be paid back was frozen for five years.

The controversial change – omitted from the chancellor's spending review speech in the Commons on Wednesday – means that on average a former student will pay £306 a year more in 2020-21 compared with 2016-17.

When the 2012 student loan system was launched, the government pledged that from April 2017, the £21,000 figure would be raised each year in line with average earnings. It now intends to freeze this threshold at £21,000 until April 2021 at the earliest, despite strong opposition in a recent consultation.

Related: Spending review 2015: things you may have missed in the small print

"This increases the financial commitment of borrowers to repaying their loans," the post-consultation report from the Department for Business, Innovation and Skills (BIS) said, announcing the freeze. "In 2020-21 borrowers will be paying £6 per week, or £306 in the year, more than they will be in 2016-17.

"What this means is that graduates would end up paying more each month than the loan scheme previously promised and publicised when students took out the loan," Sorana Vieru, NUS vice-president for higher education, said. "This is yet another betrayal by the government and part of a long list of political measures that shows complete disdain to students and their futures."

Martin Lewis, founder of MoneySavingExpert who chaired the independent taskforce on student finance information, accused the chancellor of not "having the balls to talk about this in the speech and I'm absolutely spitting teeth over this right now".

"This is a retrospective change to student loans, millions of people across the country will have to pay more each month," he told LBC. "This is a change going backwards, it's a change from what they said they would have done when people started going to university.

"It's an absolute disgrace that breaks the fundamental bond of politics that you do not impose retrospective changes. Commercial companies would not have been allowed to do this. This was snuck in the back door, even though he mentioned student loans in the speech."

The business department said it hoped the freeze would increase repayments by £3.2bn over the lifetime of the loans of existing borrowers.

Related: What does the spending review mean for science and innovation?

Labour MP Wes Streeting, the former NUS president who worked with Lewis on the taskforce, said the move "completely changed the financial conditions, retrospectively, that students signed up to in good faith".

"How can students now trust anything the government says about student loans they sign up to? If banks did this to customers, there would be an enormous outcry. This change will hit hardest those graduates on low and middle incomes close to the earnings threshold."

A spokesman for the department said the change has been made to reflect the reality of graduate earnings, which he said hadn't risen as high as they were expected to. "When the £21,000 threshold was set in 2010, assumptions had to be made about earnings growth between 2010 and 2016," the spokesman said.

"While the economic recovery is underway, it is not yet fully reflected in earnings, so the threshold is higher in real terms than originally intended.

"Making this change helps contribute to the current government's debt reduction targets."

Saturday, 9 January 2016

Student loan | Experts Debate Keys to Student Loan Crisis - Higher Education

Student loan | Experts Debate Keys to <b>Student Loan</b> Crisis - Higher Education


Experts Debate Keys to <b>Student Loan</b> Crisis - Higher Education

Posted: 07 Jan 2016 07:11 PM PST


by Diverse Staff

010816_Student_DebtA recent report by the Brookings Institute revealed that low earnings, not high levels of individual debt, are to blame for the high default rates of student loans.

Debtors who borrowed under $5,000 were nearly twice as likely to default on their student loans as those who borrowed over $100,000. "The fact is that default is highest among those with the smallest student debts," wrote Susan M. Dynarski, the report's author. "Of those borrowing under $5,000 for college, 34 percent end up in default. This default rate actually drops as borrowing increases. For those borrowing more than $100,000, the default rate is 18 percent. Among graduate borrowers — who tend to have the largest debts — just seven percent default on their loans."

The reason, Dynarski wrote, is because the higher borrowing is associated with career paths that will yield higher earning, and thus, higher potential to repay the debt. "These borrowers spent many years in college, and so racked up many years of debt. But they built up a lot of human capital during their college careers (and brought a lot with them in the first place), which pays off in the labor market," she reasoned.

Conversely, she wrote, "The small borrowers tend to be those who spent just a year or two at a for-profit or community college. They spent little time in college, and so racked up little debt. But they also built up little human capital (and had low stocks to begin with), and so do relatively poorly in the labor market."

But Sara Goldrick-Rab, a professor of education policy studies and sociology at the University of Wisconsin–Madison, wrote in a rebuttal blog that therein lies the key issue for many of those with the lowest amounts borrowed ― it is not that their salaries are simply lower than those who take on more debt, it is that the failure to obtain postsecondary credentials keeps them in a pattern of lower earning potential and handicaps their future children in addition to themselves.

"Over time we have eroded grant support to the poor and saddled them with loans," she wrote. "They now face tremendous, predictable risk [of trying, but not completing college], and that's a problem we can and should deal with."

Dynarski wrote that lengthening the repayment timeframe will help solve the problem, but Goldrick-Rab countered, "Student debt is a serious problem but it is ultimately an educational policy concern and cannot simply be treated as a finance problem to be solved with the usual finance tweaks," saying free college proposals, not tweaking loan repayment options, is the key.

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Friday, 8 January 2016

Student loan | Where is Student Loan Debt the Worst? | Realtor Magazine

Student loan | Where is <b>Student Loan</b> Debt the Worst? | Realtor Magazine


Where is <b>Student Loan</b> Debt the Worst? | Realtor Magazine

Posted: 07 Jan 2016 12:00 AM PST

First-time buyers are called the 'missing link' in real estate's recovery. Research shows that the majority of millennials strive for home ownership, but various factors keep them from buying right now. One big cause for concern is the burden of student loan debt.

Read more: The Real Reason Millennials Aren't Buying

NAR Research recently took a look at the impact that student loan debt is having on young buyers, and what region of the U.S. is seeing the highest amount of student loan debt. They found that in 2015, 25 percent of first-time buyers under the age of 34 said saving for a down payment on a home was the hardest step in the process. 58 percent of this group mentioned that student loan debt kept them from buying a home.

Certain regions are faring better than others. The South Atlantic states, Delaware, Maryland, Washington, D.C., West Virginia, Virginia, North Carolina, South Carolina, Georgia, and Florida, had the lowest median student debt at $15,000. On the other hand, the East South Central region, which includes Kentucky, Tennessee, Mississippi, and Alabama, had a median student loan debt of $70,000.

According to NAR Research, this contrast "warrants further research into how the number of jobs and salaries on the market affect student loan debt thus delaying younger buyers from purchasing a home for three to five years."

Source: "Student Loan Debt Hampering Home Buying: A Regional Perspective," NAR Economists' Outlook Blog (Jan. 5, 2016)

New York starts paying <b>student loan</b> debt - Bankrate.com

Posted: 06 Jan 2016 09:09 AM PST

iStock.com/mj0007

iStock.com/mj0007

Recent grads in New York are getting a break on student loans.

New York state recently started offering a loan forgiveness program that provides up to 24 months of relief for federal student loan debt.

What's the program?

Called the "Get on Your Feet Loan Forgiveness Program," it aims to help out recent grads with federal student loans. Those individuals may be struggling to find a job or having trouble paying off their loans with their current salary.

The program went live on Dec. 31 and offers up to 2 years of relief for federal student loan debt.

If you're financing college through a personal loan, check out the loan rates at Bankrate.com.

"Ensuring students are able pay for college and not saddled with debt is critical for both their individual success and the continued economic growth of New York State," Governor Andrew Cuomo said in a statement.

The program's requirements

There are some restrictions on who can participate in the loan program. For starters, you're only eligible if you live in New York state, graduated from a New York college or university and earn less than $50,000 per year.

And you must be enrolled in a federal-income repayment plan, which typically caps payments to 10% of your discretionary income, according to the Get on Your Feet New York State program site.

The program also requires that applicants:

• Be a U.S. citizen.
• Graduated from a New York State high school or have a New York high school equivalency diploma.
• Have no higher than a bachelor's degree at the time of application.
• Apply within 2 years of receiving an undergrad degree.
• Be current on all federal or New York state student loans.

Notably, this program is only for those with federal student loans. If you have a personal loan, you're still obligated.

Such personal loans are private student loans that are funded by banks, credit unions, or other types of lenders. Your ability to qualify for and borrow a private student loan may be based on numerous factors that can include your credit history, whether or not you choose to have a co-signer, your co-signer's credit history, your choice of school, and your course of study.

If you're augmenting a federal student loan with a personal loan, consider the rates at Bankrate.com.

Where to apply

More than 2,500 graduates from the class of 2015 already have applied through the program. By 2020, it's expected that more than 24,000 grads will be participating, according to a program press release.

If you're interested, you can apply through the New York State Higher Education Services Corp.

Follow me on Twitter: @MitchStrohm

<b>Student Loan</b> Debt Relief Applications Accepted By N.Y. State <b>...</b>

Posted: 05 Jan 2016 06:11 PM PST

Photo Credit Thinkstock

ALBANY, N.Y. (CBSNewYork) — New York state has begun accepting student loan forgiveness applications for students who attended college in the state in the past year.

Gov. Andrew Cuomo announced last week that the state began accepting applications for the Get On Your Feet loan forgiveness program on Thursday, Dec. 31. The program allows for up to 24 months of federal student loan debt relief to recent college graduates living in the state.

"Ensuring students are able pay for college and not saddled with debt is critical for both their individual success and the continued economic growth of New York State," Cuomo said last week. "With this program, we are telling recent graduates: if you invest in New York's future, we will invest in yours."

The governor's office said multiple studies have shown that helping students pay for college is critical to ensuring their future success. Students with debt are less likely to start a small business or buy a home, and the consequences of defaulting on a loan can be devastating, Cuomo's office said.

The Get On Your Feet program supplements the federal Pay As You Earn repayment program, and allows eligible college graduates living in New York state to pay nothing on their student loans for their first two years out of school, Cuomo's office said.

To qualify, applicants must have earned their degree from a college or university in New York state no earlier than December 2014, have an adjusted gross income of less than $50,000 a year, and be enrolled in the federal Income Based Repayment plan or Pay As You Earn Plan.

Recipients will have a maximum of 24 payments, equal to their monthly student repayment amount, paid by the program on their behalf, the governor's office said.

Applications are accepted year-round, the governor's office said.

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Tuesday, 5 January 2016

Student loan | Unleash the next generation of homeowners: Renegotiate student ...

Student loan | Unleash the next generation of homeowners: Renegotiate <b>student</b> <b>...</b>


Unleash the next generation of homeowners: Renegotiate <b>student</b> <b>...</b>

Posted: 05 Jan 2016 05:00 AM PST

Drive through the neighborhoods of Ohio.  You will observe thousands of vacant homes devoid of a generation of aspiring young homeowners. The opportunity for this generation to buy a first home has been thwarted by sluggish income growth in the job market often made worse by the overcharge of student loan debt.  That debt has put home ownership out of reach for millions of credit worthy borrowers.

All across America, this story repeats itself.  Millions of habitable homes sit unoccupied. In 2014, the percentage of houses sold to first time homebuyers dropped to 33 percent, the lowest level in three decades. These separate but related conditions retard economic growth, depressing home purchases across our country.  These trends must be reversed. Debtors must become equity stakeholders.

ADVERTISEMENT

The current slow recovery is the first since World War II where housing has not led our economy forward. At the end of last year, nearly 17 million homes sat vacant in the United States. That's enough empty homes to house the combined populations of Ohio and Indiana. Vacant structures also drag down adjacent property values and contribute to a downward spiral in neighborhood stability and worth.

Last year, more than 57,000 homes sat vacant in my congressional district alone.  Just in October 2015, there were more than 5,300 homes in my home state of Ohio that remained on the market for nine months or longer. Those homes have a combined value of $1.9 billion. These under-invested assets represent a vast untapped source of wealth creation for families and our nation.

Meanwhile, student debt in the U.S. currently totals $1.3 trillion. More than 40 million Americans have at least one outstanding student loan, a number that is up significantly from 29 million Americans just ten years ago. Student loan debt is weighing down millions of young families, effectively locking out their buying power to purchase their first home, the most common way in which Americans have grown wealth in previous eras.

There is a popular lending instrument already in widespread use that could serve as a bridge for credit-worthy student borrowers to become homeowners: the home mortgage. This common lending tool has the power over time to transform the stream of student loan repayments by credit worthy individuals into home ownership. 

Building a road forward for student debt holders through the home mortgage instrument would require cooperation of three federal departments: the Department of Education, Department of Housing and Urban Development (HUD), and the U.S. Treasury Department.  This presents a surmountable challenge. An initial test of this concept could take the form of a pilot project directed through HUD's Federal Housing Administration (FHA).  Credit worthy federal student debt holders could be connected with available housing properties held by or serviced through the federal government or local county land banks.

By arranging prudent financing alternatives that recalculate terms, debt-to-income ratios, mortgage interest rates and other factors, FHA could transition shorter-term student debt into longer term home ownership. The economic and financial gains are potentially even greater in the long run as housing values rise. Over time, participants would help restore neighborhoods, transform their debt to equity, buoy property values locally and improve the FHA ledger simply by maintaining and investing in a home.

The status quo has created a permanent debtor class of millions of student borrowers. This is not in the public interest. Instead, America needs home equity stakeholders. If America continues to do nothing, thousands more student debt holders will live, work, and eventually retire without ever escaping the burden of their sunk debt. At the same time, first time housing purchases will continue to be retarded, and our neighborhood housing stock deteriorate.

Congress has the power to unleash the debt stranglehold on the next generation. Let's transform student loan repayments into equity stakeholds. We have the resources, the power, a compelling economic interest, and a moral responsibility to do something about unshackling the aspiring generation. Let's get started.

Kaptur has represented Ohio's 9th Congressional District since 1983. She sits on the Appropriations Committee.

New York will pay your <b>student loan</b> bills for two years | WTVR.com

Posted: 04 Jan 2016 03:18 PM PST

NEW YORK — It just got a little easier for recent grads to make it in New York.

The state will pay up to two years of student loan bills for residents who are struggling to pay down their debt.

The loan forgiveness program, called "Get on Your Feet" by the Cuomo administration, aims to help out grads who maybe haven't landed their dream job just yet. You're only eligible if you earn less than $50,000 a year and live in state.

You must also have graduated after December 2014 from a college or university in New York and you must be enrolled in an income-based repayment plan with the federal government. These plans typically cap your monthly bill at 10% or 15% of your discretionary income, but are only an option for those with a lot of debt and little earnings.

New York will only cover the cost of your monthly bill on federal loans. If you borrowed from a private lender, you're still on the hook for those payments. The program went live on December 31 and you can apply online.

"Ensuring students are able pay for college and not saddled with debt is critical for both their individual success and the continued economic growth of New York State," said Governor Andrew Cuomo.

New York is the first state to offer loan forgiveness on the basis of income. But at least 35 other states have a similar program that's based on the type of industry you work in and where you live, according to the National Conference of State Legislatures. They aim to encourage people to live and work in underserved communities and take public service-oriented jobs like teachers, social workers and health care workers.

The governor's office estimates that 7,100 recent grads will take advantage of the New York program this year. It expects 24,000 grads will be enrolled by 2020 and at that point cost about $41.7 million. It's unclear whether the income threshold will go up over time and the governor's office did not return a call requesting comment.

In 2014, 61% of New York grads left school in debt, averaging an amount of $27,822, according to the Institute for College Access and Success.

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In <b>Student Loan</b> Default? How to Fix Your Credit | Refinance and <b>...</b>

Posted: 30 Dec 2015 05:33 PM PST

When you go into student loan default, your credit takes a major hit. But if you're reading this, you probably already know that.

If student loan default has happened to you, know that the world isn't over. You can fix your credit and you will be able to borrow money again in the future, so long as you take the steps necessary to repair your credit.

These steps include getting out of default, paying your bills on time, paying off your debt, and eventually applying for credit as needed to improve your debt-to-credit ratio. I won't lie: this can be a lengthy process. Once you get started, however, you'll see that in just a few months, your score will start to go up.

How to Recover From Defaulted Student Loans

Step 1: Getting Out of Default

In order to repair your credit, you need to get out of student loan default first. When you default on your loan, it's sent to collections, and you will be notified. When you are notified, usually by mail, you should call the phone number on the letter sent to you to learn about your options.

Typically, you have three options in this scenario::

1. Pay Your Loans Off

The one simple way to get out of student loan default is to pay off your loan in full. This is obviously easier said than done, as the average student loan balance is in the tens of thousands of dollars.

However, if you have a family member who will help you out by loaning you money at a lower interest rate, or if you qualify for a personal loan, this might be a reasonable option. (Keep in mind getting a loan if you're already in default is unlikely).

2. Rehabilitate Your Loans

You might be able to work with your loan servicer or collections agency on a plan to make smaller monthly payments. When you call, explain that you want to get out of default and can only pay a certain amount each month.

The benefit of loan rehabilitation is that as long as you make your monthly payments on time for a certain period of time, as agreed upon with the collections agency, they will most likely be willing remove the default status from your credit report as well.

3. Consolidate Your Loans

If you have several student loans, you can choose to consolidate them into one, which will count as a payment and bring you out of default. You usually have to make three on-time payments, work out a payment plan with your servicer, or enroll in an income-driven repayment plan before you're eligible to consolidate.

Step 2: Pay Off Other Debts

Your credit utilization makes up 30 percent of your credit score, so if you have other debts such as credit cards, your next step should be to lower those balances once your student loans are under control..

If your credit card interest rates are well above your student loan interest rates, it would be wise to focus on paying those as quickly as possible, since mathematically speaking, paying off the higher interest rate debt first will save the most money over time.

Additionally, if your credit cards are maxed out, it will not reflect well on your credit score. You need to have as much "space" -- or available credit -- as possible. Consider opening a new line of credit in addition to paying down your loans so you can increase your debt-to-credit ratio (just don't rack up any new debt).

Step 3: Pay All Your Bills On Time

If you struggle with your other bills, like your phone bill or your mortgage, it's time to sit down and take a long hard look at your finances to ensure you always pay your bills on time. It's more important than you might think: your payment history is the most significant factor of your score at 35 percent.

If you are late on a payment, it will have a negative impact on your credit. Pay on time, every time and your credit score will improve as time passes.

Step 4: Rinse, Repeat, and Be Patient

Unfortunately, building up your credit is not an easy or quick process. You have to consistently repeat the steps above to make your score continue to rise. This means always paying your bills on time, maintaining low credit card balances, and periodically  opening new lines of credit (that you don't max out) so that your debt- to- credit ratio and credit mix improve.

If you do all of these things and are patient, you will be well on your way to repairing your credit after student loan default. Many people have done it before you, and although going into default is never a good thing, you definitely have options for having financial success in the future.

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