Wednesday 30 December 2015

Student loan | Cuomo Announces Student Loan Forgiveness Program - WIBX 950

Student loan | Cuomo Announces <b>Student Loan</b> Forgiveness Program - WIBX 950

Cuomo Announces <b>Student Loan</b> Forgiveness Program - WIBX 950

Posted: 29 Dec 2015 01:37 PM PST

Andreas Rentz, Getty ImagesAndreas Rentz, Getty Images

New York State will begin accepting applications for the new 'Get On Your Feet' Loan Forgiveness Program on December 31st.

The program is part of Governor Andrew Cuomo's 2015 Opportunity Agenda.

It offers 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," Governor Cuomo said. "With this program, we are telling recent graduates: if you invest in New York's future, we will invest in yours."

More than 2,500 graduates from the class of 2015 have already registered to apply for the program. Once fully implemented in 2020, more than 24,000 recent graduates are expected to participate.

For more information on the program, visit ny.gov/getonyourfeet

Phase One Of NY Responds Complete

New York State Unveils <b>Student Loan</b> Relief Program | Clutch <b>...</b>

Posted: 30 Dec 2015 09:15 AM PST

Refinancing <b>Student Loans</b> and Credit Scores: What You Need to <b>...</b>

Posted: 24 Dec 2015 12:48 AM PST

Now, more than ever, various private lenders are helping student loan borrowers refinance at lower rates and save thousands of dollars in interest — that is, borrowers with good credit.

Whether you are thinking about refinancing or in the process of doing so, you may wonder how your credit impacts your options. How important is credit, really? And how will refinancing affect your credit?

Read on to learn five things you need to know about credit and refinancing your student loans.

1. You probably need good credit to qualify.

Refinancing companies vet their borrowers to ensure they can take on the financial commitment of paying back a new loan.

In general, refinancing companies tend to have more stringent requirements than that of federal loans. One of the major ways lenders determine if you are an eligible candidate for refinancing is your credit score.

Your credit score is a numeric representations of how responsible of a borrower you are. Your FICO credit score, which is commonly the credit score lenders examine, is determined by a variety of factors:

  • Payment history (35 percent)
  • Amounts owed (30 percent)
  • Length of credit history (15 percent)
  • New credit (10 percent)
  • Credit mix (10 percent)

FICO scores range from 300 to 850 — the higher score you have, the better. Each lender will have a different credit score requirement, but typically you'll want to have a credit score of 700 or above.

Before refinancing, check the lender's eligibility requirements, as some may be higher or lower than this standard. Generally, however, bad credit will make it difficult to get approved for refinancing.

2. A credit check-up can help.

Before you refinance, it's important to do a credit check-up: audit your credit reports to make sure everything is accurate and take steps to improve your credit.

Start by getting your free credit scores on a site like Credit Karma. In addition, get your free credit reports from the three major credit bureaus at AnnualCreditReport.com and look for any errors. If there are any mistakes, you'll want to take the necessary steps to remove those incorrect entries from your credit profile.

In addition, take a look at your credit behavior:

  • Do you always make your payments on time?
  • Do you carry high balances?

Being a responsible credit users means making on-time payments each and every time. Even just one late payment can seriously ding your credit score.

To make the process easier, sign up for auto payments, which deduct your monthly payments from your bank account. If you don't think that will work for you, at least sign up for online reminders.

While payment history is very important, so is credit utilization (amount of credit available vs. used). It's important to keep your balances low and pay them down each month to keep your credit utilization ratio low.

So if you have a $10,000 credit limit and are maxing out $10,000 each month, you will look like a risk to lenders. Typically, you should spend less than 30 percent of your credit limit. In this case, that would be $3,000. Avoid maxing out cards and strive to pay off your balance in full.

3. Your credit score is just one factor for getting approved for refinancing.

Okay, okay, you get it. Your credit score is important. But it's not the only factor that lenders consider when approving borrowers for refinancing. Many lenders look at income, employment history, and savings as well.

So while it's important to have a good credit score in order to refinance, it's also just as important to maintain positive cash flow and employment status as well. For better or worse, your credit score is just one facet of your eligibility.

4. Find out your estimated interest rate without affecting your credit score.

You could save thousands of dollars through refinancing, but how do you know how much you will really save until you know your potential rate? Good news: Some lenders, like SoFi and Earnest allow you to check your potential rate, without it affecting your credit score.

This is typically referred to as a "soft" credit pull, which will not harm your credit. So once you check out your interest rate, you can make an informed decision to move forward (or not) while your credit score remains intact.

5. Refinancing could affect your credit score.

Once you do decide to apply for refinancing, you will have a hard pull on your credit. Hard pulls temporarily knock your credit score down by a few points.

In addition, refinancing means that your old loans will be paid off — resulting in a closed account and potentially higher utilization ratio if you have other debts. However, it's unlikely your score will drop dramatically and the benefits of significant savings could far outweigh the costs.

Your credit score plays an important part in the refinancing process. Stay on top of your payments, keep your balances low, and periodically check out your credit scores and reports. Doing so can help you get approved for financial opportunities like refinancing, which can ultimately help you save money.

Photo credit: GotCredit

Here are the top 6 lenders of 2015!

Lender

Rates (APR)

Eligible Degrees

  

1.90% - 7.25%

Undergrad & Graduate

 Learn More

1.90% - 7.24%

Undergrad & Graduate

 Learn More

2.35% - 8.89%1

Undergrad & Graduate

 Learn More

1.90% - 6.93%

Undergrad & Graduate

 Learn More

1.90% - 6.25%

Undergrad & Graduate

 Learn More

1.90% - 6.25%

Undergrad & Graduate

 Learn More
Check out the testimonials and our in-depth reviews!

Check out our in-depth reviews!

<b>Student Loan</b> Forgiveness &#39;Get On Your Feet&#39; Program Details

Posted: 30 Dec 2015 02:27 AM PST

146835613Cheryl Casey/ThinkStock/TSM

Are you sitting on a mountain of student loan debt? Well New York Governor Andrew Cuomo wants to help you out. Here's how to find out if you're eligible for the "Get On Your Feet" forgiveness program.

The "Get On Your Feet" program offers up to 2 years of federal student loan debt relief to recent college graduates living in the state. According to ABC 7, applications will begin being accepted on December 31st.

"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 Cuomo said. "With this program, we are telling recent graduates: if you invest in New York's future, we will invest in yours."

To qualify, applicants must have earned an undergraduate degree from a college or university located in New York State in or after December 2014, have an adjusted gross income of less than $50,000, and be enrolled in the federal Income Based Repayment plan or Pay as You Earn plan. Click Here to learn more.

How To Find Out If You're Eligible For A Ambit Energy Refund
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Tuesday 29 December 2015

Student loan | 4 Steps to Take When Your Student Loan Servicing Company ...

Student loan | 4 Steps to Take When Your <b>Student Loan</b> Servicing Company <b>...</b>

4 Steps to Take When Your <b>Student Loan</b> Servicing Company <b>...</b>

Posted: 28 Dec 2015 11:26 AM PST

After paying my student loans for a few years, I received a letter notifying me that my student loans were being transferred to another loan servicer. What? Whyyyy?

Even though I didn't particularly love my student loan servicer, I had absolutely no choice in the matter and experienced very little support when my largest financial obligation switched hands in a blink. I wasn't sure what to expect. But now that my loan servicers have changed twice, I know what to do.

If you're in the same situation, follow these steps to transition to your new loan serving company smoothly.

What Is a Student Loan Servicer?

A loan servicer is a company that manages your student loan payments. Your loan servicer is assigned to you by the U.S. Department of Education, so you can't "shop around" for the best loan servicer. You deal with what you're given, for better or worse.

Currently, there are 10 student loan servicing companies that manage student loan repayment and act as a liaison between borrower and lender.

What to Do When Student Loan Servicing Changes Hands

A change in loan servicers could signify some behind-the-scenes business from your current loan servicer. It could also be a move on behalf of the Department of Education, which is making an effort to aid borrowers with more than one loan servicer by transferring their loans so they only have one servicer to deal with.

A student loan servicer change can also occur if you are participating in the Public Service Loan Forgiveness Program. All loans through that program are managed by FedLoan Servicing.

If you are unsure of who your loan servicer is, you can retrieve your federal loan information through the National Student Loan Data System. For private student loans, borrowers can check their credit reports at AnnualCreditReport.com to find out.

Step 1: Stay up-to-date by reading your notifications.

I'm the first to admit that for a long while, I collected student loan letters and emails and never read them. I've always made on-time payments and learned quickly that most of the notifications were simply payment reminders. However, your loan servicer will notify you months in advance about a loan servicer switch, so it's important you actually read your notifications.

Be sure your contact information is up-to-date — you may have an old email or your parent's address on your account. Make sure everything is up-to-date so you can stay in communication with your current loan servicer and be notified of any changes.

Step 2: Create an account with the new loan servicer.

If your loan servicer is changing, you will receive a welcome letter from your new loan servicer that includes contact information and supporting materials. Your loans will be switched over to your new loan servicer automatically, but you'll need to create a new account with your new loan servicer in order to manage payments and stay in touch online.

Go on to your new loan servicer's website and create an account. Typically, this involves creating a username and password, as well as entering your personal information to match you to your loans.

Once you create an account, save your password, as well as documentation about the loan transfer and the welcome letter, somewhere safe. You'll want to have those for reference later on, if need be.

Step 3: Update your payment information.

While your loans are transferred automatically to your new student loan servicer, it doesn't mean your payment information will be. You may need to re-input your bank information and set up your payment preferences.

You don't want to miss a payment because autopay wasn't set up with your new loan servicer or because you didn't have updated payment information.

Step 4: Get to know your loan servicer.

You can't choose your student loan servicer, so you might as well get to know the one you have. Some loan servicers like Nelnet have financial education resources and also allow for text message reminders. Learn the ins and outs of your new loan servicer so you can take advantage of what they offer.

While it may seem like your loan servicer is just a means to an end, they can be a great resource should you need to defer your loans or change your repayment plan.

What To Do If the Process Is Messy

The process of changing loan servicing companies can be relatively painless. You get a notification, create an account, update your payment settings, and voila — done.

Unfortunately, not all borrowers have the best experiences with loan servicer transfers. According to the Consumer Financial Protection Bureau:

"More than 10 million borrowers have had their servicer change in the past five years…When servicers change, payments may be lost, consumers may incur surprise late fees, and processing problems and missing account records can knock borrowers off track on repaying their loans."

If you're having issues with your new loan servicer and you've tried to resolve your issues with them directly, you may want to consider submitting a complaint with the Consumer Financial Protection Bureau.

The most important thing to do if you're dealing with loan servicer changes is to stay on top of repayment and maintain your records.

Photo credit: joethegoatfarmer.com

Interested in refinancing your student loans?

Here are the top 6 lenders of 2015!

Lender

Rates (APR)

Eligible Degrees

  

1.90% - 7.25%

Undergrad & Graduate

 Learn More

1.90% - 7.24%

Undergrad & Graduate

 Learn More

2.35% - 8.89%1

Undergrad & Graduate

 Learn More

1.90% - 6.93%

Undergrad & Graduate

 Learn More

1.90% - 6.25%

Undergrad & Graduate

 Learn More

1.90% - 6.25%

Undergrad & Graduate

 Learn More
Check out the testimonials and our in-depth reviews!

Check out our in-depth reviews!

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Monday 28 December 2015

Student loan | Firms to Pay More than $50M for 'Deceptive' Student Loan Practices ...

Student loan | Firms to Pay More than $50M for &#39;Deceptive&#39; <b>Student Loan</b> Practices <b>...</b>

Firms to Pay More than $50M for &#39;Deceptive&#39; <b>Student Loan</b> Practices <b>...</b>

Posted: 23 Dec 2015 12:03 PM PST

WASHINGTON -- U.S. banking regulators on Wednesday ordered two affiliated financial firms to pay more than $50 million in fines and restitution to borrowers over allegedly "deceptive" marketing practices in the disbursement of student loans.

The Federal Reserve ordered Higher One Holdings Inc. of New Haven, Connecticut, to pay about $24 million in restitution to approximately 570,000 students as well as a civil penalty of $2,231,250, the Fed said in a statement.

The Federal Deposit Insurance Corp., in a parallel case against the institution, also ordered Higher One to pay $2.23 million.

The FDIC also brought a related action on Wednesday against WEX Bank, which partners with Higher One, and ordered it to pay $1.75 million in fines.

The FDIC added that both Higher One and WEX Bank will also collectively pay $31 million in restitution as well to an estimated 900,000 consumers.

Higher One provides colleges with financial aid disbursement services for students so they can pay for things such as books and living expenses. The FDIC said the product at issue is a debit card that is offered in partnership with banks.

College-Branded Bank Accounts May Not Be Best for Students

Regulators said Higher One engaged in a variety of deceptive practices, including omitting information about how students could get their financial aid disbursements without signing up for a Higher One product called OneAccount and not telling students about the product's fees, the Fed said.

In a statement on Wednesday, Higher One CEO Marc Sheinbaum said the company has made changes to its products and services to address the issues raised by regulators.

"After joining Higher One in 2014, I charged our team to set new standards for transparency and compliance. Today, the account experience is significantly changed and an even better student experience will be unveiled in 2016," he said.

Last week Higher One announced it had reached an agreement to sell its disbursement business, including OneAccount, to Customers Bank for $37 million in cash.

Finally! <b>Student Loan</b> Relief Is Here – Financial Juneteenth

Posted: 23 Dec 2015 04:34 PM PST

Finally! Student Loan Relief Is Here

By Robert Stitt

As of December 17, 2015, everyone who has a Direct student loan can enter into a new repayment agreement, REPAYE, that has limits set at 10 percent of discretionary income. It does not matter when you took out your student loans or how much you borrowed. The plan will not be perfect for everybody, but for borrowers who are having a hard time making their payments, or simply have not been able to, this may be a true gift.

As with any government program, things are not always as clear as they should be. Black Enterprise provides a basic primer on the new repayment system that is summarized below.

  • All Direct student loans that are not in default are eligible for the REPAYE program. FFEL, Perkins, and other federal loans must first be consolidated into a Direct loan before they would be eligible.
  • Discretionary income is calculated by taking your pre-tax income and subtracting 150 percent of the poverty level for your family size. You may find that your repayment amount is $0 if your income is low enough.
  • The U.S. Department of Education has a repayment calculator available online which can help you estimate your monthly payment in the REPAYE system as well as other plans.
  • Payments will be made for 20 years for undergrad loans and 25 for loans applied to grad school. After this time, the remaining balance will be forgiven, but the forgiven amount will be taxed as earned income.
  • Certain government and nonprofit jobs may be eligible for forgiveness after just 10 years of payments.
  • To qualify, apply at StudentLoans.gov and go to the "Income-Driven Repayment Plan Request". There is no fee to apply and no penalty if you choose not to select this repayment option. Federal loan repayment plans can be changed at any time.

The Institute for College Access & Success put together a pdf that explains the five main repayment plans for students with financial hardship. The chart breaks down eligibility, payments, and loan forgiveness. It can be found at http://ticas.org/sites/default/files/pub_files/existing_idr_options.pdf

The REPAYE plan is a start to a better system. There are still a number of improvements that need to be made, however. For example, all federal loans should be repaid under an income-driven system, and the forgiven amount should not be counted as taxable income. For now, this is great news for a lot of Direct student loan borrowers who have been struggling to make their payments.

Source

Is Offering <b>Student Loan</b> Repayment The New 401(k)? - Fast Company

Posted: 17 Dec 2015 02:02 AM PST

Tom Blair is a software engineer. He's in the enviable position of being a skilled worker who is highly sought after by employers. Careerbuilder recently revealed that software developers are among the more than 100 occupations in the U.S. that have more openings than hiring month-to-month, building on a trend this year that has twice as many employers looking to fill jobs than there are candidates who apply.

In order to become such a coveted talent, Blair took the conventional route and earned a four-year degree in computer and information sciences from Syracuse University. And it cost him. Since graduating in 2005, Blair tells Fast Company, he still owes "roughly $15,000" in student loans.

Now he's getting help. His employer, CommonBond, a New York-based financial tech company, just announced it will be offering assistance with student loan repayment.

CommonBond's cofounder and CEO David Klein tells Fast Company that with about half of the staff currently paying back loans, the decision to help reduce their payments was met with excitement. "In fact, 100% of them with student debt have already enrolled in the benefit," Klein says.

"Offering this benefit relates to a broader theme taking shape in the workplace, which is the growing emphasis companies are placing on financial wellness," Klein explains.

Indeed, CommonBond is joining a small (about 3% of private sector businesses, according to the Society for Human Resource Management) but growing number of companies that are starting to implement this benefit. Klein chalks it up to employers staying ahead of a shift in preferences among millennials, who now make up one-third of the U.S. workforce and are carrying a load of debt.

The average amount carried by each borrower is in excess of $35,000.

According to a report on millennials issued by the White House, total student outstanding loan debt surpassed $1 trillion by the end of the second quarter of 2014, making it the second largest category of household debt, and the average amount carried by each borrower is in excess of $35,000.

No wonder a survey of 1,000 workers with student loans from student loan management company iontuition found that nearly 80% with debt said they wanted to work for a company that offered repayment assistance. Among the individuals surveyed, nearly half (49%) said they would prefer their employer contribute to reducing their debt rather than a 401(k) plan. Klein cites another benefits preference study that found among 400 college-educated millennial participants, 85% would accept a job offer when student loan repayment is included. "Many overwhelmingly prefer debt repayment to other perks, such as 401(k) and health insurance contributions, free food, and gym memberships," he points out. 

It makes good fiscal sense, too. Investment expert Dave Ramsey overturns conventional wisdom that dictates saving for retirement even before building an emergency cash cushion. Ramsey recommends paying off all debt first before trying to stockpile savings in a 401(k). "Back in 2008, when the unemployment rate began to spike, 46% of workers who lost their jobs cashed out their 401(k) accounts altogether," Ramsey writes.

Though not exactly mirroring the recent spate of paid parental leave announcements or diversity initiatives as a means to attract and retain skilled talent, student loan assistance is being thoughtfully rolled out by several companies.

CommonBond's Klein notes that its benefit is $100 per month provided to all employees with student debt, until the loan is fully paid off, so long as they are employed at the company. "Typically, companies that offer this benefit will cap it, either by time or lifetime amount or role," he says, "At CommonBond, there are no such caps."

Pricewaterhouse Coopers (PwC), the global consulting and accounting firm, announced that starting in July 2016, some employees will become eligible for a student loan benefit. About 45% of staff between entry level to six years of tenure could receive $1,200 per year for up to six years, according to Michael Fenlon, PwC's global talent leader. "We targeted the program toward recent college graduates, because they've told us they are feeling the weight of student debt."

Fenlon cites the mounting debt as the company's motivator to offer the benefit. "With $1.3 trillion worth of outstanding student loan debt in the U.S., PwC wanted to be a pioneer in this area, and other companies are already beginning to follow us," he says.

Actually, Caroline Gennaro, corporate communications manager at Chegg, points out that leadership at the connected learning platform launched its debt reduction plan this past April. "In recognition of the burden that outstanding student loan debt puts on Chegg employees, Chegg offers a benefit that helps employees pay down their student loans in two ways," she says.

A $1,000 (less taxes) annual contribution will be made for employees paying down student loans, as well as offering an online student loan management tool that will help employees optimize their payments, Gennaro says.

Chegg's benefit can be used toward any outstanding loan, both private and federal, and all regular full-time employees with any sort of loan are eligible for this benefit. "The contribution is considered taxable income and will be included on the employee's end-of-year W2," she explains. So far, 57 of Chegg's employees have signed up. "One of them actually paid off their loan with our payment," she says.

The Lure Of The Benjamin

When you are trying to get out from under a mountain of debt and pay living expenses, an employer's $1,000 or $1,200 a year might seem like a drop in the bucket.

PwC's Fenlon argues, "Given the time-value of money, that could reduce a person's principal and interest by as much as $10,000 and take two to three years off the life of the loan. Our employees have told us that was significant."

CommonBond's Klein admits that $100 per month might sound small. "But over 10 years—a typical term for a student loan—that's $12,000," he observes. "Additionally, based on our research across the industry, this is the richest student loan benefit that exists, in terms of benefit to the employee," he contends.

Is it really fair to call this a recruiting tool? For Tom Blair, CommonBond's software engineer, it wasn't a factor when he joined the company this August because it hadn't been made available yet. When he learned of it in a company-wide meeting, he was thrilled to know that $100 of his monthly $180 payment would be covered. "If it was available when I was weighing up job offers, it absolutely would have factored into my decision," Blair maintains.

All three company spokespeople insist that offering such help is important for attraction, retention, and engagement. "We're always looking for ways to attract good talent, and this benefit is becoming more and more important to prospective employees," says Chegg's Gennaro. What's more, she notes, "The benefit is also in line with who we are as a company. After all, we are an education company looking to make higher education more affordable."

<b>Student Loan</b> Subsidies Cause Almost All of the Increase in Tuition <b>...</b>

Posted: 21 Dec 2015 09:00 AM PST

In a new NBER paper, "Accounting for the Rise in College Tuition," Grey Gordon and Aaron Hedlund create a sophisticated model of the college market and find that a large fraction of the increase in tuition can be explained by increases in subsidies.

With all factors present, net tuition increases from $6,100 to $12,559. As column 4 demonstrates, the demand shocks — which consist mostly of changes in financial aid — account for the lion's share of the higher tuition.

Specifically, with demand shocks alone, equilibrium tuition rises by 102%, almost fully matching the 106% from the benchmark. By contrast, with all factors present except the demand shocks (column 7), net tuition only rises by 16%.

These results accord strongly with the Bennett hypothesis, which asserts that colleges respond to expansions of financial aid by increasing tuition.

Remarkably, so much of the subsidy is translated into higher tuition that enrollment doesn't increase! What does happen is that students take on more debt, which many of them can't pay.

In fact, the tuition response completely crowds out any additional enrollment that the financial aid expansion would otherwise induce, resulting instead in an enrollment decline from 33% to 27% in the new equilibrium with only demand shocks. Furthermore, the students who do enroll take out $6,876 in loans compared to $4,663 in the initial steady state….Lastly, the model predicts that demand shocks in isolation generate a surge in the default rate from 17% to 32%. Essentially, demand shocks lead to higher college costs and more debt, and in the absence of higher labor market returns, more loan default inevitably occurs.

Sound familiar? Some of these results appear too large to me and the authors caution that they need to assume a lot of monopoly power to solve their model so the results should be taken as an upper bound. Nevertheless, the Econ 101 insight that subsidies increase prices (even net for those who are not fully subsidized) holds true.

I wonder where else (& here) we could apply this insight?

Your Federal <b>Student Loans</b> Just Got Easier to REPAYE | ED.gov Blog

Posted: 17 Dec 2015 05:55 AM PST

girl at computer

Beginning today, Federal Direct Loan borrowers can take advantage of a new repayment plan: REPAYE (the Revised Pay As You Earn Plan).

Some of you may be familiar with the Pay As You Earn (PAYE) Repayment Plan, which caps payments at 10% of a borrower's monthly income and forgives any remaining balance on your student loans after 20 years of qualifying repayment. But this plan is only for recent borrowers.

REPAYE solves this problem. Like the name implies, REPAYE has some similarities to PAYE. First and foremost, REPAYE, like PAYE, sets payments at no more than 10% of income. However, REPAYE—unlike PAYE— is available to Direct Loan borrowers regardless of when they took out their loans.

Should I switch to REPAYE?

If you can't afford your monthly payment under your current repayment plan, you should consider REPAYE or one of the other income-driven repayment plans. These plans can offer needed relief by ensuring that you will never pay more than a certain percentage of your income. If you can afford to pay more on your loan, you should, since this will save you more on interest costs over the life of your loan.

If you're pursuing Public Service Loan Forgiveness, you should consider REPAYE. REPAYE is an eligible repayment plan for the Public Service Loan Forgiveness (PSLF) Program. If you're working toward PSLF and considering consolidating your loans in order to qualify for REPAYE, you should read this first.

If you're currently on Income-Based Repayment (IBR) because you weren't eligible for PAYE, you should consider whether REPAYE might be a better option for you. REPAYE could lower your payments by one-third, from 15% to 10% of income.

Before making your decision, use our repayment estimator to compare what your monthly payment would be under REPAYE and all of our other plans.

Under any income-driven repayment plan, you'll need to "recertify" your income and family size each year.

How is REPAYE different from the other income-driven repayment plans?

So, you already know that your payment under an income-driven plan is a percentage of your income. But REPAYE is different from the other plans. Here are a few differences:

There's no income requirement to enter the plan: Unlike with the PAYE and IBR plans, borrowers don't have to show that that their income is low compared to their federal student loan debt in order to enter REPAYE. In simple terms, that means that the amount of your debt and your income level won't keep you from qualifying.

Borrowers with only undergraduate loans will have a different repayment period than those with graduate loans: Income-driven repayment plans forgive any remaining loan balance after a specific number of years of qualifying repayment—either 20 or 25 years, depending on the plan. REPAYE is a little different than the other income-driven repayment plans. With REPAYE, if you're only repaying loans you received as an undergraduate student, you'll repay your loans for up to 20 years. However, if you're repaying even one loan that you received as a graduate or professional student, you'll repay your loans (including any loans you received as an undergraduate) for up to 25 years. Of course, this difference doesn't matter if you later qualify for Public Service Loan Forgiveness, since your loans would be forgiven after 10 years of qualifying payments.

Married borrowers' payments are calculated differently: The other income-driven repayment plans use the combined income of you and your spouse to set your payment amount only if you file a joint federal income tax return. If you and your spouse file separate tax returns, your payment amount is based on only your income. REPAYE (with limited exceptions) uses the combined income of you and your spouse to set your monthly payment amount, regardless of whether you file a joint tax return or separate returns. This could increase your monthly payment amount. For more information, read our Q&A.

REPAYE payments are not capped at the 10-year standard payment amount: Generally, your payment amount under an income-driven repayment plan is a percentage of your discretionary income. However, this isn't always the case with the PAYE and IBR plans. Under PAYE and IBR, your payment will never be higher than what it would have been under the 10-year Standard Repayment Plan, no matter how much your income increases. With REPAYE, there's no cap on your monthly payment amount. Your payment will always be 10% of your discretionary income, no matter how high your income grows. This means that if your income increases significantly, your REPAYE payment could be higher than what you would have to pay under the 10-year Standard Repayment Plan.

REPAYE provides a more generous interest benefit: If your payment doesn't cover all of your interest, REPAYE pays more of the remaining interest than PAYE or IBR. This can help prevent your loan balance from ballooning and limit the total cost of your loans.

What else should I consider before applying?

Determine whether you have Direct Loans before attempting to switch to REPAYE. If you're not sure which type of loans you have, you can log in to StudentAid.gov to find out. Loans labeled "Direct" qualify for REPAYE, loans without the "Direct" label don't qualify for REPAYE unless you consolidate them. You can apply for a Direct Consolidation Loan on StudentLoans.gov.

Special considerations for borrowers who are currently on IBR:

  • If you don't have Direct Loans, but you've been repaying your other loans under IBR for a while and you're thinking of consolidating to take advantage of REPAYE, it's important to understand that you'll lose any credit toward IBR loan forgiveness that you received before consolidating—you'll have to start over with a new 20- or 25-year repayment period on the Direct Consolidation Loan. So, carefully consider whether having a lower monthly payment amount matters more than the additional time you may spend repaying your loans.
  • Any outstanding interest will be capitalized (added to your loan principal balance) when you leave IBR.

How do I apply for REPAYE?

You can apply for REPAYE—or any other income-driven repayment plan—on StudentLoans.gov. We've made some improvements to the way the electronic application works, so give it a spin.

Looking for the lowest monthly payment? With four income-driven repayment plans, it's easy to overlook a plan or confuse a feature of one plan with another. Let us do the hard part for you. If you're looking for the lowest monthly payment, there's a box you can check on the application to request that your loan servicer evaluate you for all income-driven repayment plans, and put you on the plan with the lowest initial payment.

Where can I get more information?

There's more to know about REPAYE than what you see in this blog post.

Have a question that our resources can't answer? Contact your servicer. They're the best option for individualized advice.
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Monday 14 December 2015

Student loan | Student loans: Osborne's overhaul 'betrays a generation' | Education ...

Student loan | <b>Student loans</b>: Osborne&#39;s overhaul &#39;betrays a generation&#39; | Education <b>...</b>

<b>Student loans</b>: Osborne&#39;s overhaul &#39;betrays a generation&#39; | Education <b>...</b>

Posted: 25 Nov 2015 11:17 PM PST

Students rage against tuition fee cuts during a protest outside Downing Street, London, this month. Photograph: Dario Earl/Demotix/Corbis

George Osborne's decision to impose a near £3,000 increase in student loan repayments is likely to deter young people from going to university and hit disadvantaged students hardest, critics have said.

Related: Student loans: Osborne criticised for 'back door' repayments change

Martin Lewis, the personal finance expert who led a taskforce to help explain the new tuition loan scheme, attacked the decision to backdate the change to 2012, announced by the chancellor as part of his spending review.

"This is a disgraceful move and a breach of trust by the government that betrays a generation of students," said Lewis.

In details released as part of Osborne's autumn statement on Wednesday, the government confirmed the earnings threshold at which student loan repayments began would be frozen for five years instead of raised in line with average earnings, as promised in 2010.

The Treasury said the freeze would be backdated to include the terms of loans to students who started courses from 2012 and, in some cases, graduated this year.

The Institute for Fiscal Studies (IFS) estimates the retrospective freezing of the threshold at earnings of £21,000 would mean an average graduate would pay back about £3,000 extra, while disadvantaged students who had previously been eligible for support grants would be even worse off. Those earning close to median incomes for graduates would pay back an extra £6,000, the IFS said.

"It is risking fundamentally threatening any trust people have in the student finance system. It is one thing to set up a system that is unpopular but it is entirely different to make retrospective changes that mean you cannot even rely on what you were promised at the time you started to study," Lewis said.

Related: Campaigners fussing over student loan repayments have the wrong target

"The fact that the chancellor didn't even have the balls to put it in his autumn statement speech shows that he knew how unpopular it would be. If a commercial company made retrospective changes to their loan terms in this way they'd be slapped hard by the regulator."

Gordon Marsden, Labour's spokesman for higher education, said he supported Lewis's concerns and suggested the change in the terms of the loans could be open to legal challenge. "It will be a disincentive to future loan applicants, in further education as well as higher education, and it amounts to mis-selling to all the post-2012 students who signed up," he said.

Sir Peter Lampl, the campaigner for improved access to higher education who founded the Sutton Trust, also criticised the move in unusually strong terms, saying he deplored it as "something that damages trust in the loans system".

The Sutton Trust argued that "uncertainty created by the proposed changes [in effect] forces students to write an 'open cheque'. This may discourage participation or distort decisions as to where, what and how to study".

Martin Lewis

Martin Lewis, who says the chancellor's move 'threatens any trust people have in the student finance system'. Photograph: Martin Godwin for the Guardian

The Department for Business, Innovation and Skills said the freezing of the repayment threshold and other changes would mean a 30% reduction in the portion of unpaid loans, known as the resource accounting and budgeting charge, by 2020, and increase repayments by £3bn.

The spending review announcements also widened the range of students eligible for loans, including widening access to loans for postgraduates up to the age of 60 and more aid for part-time students, including access to maintenance loans and loans for those wishing to study for a second degree.

But student opportunity funds available for disadvantaged and disabled learners would also be reduced, according to the autumn statement.

Peter Horrocks, vice chancellor of the Open University, welcomed the support for part-time and returning students, after the enduring slump in the numbers taking up part-time study since 2011.

"More concerning, however, is the spectre of substantial cuts to the student opportunity fund, which is key to supporting students from disadvantaged backgrounds," he said.

Related: Save part-time students, the Open University's new leader urges MPs

The National Union of Students calculated that students previously eligible for maintenance grants who took out their full loan entitlement on a three-year course would graduate with debts worth more than £50,000.

Sally Hunt, general secretary of the University and College Union, said Osborne's "main funding solution appears to be extending loans and loading more debt onto students. This approach will lead to the poorest paying most for their education."

But overall there was a feeling of relief that the higher education sector had not suffered as badly from funding cuts as some had predicted. "The spending review could have been worse for universities and students that it has turned out to be," said Nick Hillman, director of the Higher Education Policy Institute.

"However, the years ahead will still be difficult, particularly as maintenance grants are due to be replaced by even bigger student loans for the poorest students. It is also likely that the big cuts to [the business department] will end up hitting higher education institutions in one way or another," said Hillman, a former government special advisor on higher education.
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Sunday 13 December 2015

Student loan | Student loans: Osborne criticised for 'back door' repayments change ...

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

<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."

Some complaints filed in NH against <b>student loan</b> company | Special <b>...</b>

Posted: 10 Dec 2015 08:03 PM PST

When students graduate college, they often face years of debt, and adding to the stress for some, the country's biggest student loan company has come under fire for how it's charging customers.

Click to watch News 9's coverage

Over the past two years, four complaints have been filed with the New Hampshire Attorney General's Office by customers of Navient, the nation's largest student loan company and a spinoff of Sallie Mae.

"We're not people's advocates, but we enforce the Consumer Protection Act, which prohibits unfair and deceptive practices, and some of those complaints lead to us taking some enforcement action against businesses that are doing things that they shouldn't be doing," Senior Assistant Attorney General James Boffetti said.

One complaint said: "Over the years, the company changed the terms of agreement. For example, the interest rate and fees increased."

Navient said in its response that the terms and conditions of the loan had not changed and that the interest rates on private loans are variable.

Nationally, Navient is facing government investigations from other attorneys general and the Consumer Financial Protection Bureau. But Boffetti said no action was necessary with the four New Hampshire complaints.

"In some cases, the business will just resolve the complaint directly with the consumer, and then we don't get involved any further," Boffetti said.

Student debt is increasing locally and nationally. According to a study by the Institute for College Access and Success, New Hampshire ranked second in the country in 2014 for highest average debt per graduate, with more than $33,000 in debt per student.

The study said 76 percent of the state's graduates had debt.

"What I usually say to students is if the outcome is an education, there is an opportunity out there for everybody," said Angela Castonguay of the New Hampshire Higher Education Assistance Foundation.

The New Hampshire Higher Education Assistance Foundation provides free guidance to help people financially plan for college.

"I think the biggest problem is there's usually a disconnect between the student's goals and expectations of their parents' finances and the parents' expectations of their finances or understanding of their situation," Castonguay said.

Castonguay said preparation is key to limiting student debt. She does loan calculations with students to figure out what they'll pay.

"Am I going to be able to pay that back on a teacher's salary, a police officer's salary?" Castonguay said. "What am I going to be able to afford? You can make those smart decisions and not wind up in a debt that binds you for life."

Castonguay advises prospective students to apply to a variety of schools so they'll have multiple options for financial aid packages.

In the meantime, if people have concerns about overcharging or other issues with loans, Boffetti said it doesn't hurt to contact his office.

"You'll be surprised how many of those complaints get resolved just by us sending a letter and the business responding and resolving it with consumers, so it's worth doing it," he said.

Boffetti said the Attorney General's Office gets about 3,500 written complaints per year and 7,000 to 8,000 calls to its consumer hotline.

Anyone who wants to file a complaint can call the hotline from 9 a.m. to 3 p.m. weekdays at 888-468-4454 or 603-271-3641. The bureau can also be reached by email at DOJ-CPB@doj.nh.gov or by sending a letter to:

Consumer Protection and Antitrust Bureau
Office of the Attorney General
33 Capitol St.
Concord, NH 03301

In a statement to News 9, a Navient spokesperson said the company is committed to helping its customers succeed and that borrowers serviced by Navient are 38 percent less likely to default.

How one grad cut her <b>student loan</b> debt by $20,000 | FOX2now.com

Posted: 24 Nov 2015 12:10 PM PST

student loans - Copy

NEW YORK – Looking for an easy way to reduce your student loan debt?

Lexie Mitchell, a 2011 Stanford grad, found one. By refinancing her student loans, she cut her monthly payments by $80 and will save a whopping $20,000 in total.

"Stanford was amazing. I loved it, but it's also very expensive," Mitchell said.

She went to school on a scholarship for track and field, but didn't compete all four years. She lost the scholarship and had to pick up the tab to finish school.

Refinancing student loans hasn't always been an option. As recently as a few years ago, it was difficult for grads to find a bank that would offer them a better rate.

But the tide has turned. About half of those with outstanding student debt could save money by refinancing, according to Citizens Bank, one of the biggest lenders in the space.

Mitchell did her research and found that an online lender called SoFi offered her the best deal. She lowered her interest rate to 6.4% from 10% on a 20-year loan.

Most lenders don't charge an origination or closing fee, so there's a little risk.

"If you're confident you can afford the monthly payments, it is very hard to find a downside," said Douglas Boneparth, a CFP that specializes in advising Millennials.

It may sound too good to be true, but here's why it works. The new rate is based on your credit score and your income. So if you've found a good-paying job, it makes sense that you can get a lower rate than when you were in college, said Brendan Coughlin, the president of consumer lending at Citizens.

Mitchell waited until she got a bump in pay to refinance, which scored her an even lower rate than she might have otherwise gotten.

"Refinancing isn't for everyone. But higher-income individuals can really take advantage for some pretty low interest rates," said Andy Tate, a CFP who's helped many doctors and lawyers refinance.

The average person refinancing at Citizens is 33 years old, earns $75,000, and has about $45,000 in loan debt. If you don't fit that mold, it doesn't mean you're out of luck. You can find out if you're eligible with most lenders by inputting some information online, for free. It took Mitchell about an hour to get a quote from SoFi.

It's worth looking into now. Rates are low, but could eventually creep higher after the Federal Reserve decides to implement a hike.

"We're at a period of time when customers are likely to get the best deal they'll see in a while," Coughlin said.

If figuring it out sounds like a terrible way to spend a Saturday afternoon, here are some tips to make the process less painful.

Shop around.

Check out Citizens, SoFi, Earnest, Darien Rowayton Bank, LendKey, and CommonBond. Those are the biggest players in the space and each may make you a different offer. Some require you to have completed your degree while others don't. Some require that you open a savings account in order to refinance.

The lowest rate may not be your best option.

Some offer different terms. A 5-year loan may come with a lower rate than a 15-year loan. But both could save you money over the long-run.

You can refinance both federal and private loans.

While private loans typically come with a higher interest rate to begin with, don't rule out your federal loans. If you borrowed from the government before 2008 for undergrad, or at all for graduate school, it's likely you're paying an interest rate at or above 6%. Federal Parent PLUS loans, which come with an even higher interest rate, are also eligible for refinancing.

Is there a catch?

If you refinance a federal loan, you'll be giving up some protections, like applying for forbearance, deferment, or income-based repayment. If your finances takes a hit in the future, you might not be offered these benefits.

Refinancing is different than consolidating.

Consolidating is a great when you have a ton of different loans and want to make just one payment. The new interest rate will be the average of your prior loan rates. But refinancing puts your loans together in one spot and saves you some money by reducing your rate.

Now that Mitchell refinanced, she and her husband are more comfortable making big financial decisions, like their upcoming move to New York City.

"For us, it's really nice to have that extra $80 a month in our back pocket. You never know when things will get tight," she said.

By Katie Lobosco

Trademark and Copyright 2015 Cable News Network, Inc., a Time Warner Company. All rights reserved.

<b>Student Loan</b> Forgiveness for Teachers | Refinance and <b>...</b>

Posted: 04 Dec 2014 10:30 PM PST

Teaching is one of the most important professions but it's at risk of losing top talent due to low pay, among other reasons. The annual turnover rate for teachers is 15.7%, 3.8% higher than the average of other professions.

For 2012-13, the national average starting teacher salary was $36,141. Education majors have lower salary potential when compared to other majors, according to PayScale.com. Meanwhile, the average student loan debt for the 2014 graduate (regardless of major or profession) was about $33,000. It's clear that these numbers aren't in favor of teachers ability to repay their student loans.

Fortunately, teacher student loan forgiveness from the federal and some state governments provide some relief. We know it's not simple to sift through all the details of student loan forgiveness to figure out what you're qualified for. So we're breaking down the teacher student loan forgiveness options available that will help teachers dig themselves out of debt.

Federal Teacher Cancellation for Perkins Loans

How much it's worth: Up to $27,500

Requirements: You must teach at least one year at a low-income school or teach in certain subject areas.

How long it takes: Minimum one full year of teaching. 100% Perkins Loan debt cancellation after five years.

The details: After just one year of teaching, you can have 15% of your outstanding Perkins Loans canceled. This continues in varying amounts until you can have all Perkins Loan debt canceled after five years.

The Teacher Loan Cancellation Program is pretty specific about what position you need to hold. You must meet one of the below requirements:

1. Teach at a low-income school. (Click here for a list)
2. Teach special education.
3. Teach in mathematics, science, foreign languages, or bilingual education.
4. Teach in a field that has a shortage of qualified teachers in your state.

To apply, contact the school that holds your Perkins Loans and to learn more about requirements, see the Federal Student Aid website.

Teacher Loan Forgiveness

How much it's worth: Up to $17,500 towards Direct or Stafford Loans.

Requirements: You must teach at a low-income school. You can't have student loans originating before Oct. 1, 1998, and you can't be in default on your loans.

How long it takes: Five complete and consecutive academic years

The details: This one's a little more complicated. The amount you can receive is based on your role. There are two tiers for Teacher Loan Forgiveness.

You can receive up to $5,000 if you're a full-time elementary teacher or full-time secondary school teacher teaching in an area related to your academic major.

You can receive up to $17,500 if you're a highly-qualfied full-time math or science teacher in a eligible secondary school. You can also receive this award if you're a highly-qualified special education teacher if you meet certain requirements.

To be considered "highly-qualfied," you must have obtained a full state certification as a teacher or passed the state teacher licensing exam. You must also hold a state license (with a few exceptions).

Certain exceptions are made if you're an elementary teacher who holds a bachelor's degree and can meet other requirements. Visit the Federal Student Aid website for more information.

Public Service Loan Forgiveness

How much it's worth: 100% of your Direct Loan balance after 10 years. This amount varies depending on many factors.

Requirements:

1. Must be in certain public sector jobs and employed full-time
2. Make 120 payments starting from October 1, 2007
3. Payments must be made as part of certain repayment plans
4. Not in default

How long it takes: 120 qualified payments, which takes 10 years.

The details: This program isn't just for teachers, although teachers can qualify. With this option relief is more long-term than the other programs we discuss above.

This plan typically works best with other types of qualifying repayment plans. For example, you may be able to take advantage with payment plans like Income-Based Repayment (IBR). IBR will lower monthly payments and increase the amount of debt forgiven at the end of 10 years (if any). However, if you miss any of the requirements, you'll end up paying more in interest on your loans. To learn more about requirements, visit the Federal Student Aid website.

State and City Loan Forgiveness Programs

These plans vary based on where you live and teach. It's worth investigating if your state or city offers teacher student loan forgiveness.

Some state programs include:

Maine

How much it's worth: One to two year's worth of student loan payments for each year as a teacher.

Click here to learn more about Educators For Maine (EFM) Loan Program.

Iowa

How much it's worth: Up to $6,658 or 20% of the recipient's total eligible federal student loan balance

Click here to learn more about Iowa's Teacher Loan Forgiveness Program.

North Dakota

How much it's worth: $1,000 per year for up to three years.

Click here to learn more about North Dakota's Teacher Shortage Loan Forgiveness Program.

Mississippi

How much it's worth: $3,000 per year for up to four years.

Click here to learn more about the Mississippi Teacher Loan Repayment Program.

State programs come and go more often than federal programs, so don't delay if you're eligible to apply

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How To Tackle <b>Student Loan</b> Debt | Above the Law

Posted: 09 Dec 2015 10:04 AM PST

debt student loans educational debtIf the first big hurdles coming out of law school are passing the bar exam and landing a job, the next one is how to tackle student loan debt that, for many graduates, can run well into the six-figure range.

Adding to the challenge is that while student debt loads for law school graduates have been climbing sharply, salaries not only have failed to keep up, they've been heading in the opposite direction.

Back in 2004, you could expect to graduate from law school with $88,634 in student debt, on average. According to the New America Foundation, that figure had climbed to $140,616 for the class of 2012.

After peaking at $130,000 in 2009, median starting salaries for graduates who landed at law firms slid precipitously during the recession, bottoming out at $85,000 for the class of 2011. Although median starting law firm salaries for the class of 2013 rebounded to $95,000, they stayed there last year, according to the latest numbers from the National Association for Law Placement Inc. (NALP).

According to NALP, the median starting salary for all jobs taken by law school graduates — including academic, business, government, private practice, and judicial clerkships — fell from $72,000 in 2009 to $63,000 for the class of 2014.

There are a number of approaches to tackling bigger student loan payments on a smaller salary, including income-driven repayment plans, loan forgiveness, or refinancing student loan debt to take advantage of lower rates.

Income-driven repayment plans

Federal student loan borrowers are eligible to enroll in a number of income-driven repayment plans, which cap monthly student loan payments at as little as 10 percent of discretionary income.

Stretching out payments over many years reduces the monthly payment, but may increase the total amount of interest paid over the life of the loan.

The latest income-driven repayment plan, Revised Pay As You Earn (REPAYE), also includes loan forgiveness — but for grad school loans, it doesn't kick in until you've been paying your loans down for 25 years.

"While income-driven repayment may not be the best or most affordable choice for all borrowers, it is a critical option for borrowers who are struggling to manage their monthly payments," advises Oakland, California-based The Institute for College Access & Success (TICAS).

Loan forgiveness

Enrolling in an income-driven repayment plan isn't the only way to have student loan debt forgiven.

There are many public service employment opportunities for lawyers, and those pursuing a career in the public sector may be eligible for loan forgiveness through programs offered by the federal government and some law schools.

Federal loan forgiveness programs forgive the remaining balance of federal loans for full-time employee with qualifying public service positions who have made timely repayments for 10 years.

Qualifying positions may include work for the government or a non-profit. There are also a number of federal repayment assistance programs offered on a state level to help bring public service lawyers to underserved populations across the United States.

In addition to federal programs, many law schools offer loan repayment assistance programs, or LRAPs. LRAPs help graduates repay their loans when they take qualifying public interest or low paying service positions in the legal field. Each school has their own eligibility requirements and LRAP terms, but many legal public servants drastically reduce their debt obligation with the help of these programs.

Refinancing

The student loan refinancing market has exploded in recent years, and many private lenders are offering loans at rates that can beat the rates on government student loans. Interest rates are at historic lows and qualifying borrowers may save thousands over the life of their loan by refinancing.

Most law school graduates finance at least part of their education with federal PLUS loans. Unfortunately for grad students, PLUS loans have a significantly higher interest rates than federal student loans for undergraduates. PLUS loans for 2015-2016 carry an interest rate of 6.84 percent, while subsidized undergraduate loans for the same period carry an interest rate of 4.29 percent.

If you're earning a steady income and have good credit, you can lose your high interest PLUS loan by refinancing and securing a lower interest rate. An interest rate just 1.5 percentage points lower will save you thousands of dollars over the life of your loan. Many refinancing lenders offer benefits that can help keep you on top of repayment and provide assistance if you experience financial hardship.

Keep in mind that private loans may lack some borrower protections provided by government loans, such as loan forgiveness for government employees and public-interest lawyers once they've made 10 years of payments.

But it's not unusual for private lenders to provide benefits like a grace period for repayment and protections against loss of income.

If you've decided that refinancing with a private lender could save you money, do shop around to find which lenders offer the best deal. Underwriting decisions are made on a case-by-case basis, and lenders offer products that vary in rates and terms.

One place to compare competitive loan offers from private lenders is Credible.com. Credible is a multi-lender marketplace that lets borrowers fill out one form, receive and compare personalized offers from vetted lenders, and choose the offer that best suits them.

You can get a good estimate of how much refinancing might save you in about 30 seconds at Credible.com.

Earnest, Fueled by Growth in <b>Student Loans</b>, Raises $275 Million - Bits

Posted: 17 Nov 2015 04:30 AM PST

Louis Beryl, center, chief executive of Earnest. Jason Henry for The New York Times

At the start of this year, Earnest was an intriguing but small entrant in an emerging field of start-ups using new tools of data and software to analyze credit risk and make consumer loans. Its loans were typically a few thousand dollars for things like relocation expenses and professional training.

But today, the lender, based in San Francisco, is growing at a torrid pace, and on Tuesday it announced a $275 million round of debt and equity to fund further expansion. Already this year, Earnest has made 50 times as many loans as last year, and it is lending from $2 million to $5 million every day, said Louis Beryl, a co-founder and chief executive.

That trajectory caught the attention of Earnest's new investors. "Rarely do you see a company go from zero to 60 this quickly," said Roger Lee, a general partner at Battery Ventures, which led the equity round of the new financing. Mr. Lee is joining the Earnest board.

In this round, $75 million is equity investment, and $200 million is debt funding. The debt portion is led by New York Life. The new financing brings the total raised by Earnest, founded in 2013, to $325 million.

Earnest now employees 165 people, up from 30 at the start of this year. Mr. Beryl says he plans to hire about 200 more employees over the next year, especially technical people like software engineers, data scientists and user-experience designers. The long-term goal, he said, is to "build a platform for the next generation of consumer financial services."

The financial service that has carried Earnest so far is refinancing student loans, which it began at the end of January. It is by far the largest part of the company's business, and Earnest's success points to the opportunity in services to ease the burden on the nation's debt-laden students and recent graduates. Student loan debt is more than $1.2 trillion, growing by about 10 percent a year. Student loans are held by 40 million Americans.

Earnest is focusing on the more indebted recent graduates. The size of its average refinancing loan is $70,000. The start-up says the average saving, on its refinanced loans, is $18,000, typically over 10 years.

Other online lenders, like SoFi and CommonBond, have also done well in the market for refinancing student loans. But Earnest says its approach is particularly data-intensive, which it says allows it to tailor rates to individual circumstances. It asks its customers for digital links to their bank, credit card and retirement and investment accounts, and information on all their loans. "They are willing to share their data for a better consumer finance experience," Mr. Beryl said.

Earnest says it has read-only access to the information. It pledges not to store personal data or sell it.

Earnest has made individual loans of more than $250,000. Traditional credit scoring, Mr. Beryl said, tends to punish high student debt loads. But such Earnest borrowers, he said, are in fields like brain surgery and dental surgery, where education is lengthy and costly. "These are people with great jobs, great educations and great earning potential," he added. Earnest borrowers average a bit over 30-years-old â€" young people with slender credit histories and thus charged higher rates by traditional banks.

Mr. Beryl said Earnest has had no delinquency problems on its student refinancing loans. And Mr. Beryl, 34, is one of those prompt-paying customers. Having attended Princeton, Harvard Business School and Harvard's Kennedy School of Government, he had $100,000 in student loans at the start of the year. He has paid down some, but still holds student loan debt, he said.
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