Monday, 19 May 2014

Student loan | Schumer urges Congress to allow student loan refinancing | PIX 11

Student loan | Schumer urges Congress to allow <b>student loan</b> refinancing | PIX 11

Schumer urges Congress to allow <b>student loan</b> refinancing | PIX 11

Posted: 18 May 2014 05:47 AM PDT

Chuck Schumer AP

U.S. Sen. Charles Schumer (AP)

ALBANY, N.Y. (AP) — Sen. Charles Schumer is calling on Congress to allow current workers to refinance their student loan debt to get the same interest rates now offered to current students.

The Democratic is pushing legislation that would let students and former students who took out a student loan before 2013 refinance their debt to get an interest rate of 3.86 percent. That's the same rate now offered to new borrowers.

Schumer says the legislation would save 2.5 million New Yorkers an estimated $12.5 billion over the life of their loans. The legislation would apply to both public and private student loans.

The average student loan debt in New York is $30,000.

You May Get A <b>Student Loan</b> Refund | Military.com

Posted: 16 May 2014 10:57 AM PDT

Service members with federal student loans may be eligible for refund of interest and fees if they were mistreated by Sallie Mae and its former subsidiary Navient Solutions.

Under the Servicemembers Civil Relief Act (SCRA), borrowers who are serving the military have special benefits and rights with regard to debt.  This includes a reduction of interest rates on debts incurred prior to military service, and certain protections against legal actions while serving.

Federal prosecutors, acting on behalf , claim that the loan servicers denied SCRA eligible borrowers' interest rate reduction requests, assessed excess interest, and charge unlawful late fees.  In addition, Sallie Mae took legal action against servicemembers without documenting the borrowers military service in the lawsuits.

In two different cases, Sallie Mae (and its former subsidiary) have been ordered to pay $60 million in restitution and  refund up to $30 million in improperly assessed late fees.  Both companies must inform all three major credit bureaus of erroneous information regarding interest-rate overcharges and improper legal judgments, and request that the credit bureaus remove the inaccurate information from the servicemember's credit reports.

The companies must also simplify the process for service members to prove their eligibility under the SCRA statute. While they have always had the ability to verify military service the Defense Department database, the loan servicers instead required substantial documentation.  This created a hardship to accessing the benefits of the law.

Up to 60,000 service members were affected by the unlawful practices.  An independent administrator will be responsible for disbursing the refunds and compensation.  Servicemembers will be contacted directly by the third-party administrator.

Federal prosecutors plan to examine the records of the nation's other large student loan servicers, looking for similar failures to provide SCRA protection to eligible military members.

What does this mean for you?  If you have had a student loan since 2005, and it was serviced by Sallie Mae or Navient, you may be contacted about a possible refund.   You may also have inaccurate negative information removed from your credit report.

At that time, you will need to take steps to verify the legitimacy of the contact.  Unfortunately, that this is exactly the type of situation that could be used by identity thieves to obtain personally identifying information.  I'm not saying that it will happen, but this is you should always be vigilant.

An estimated timeline has not been released.  These huge settlements can take years to be fully resolved.  In the meantime, keep your contact information up-to-date with your loan servicers and credit bureaus.

Make smart choices and educate yourselves about <b>student loans</b> <b>...</b>

Posted: 18 May 2014 09:01 AM PDT

The Bangor Daily News recently ran a story about a young man who slept in his car to help manage his student debt. Clearly, he took his education and financial situation seriously.

Here are some figures from the Institute for College Access and Success, a nonprofit that tracks debt load nationwide. In 2012, the average debt that a Maine student racked up was $29,352, seventh highest in the country. Just over two-thirds of all students at four-year institutions in Maine carried some debt.

The total debt for higher education in the United States was recently reported to be more than $1 trillion; that's larger than all U.S. credit card debt. It's taken on by young adults who may have had no formal instruction in financial planning, and many of them take many years to pay off their debt.

Get help in planning your borrowing from agencies that will help because they want to, not because they want you to pay them. The Downeaster Common Sense Guide to Student Loans is a great place to start. Find it online at www.maine.gov/pfr and click on "consumer guides." Maine residents also may call 800-332-8529 to have a free copy sent by mail.

The guide is filled with solid advice about types of loans — read carefully the part about private versus government-backed loans — plus finding free money for college and repayment options. It also gives some guidance on what you can expect to earn by choosing different majors and whether an advance degree is worth considering.

Your choice of a school can greatly influence the amount of debt you may need to incur. The guide offers some side-by-side comparisons of in-state, four-year institutions; the amount of debt an average student carries at some of those schools may surprise you.

Another source of information is the Finance Authority of Maine. FAME's website ( www.famemaine.com/education) features tips on scholarships, financial aid and help for nontraditional students. Students pursuing careers in education and health fields may be eligible for forgiveness of some of their loan debt if they serve in Maine after completing their studies.

Most education technicians do not qualify for loan forgiveness. However, those working in Chapter One programs may qualify; check with FAME for more information and call 623-3263 or 800-228-3734.

Once in school, there are many ways to reduce the total amount needed to borrow. Living at home, working part-time and staying alert for scholarship opportunities are just three possibilities.

The nonprofit National Consumer Law Center operates what it calls the Student Loan Borrower Assistance Project. Its website ( www.studentloanborrowerassistance.org/) includes a step-by-step guide to dealing with your student loan program. It also tackles tough issues such as bankruptcy and getting out of default.

Last month, the Consumer Financial Protection Bureau fired a warning shot at many lenders in the private student loan market. The bureau objects to a widespread policy termed "auto default," under which a borrower is place in default if a loan co-signer dies or files for bankruptcy. This can happen regardless of a borrower's track record of making payments on time. For more information, visit www.studentloanborrowerassistance.org/?s.

In bottom-line terms, most student debts follow long after graduation. If you feel overwhelmed, get advice from a financial planner.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine's all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

With more than $1 trillion in <b>student loan</b> debt on the books <b>...</b>

Posted: 13 May 2014 10:05 AM PDT

STATEN ISLAND, N.Y. -- A measure that would allow college graduates -- now mired in more than $1 trillion of education debt -- to refinance their federal student loans at a lower rate will be introduced by U.S. Sen. Kirsten Gillibrand.

In New York state alone, college graduates are weighed down by a combined estimated $60 billion in student loan debt, Ms. Gillibrand said, with students on average owing $27,310, according to the Federal Reserve Bank of New York.

"While a higher education remains the clearest path into the middle class, more of our graduates and middle-class families are burdened by student loans than ever before and are struggling to repay a higher amount of debt than ever before," Ms. Gillibrand (D-N.Y.) said Tuesday.

"This high amount of student debt is dragging down our economy, stopping graduates from buying homes and cars or starting businesses and families."

National student loan debt is estimated at $1.2 trillion, she said, surpassing auto loan and credit card debt.

And graduates are having a hard time paying off the loans.

In New York City, an estimated 11.5 percent of student loan holders have balances more than 90 days delinquent, the senator's office said. And 1.46 million city residents, ages 18-34, or 64 percent, have some post-high school education loan hanging over their heads.

Ms. Gillibrand's proposal to permit graduates to refinance their loans at a lower interest rate was included in the Bank on Students Emergency Loan Refinancing Act introduced by U.S. Sen. Elizabeth Warren (D-Mass.) last week.

Ms. Gillibrand said many graduates have interest rates of nearly 7 percent for their undergraduate loans. However, students taking out new undergraduate loans pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act, passed by Congress last summer.

Her legislation would give graduates a six-month window to reduce their rates on all federally-owned student loans.

She noted homeowners and businesses refinance their loans daily.

"This will help to strengthen our middle-class families instead of forcing us deeper into debt," said Ms. Gillibrand. "When we price young people out of a college education, we all pay a price."
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