Student loan – Sohamsa http://sohamsa.org/ Mon, 11 Oct 2021 18:07:08 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://sohamsa.org/wp-content/uploads/2021/06/icon-3-150x150.png Student loan – Sohamsa http://sohamsa.org/ 32 32 This Lender Will No Longer Serve Federal Student Loans: What It Means For His Business https://sohamsa.org/this-lender-will-no-longer-serve-federal-student-loans-what-it-means-for-his-business/ Mon, 11 Oct 2021 17:01:00 +0000 https://sohamsa.org/this-lender-will-no-longer-serve-federal-student-loans-what-it-means-for-his-business/ Navigate (NASDAQ: NAVI) recently announced that it would stop handling federal student loans, moving its student loan accounts belonging to the US Department of Education to Maxim. Navient’s transfer of its service portfolio follows the decision by the Pennsylvania Higher Education Assistance Agency and Granite State to end their relationship with the government that administers […]]]>

Navigate (NASDAQ: NAVI) recently announced that it would stop handling federal student loans, moving its student loan accounts belonging to the US Department of Education to Maxim. Navient’s transfer of its service portfolio follows the decision by the Pennsylvania Higher Education Assistance Agency and Granite State to end their relationship with the government that administers federal student loans earlier this year.

Last year, the government provided student loan relief to students receiving federal loans in the early stages of the coronavirus pandemic, a measure that was extended until January 2022. Although this had an effect on these loan managers, the main reason companies are leaving the business now is probably due to increasing federal government oversight.

Image source: Getty Images.

Increased Fed Watch Over Student Loans

The Biden administration has made it clear that it is cracking down on companies it sees as taking advantage of consumers. One aspect of this is the increasing scrutiny of lenders and student loan service providers.

In an effort to protect student borrowers, the federal government is looking to add performance and accountability measures – and it has made this a central part of renewing service contracts with private companies. Some believe these additional measures are the reason Navient and others are withdrawing from the business of federal loan management altogether.

Navient manages federal loans for 5.6 million accounts receivable under its service contract with the Department of Education, but those service fees only represent 6% of the company’s total revenue. Not only that, but the management income has been declining for the lender for a few years now. In 2016, it brought in $ 289 million to the federal education loans department, but by 2020 that number has fallen 28% to $ 208 million.

Navient is already under intense government scrutiny, dealing with lawsuits from the Consumer Financial Protection Bureau and various state prosecutors over the past few years. The main accusation is that the lender did not provide borrowers with relief options and instead directed borrowers to more expensive repayment programs. In view of the wider uncertainty surrounding increased regulation of federal student loans, Navient made the decision to abandon the federal loan service altogether while focusing on lending and servicing loans. private.

Where will Navient go from here?

Last year, with student enrollment declining, Navient made an effort to increase its income from other sources. The lender was able to pivot and collect fees on contracts related to the coronavirus pandemic, including granting unemployment benefits, finding contracts and administering vaccines. As a result of these efforts, other income amounted to $ 480 million in the first half of this year, compared to $ 85 million in the first half of 2020.

While Navient has been creative in generating income in the midst of the pandemic, my main concern is what he will do to drive long-term growth. One thing that has helped keep its stock price on the rise is its massive share repurchase programs, which have reduced its outstanding shares by 56% since 2014. However, since the end of 2014, it has seen its total sales decline to 7.1% compound annual. while its net income fell at an annual rate of 2.8%.

Uncertainty about the future of higher education makes it difficult for the company to forecast, with much debate over the student loan debt burden and what the federal government can do in response. While Navient looks like a high value stock with a price / earnings ratio of 3.8 and a strong dividend yield of 3.3%, it’s hard for me to be optimistic about the company unless there is a clear direction on how the business will develop from here. .

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Meet a 57-year-old father with $ 104,000 in student debt for his son https://sohamsa.org/meet-a-57-year-old-father-with-104000-in-student-debt-for-his-son/ Sun, 10 Oct 2021 10:00:16 +0000 https://sohamsa.org/meet-a-57-year-old-father-with-104000-in-student-debt-for-his-son/ Jeff O’Kelley, 57, has a student debt of $ 104,118 from loans he took out for his son’s college. He said he didn’t regret taking them out because he wanted to give his son the best possible future. O’Kelley isn’t sure he himself deserves the forgiveness of his student loan, but he says debt is […]]]>
  • Jeff O’Kelley, 57, has a student debt of $ 104,118 from loans he took out for his son’s college.
  • He said he didn’t regret taking them out because he wanted to give his son the best possible future.
  • O’Kelley isn’t sure he himself deserves the forgiveness of his student loan, but he says debt is a “hindrance to the economy.”

Jeff O’Kelley wants to be clear: he was not defrauded by the student loan system.

Looking back, however, he wishes it had been a little more difficult for him to take out such a large loan to pay for his son’s college, given his income at the time and soaring rates. interest since.

When O’Kelley’s son graduated from high school with honors and an International Baccalaureate in 2019, he had high hopes for college. At the time, the 57-year-old was self-employed as an entertainment photographer with an income of around $ 40,000, his finances were unrelated to those of his second wife and he didn’t want her son misses all the opportunities because of the money.

So he turned to Parent PLUS Loans to pay for his son’s education at George Washington University, and told Insider the process was “extraordinarily simple.”

“I go online, put in some info and hit submit, and 60 seconds later there’s an extra $ 30,000,” O’Kelley said. “I had very little information and very little confirmation and I think that’s the part that attracted me the most. It was too easy, and it shouldn’t have been.”

Now he has $ 104,118.60 in student debt with 360 monthly payments to be made – each payment being around $ 760 – which means he will be 88 when he’s finished paying off his debt, “it” ie if I live that long, ”O’Kelley said.

Jeff O'Kelley

Jeff O’Kelley.

Jeff O’Kelley


Parent PLUS loans, the type O’Kelley repays, are federal loans that allow parents to pay for their children’s education. The company that manages the loan does not take into account the parent’s income when granting the loan, but bases it on the student’s cost of attendance minus any financial assistance the child has already received. PLUS loans are the most expensive type of loan with the highest interest rate – 6.28% – compared to 3.73% for undergraduate loans, which allows parents to get into debt much faster .

O’Kelley said it would have made sense for Nelnet, the company that manages his loans, to turn him down given he had no verifiable income, but it didn’t occur to him at back then because his main goal was giving his son the best possible future.

Nelnet did not immediately respond to Insider’s request for comment.

“It was my obligation to do my best for him,” said O’Kelley. “It gave my son what he really wanted, and I felt like it was my obligation to do it as a parent.”

“It’s a horrible, horrible black hole to fall into”

There’s a Ferrari dealership a mile from O’Kelley’s Florida house, and he said if he walked into the dealership and asked to buy a car, they would never sell it to him on the spot – they would have. needed confirmation that he could afford it.

But with his PLUS loan, he said, he essentially got a Ferrari without verification.

“I got carried away and probably a lot of other people did the same,” O’Kelley said. “It’s a horrible, horrible black hole to fall into.”

O’Kelley isn’t the only parent to have fallen into the PLUS loan “black hole” without realizing how quickly debt would pile up. Insider previously spoke to two borrowers, one with $ 550,000 in debt for her five children and the other with $ 265,000 in debt for her two children, who said they wished the system hadn’t been so easy to contract.

“I wish there were more constraints, or something that could have made me think twice or make a different decision,” said O’Kelley. “I wish things would change because you don’t want to see other people in the same situation.”

The Texas Public Policy Foundation released a report last month showing that for every 100 student loan borrowers, there are 22 parent borrowers, and for every $ 100 in student loans, there are about $ 30 in parent loans.

O’Kelley’s wife earns a living wage, and combined with his, he’s not too worried about making monthly payments once the pandemic break is over in February. But his wife plans to retire in just a few years, and that’s when the monthly payments of $ 760 will become “a problem.”

Yet even with the financial burden it entails, O’Kelley isn’t sure if he deserves a student loan forgiveness, as it was his choice to take out the loans. But he said the huge debt that so many people hold is an “obstacle to the economy” and that increased surveillance would lessen its negative impact.

He said the loan cancellation is a “moral issue” for him because he knows he chose to spend money on his son’s education, “but somewhere in the back of my mind j ‘hope I hope Congress will do something. “

Do you have a story to share on student debt? Contact Ayelet Sheffey at asheffey@insider.com.

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Medical financial aid: what it is and how to get it https://sohamsa.org/medical-financial-aid-what-it-is-and-how-to-get-it/ Fri, 08 Oct 2021 21:33:45 +0000 https://sohamsa.org/medical-financial-aid-what-it-is-and-how-to-get-it/ Looking for college funding, Jason White remembers reading a footnote in some textbook on the federal government’s vocational rehabilitation (VR) program. He said White could receive medical financial assistance if he documented his health issues – in his case, allergies and asthma. At first, the VR program seemed like a long shot. But the program […]]]>

Looking for college funding, Jason White remembers reading a footnote in some textbook on the federal government’s vocational rehabilitation (VR) program. He said White could receive medical financial assistance if he documented his health issues – in his case, allergies and asthma.

At first, the VR program seemed like a long shot. But the program gave White $ 96,000 to spend on not one, but two degrees. To see how he did it – and how you too can get medical financial assistance if you qualify – let’s take a look at these questions:

What is medical financial assistance?

Medical Financial Aid is monetary aid for higher education, given to students and families with health problems that affect their ability to learn or work in their field. Awarded through government funding and private sources, medical financial aid can provide hundreds or thousands of dollars in aid for college, graduate study, and vocational training. Eligibility requirements vary by program, but applicants are often required to document their status.

Three common requirements for medical financial aid
1. Medical evidence: An email or letter from your doctor detailing your condition and how it was diagnosed and how it was treated. White, for example, mentioned that he was tested to determine his allergies and injections to relieve them. It was a long paragraph.
2. Tax information: If you are a dependent, you will need to collect the necessary documents from your parents.
3. Transcriptions: Your most recent report cards, whether you’re a high school student or an adult back on campus. Your grades will be judged based on the degree you are looking for. As White says, you might not be successful in applying as a chemistry major aspirant if you never did well in your high school science classes.

With a self-proclaimed “unpleasant” medical condition, White initially didn’t think he would qualify for help. But as he confidently states in his book “The Medical Loophole,” you could have a number of illnesses – from ADHD and anxiety to back pain and depression – and still have help for them. tuition fees. More officially, the federal government asserts that qualified applicants for medical financial assistance, such as the vocational rehabilitation program, “have a physical or mental impairment which is a significant barrier to employment.”

This form of financial assistance could have as much of an impact for you as it has for White. At the time of his university studies, his parents’ income was too high to qualify for need-based financial assistance – they withdrew their support after he stopped pursuing computer studies – and his grades were not good enough for merit scholarships. Until he learned about medical financial aid, he thought he would have to borrow to go back to school.

“This was the loophole that helped me avoid a mountain of student loan debt,” says White, who estimates that some of his law school peers have racked up $ 200,000 in debt. “Too many students simply fill out a FAFSA and assume the results will inform [them] of all the financial assistance options to which they are entitled.

How to get medical financial assistance?

No, there is no mention of medical financial aid when families complete the Free Application for Federal Student Aid (FAFSA). As a rule, you have to hunt it.

Here are four ways to find medical financial help:

  1. Contact your state’s higher education authority.
  2. Contact the vocational rehabilitation (VR) agencies in your state.
  3. Talk to schools on your college list and find out about related financial aid.
  4. Check out our list of grant and scholarship programs below.

Of course, finding the right person in the right agency and preparing all the necessary documents is easier said than done.

“I’m sure some people’s eyes are going to roll, and they’re just going to say, ‘God, why don’t I just get a student loan? “” White said.

Of course, applying for the VR program and other medical financial aid may be more difficult than completing the FAFSA, but remember, this is a freebie. Unlike loans, you never have to pay it back.

Avoid the Most Common Mistake of Applying for Medical Financial Aid

White says many vocational rehabilitation applicants are denied help because of a checkbox on application forms. You are asked if your illness will interfere with your ability to find a job. Not wanting to admit a limitation, you could check “No” without realizing that this could disqualify you from the program.

In White’s case, he checked “Yes”. His asthma and allergies would prevent him from working with animals, dust and pollen, for example.

What are the possibilities for medical financial aid?

The vocational rehabilitation (VR) program White applied for has been around for a long time. Born out of the Rehabilitation Act of 1973, virtual reality is funded by both the Department of Education and state governments. White, now a lawyer for the Federal Bureau of Prisons, believes the wrong name has something to do with the anonymity of the program.

According to White’s research, approximately 100,000 students apply for this help each year. That’s a small amount given that 2.4 million qualifying students choose to take out student loans each year, he said.

Unfortunately, other medical finance programs also suffer from a lack of spotlight. Here are some national awards (but be on the lookout for other opportunities specific to your state or region) to know about.

Organization Medical eligibility Assistance Resource
AbbVie Inc. Cystic fibrosis $ 3,000 abbviecfscholarship.com
American Association on Health and Disability Disability Up to $ 999 aahd.us
Cancer for College Cancer survivors $ 5,000 cancerforcollege.org
The Reintegration Center Schizophrenia, schizoaffective disorder or bipolar disorder Varied reintegration.com
Diabetes Fellows Foundation Type 1 diabetes Up to $ 5,000 diabetescholars.org
HIV League HIV Up to $ 7,000 hivleague.org
Karman health care Physical disability $ 500 karmanhealthcare.com
National Hemophilia Foundation Hemophilia A or B $ 1,000 hemophilia.org
Patient Advocates Foundation Chronic or fatal illnesses $ 3,000 (per school year, for four years) patientadvocate.org
Sleep Project Narcolepsy $ 1,000 sleep-project.com
Students with the Heart Foundation Heart disease or malformation Up to $ 6,000 studentswithheart.org
This Is Me Foundation Alopecia $ 500 thisismefoundation.com

What are the benefits of medical financial aid?

Although he took out student loans to cover living expenses while studying law, medical financial aid provided White with enough funds to cover both his undergraduate and law degrees.

The data says he’s not alone. In 2019-2020, the most recent year of statistics available from the Rehabilitation Services Administration, in California, approximately 24,000 students paid a combined $ 53 million. It was $ 2,166 per student, whether they were looking for a certificate, taking a vocational program, or something in between.

There are other benefits to receiving medical financial assistance. If you are a beneficiary of vocational rehabilitation, for example:

  • At school: You may receive “reasonable accommodation,” ranging from a free laptop for school to a private exam room if, for example, you have ADHD.
  • After school: You could apply for positions with a registered disability and receive support during your job search.

Having received nearly six figures of aid, White considers medical financial aid a “bargain.”

“If not for [the Vocational Rehabilitation program], I don’t know if I would have been willing to take the risk of going to law school because [was] such an expensive endeavor, ”White says. “It helped me take that risk to get more education, which is a big factor for a lot of people. If you take money out of the equation, they might be more willing to do bigger and more amazing things. “

If you have a documented medical condition and want money for your education, consider your options for medical financial assistance and hopefully reap the rewards.

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How to apply in 2021 https://sohamsa.org/how-to-apply-in-2021/ Thu, 07 Oct 2021 15:30:11 +0000 https://sohamsa.org/how-to-apply-in-2021/ Here’s a look at what has changed and how the estimated 600,000 borrowers it could affect can apply. Biden’s changes to the PSLF program Students can now become eligible for a possible loan forgiveness under any repayment plan. Previously, the limits of eligible repayment plans were more stringent. The article continues under the advertisement According […]]]>

Here’s a look at what has changed and how the estimated 600,000 borrowers it could affect can apply.

Biden’s changes to the PSLF program

Students can now become eligible for a possible loan forgiveness under any repayment plan. Previously, the limits of eligible repayment plans were more stringent.

The article continues under the advertisement

According to the Department of Education, “any previous payment made while you were working for an eligible employer will count as an eligible payment, regardless of loan type or repayment plan.”

This makes it easier for students to maintain their eligibility throughout their career in the public service. Previously, only income-based repayment plans or standard 10-year repayment plans counted.

The article continues under the advertisement

In addition, alumni can now access a loan discount on direct or non-direct federal student loans. Previously, the program was only for borrowers with direct federal student loans, but now non-direct federal loans (including federal family education loans and Perkins loans) count. Additionally, while loan consolidation previously restarted the rebate program clock with a set repayment period, pre-consolidation payments now count.

Payments that were previously rejected for technical reasons will be reinstated to help increase the number of canceled loans (the Ministry of Education will conduct a multi-month audit to this effect).

The article continues under the advertisement

Finally, the military and veterans benefit from some flexibility. The Education Department says it “will allow months spent on active duty to count towards the PSLF, even if the service member’s loans were deferred or withheld rather than canceled. active reimbursement “.

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Federal Government Announces Major Changes to Student Loan Waiver Program | Arizona News https://sohamsa.org/federal-government-announces-major-changes-to-student-loan-waiver-program-arizona-news/ Wed, 06 Oct 2021 23:47:00 +0000 https://sohamsa.org/federal-government-announces-major-changes-to-student-loan-waiver-program-arizona-news/ SCOTTSDALE, AZ (3TV / CBS 5) – Hayley Avino and her husband, Christopher Avino, are both at the service of their community. Hayley is a nurse practitioner and Christopher is a Scottsdale firefighter. Both were able to complete their education with student loans, which they hoped would be canceled as part of the federal government’s […]]]>

SCOTTSDALE, AZ (3TV / CBS 5) – Hayley Avino and her husband, Christopher Avino, are both at the service of their community. Hayley is a nurse practitioner and Christopher is a Scottsdale firefighter. Both were able to complete their education with student loans, which they hoped would be canceled as part of the federal government’s civil service loan cancellation program, which is supposed to alleviate government debt.






, are both at the service of their community. Hayley is a nurse practitioner and Christopher is a Scottsdale firefighter. Both were able to complete their education with student loans, which they hoped would be canceled as part of the federal government’s civil service loan cancellation program, which is supposed to alleviate government debt.

Getting help through the program was extremely difficult.




Getting help through the program was extremely difficult. “For some reason in the last 18 months, even though they told him it was approved, his forgiveness was not applied,” Hayley said. “There were 18 payments that should have been applied and they were not.”

The program, which began in 2007, has encountered many problems, with thousands of teachers, police and health and government officials asking for forgiveness – only to be rejected – for a variety of reasons. Strict requirements and a tedious application process are among the problems.

But things may be about to change. The US Department of Education has just announced a major overhaul of the program that relaxes the rules and will make it easier for borrowers to benefit from debt relief. Marisol Garcia of the Arizona Education Association thinks this could be a game-changer for many teachers living paycheck to paycheck. “It gives them the opportunity to contribute to the economy, but it also allows them to focus on their families and spend more time with their families,” Garcia said. “It’s a really good piece of politics.”

US Department of Education reviews civil service loan forgiveness program

Wednesday’s announcement also includes a pledge to help military service members and federal employees access the resources of the public service loan program.

One of the most important new guidelines allows borrowers to use past loan payments to count toward forgiveness. “It would allow us to use that extra money to go to the grocery store or be a member of a gym,” Hayley said. “I think it would be extremely beneficial.”

Borrowers will still need to prove they are employed in the public sector or working full time when they applied for debt relief. Having to make 120 student loan payments on time is no longer a requirement.

Education Department Eliminates $ 5.8 Billion In Student Loan Debt For Some Borrowers With Disabilities

The program is expected to reach between 500,000 and 1.3 million people. For more details, visit the Ministry of Education fact sheet website.


Copyright 2021 KPHO / KTVK (KPHO Broadcasting Corporation). All rights reserved.

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Student loan refinancing rates are dropping to their lowest level in over a year for many borrowers. So, is it time for you to refinance your loans? https://sohamsa.org/student-loan-refinancing-rates-are-dropping-to-their-lowest-level-in-over-a-year-for-many-borrowers-so-is-it-time-for-you-to-refinance-your-loans/ Wed, 06 Oct 2021 11:41:00 +0000 https://sohamsa.org/student-loan-refinancing-rates-are-dropping-to-their-lowest-level-in-over-a-year-for-many-borrowers-so-is-it-time-for-you-to-refinance-your-loans/ MarketWatch has promoted these products and services because we believe readers will find them useful. We may earn a commission if you purchase products through our links, but our recommendations are independent of any compensation we may receive. Student loan refinancing interest rates drop to their lowest in more than a year, according to data […]]]>

MarketWatch has promoted these products and services because we believe readers will find them useful. We may earn a commission if you purchase products through our links, but our recommendations are independent of any compensation we may receive.

Student loan refinancing interest rates drop to their lowest in more than a year, according to data for the week starting Sept. 27 from Credible, which examined borrowers with credit scores of 720 and above in their market. Interest rates on 10-year fixed rate loans fell to 3.36% and on 5-year floating rate loans to 2.65%. Of course, the rate you actually qualify for depends on a variety of factors, including your credit rating, debt level, and income. For some very creditworthy borrowers, some rates start at around 1.8%, but others will pay more than average for refi.

Here are the rates for the past five weeks for borrowers with a higher credit rating:

Average student loan refinancing rates for borrowers with a credit score of 720 and above

10 years, fixed rate

5 years, variable rate

08/30/21

3.42%

2.74%

9/6/21

3.50%

3.07%

09/13/21

3.49%

2.95%

09/20/21

3.41%

2.93%

09/27/21

3.36%

2.65%

Who should and who shouldn’t refinance their student loans?

The first big question to ask yourself when considering a refi is whether it will save you money – either by lowering your interest rate or shortening the repayment term, or both, says Mark Kantrowitz, student loan expert and author of How to Appeal for More College. Financial aid. Those who have seen their incomes rise, their credit scores improve, or who have paid off large debts may be able to get much better rates than they currently have. This calculator can help you determine how much you would save by refinancing. Note that while a shorter repayment term can result in higher monthly payments, it can easily save you thousands in interest. In addition, “the shorter the repayment term, the lower the interest rate. This is because lenders consider the likelihood that interest rates will start to rise over time, ”Kantrowitz explains.

The other thing you need to consider is the type of loans you have, says Kantrowitz. Those with federal loans should proceed with caution when refinancing a private student loan. First, you’re likely currently benefiting from the federal government’s moratorium on interest-free student loan payments, which runs until January 2022.

And even after the end, it may still be a good idea to skip refinancing as it would “permanently strip federal loans of their potentially useful collateral, such as access to income-driven repayment plans, deferral programs, and forbearance as well as current and potentially future loans. forgiveness programs, ”says Andrew Pentis, Certified Student Loan Advisor and Debt Expert at StudentLoanHero. Rebecca Safier, Certified Student Loan Advisor and Debt Expert at Student Loan Hero, adds Rebecca Safier: “Make sure you have taken into account everything you are going to give up before finalizing the transaction. The federal government offers you protections that your new private lender will not.

Also see: 5 questions to ask yourself before refinancing a student loan.

Should I opt for a fixed rate or a variable rate loan?

While the lowest rates, to begin with, are often variable rate loans, fixed rate loans may be a safer choice in the long term. If you refinance your loan at a variable interest rate, your monthly payment can go up or down – and while it could go down, which would mean a smaller monthly payment, it can also go up and exceed what you would pay on a. fixed rate. -interest rate. Since fixed rate loans often have very low rates right now, those who expect to hold on to their loan for a bit will likely benefit from opting for a fixed rate loan.

How much can I save by refinancing my student loans?

The amount that can be saved by refinancing student loans varies, but it is not uncommon for borrowers to save thousands of dollars over the life of their loan. According to data from New America, the average student loan borrower has about $ 39,350 in loans outstanding and an average interest of 5.8%. If a borrower in this scenario had a 10-year loan but refinanced at the same term at 3.8%, they would save about $ 4,600 over the life of the loan. If the same person reduced their loan term to 5 years, it would save about $ 8,600. This free calculator can help you figure out how much you can save.

One mistake Kantrowitz says people make when trying to value their savings is that they mistakenly believe that cutting their interest rate in half will cut their monthly payment in half. “It actually cuts the payment down to just 10-20%, depending on the repayment term, because the bulk of the payment goes to principal, not interest,” Kantrowitz explains.

Other things to consider when considering refinancing your student loans

While mortgage refinancing costs can be high, student loan refinancing usually doesn’t come at a high cost. That said, watch out for origination fees, application fees, prepayment penalties, late fees, and collection of fees on overdue loans.

Increase your credit score as much as possible in order to get the best rates. To ensure a higher credit score, make sure you pay your bills on time, catch up on overdue accounts, pay off revolving account balances like credit cards, and limit how often you apply for new loans. .

If your credit score is low, some lenders allow you to apply with a co-signer. “Adding a creditworthy co-signer to your application can help you qualify and get better rates, but your co-signer becomes just as responsible for the loan,” says Safier.

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Federal judge rejects decision to write off law graduate student debt, says issues should be decided at trial https://sohamsa.org/federal-judge-rejects-decision-to-write-off-law-graduate-student-debt-says-issues-should-be-decided-at-trial/ Tue, 05 Oct 2021 17:53:00 +0000 https://sohamsa.org/federal-judge-rejects-decision-to-write-off-law-graduate-student-debt-says-issues-should-be-decided-at-trial/ Home Daily News A federal judge rejects a decision erasing the law … Bankruptcy law Federal judge rejects decision to write off law graduate student debt, says issues should be decided at trial By Debra Cassens Weiss October 5, 2021, 12:53 p.m. CDT Image from Shutterstock. New York federal judge overturns law graduate’s decision to […]]]>

Bankruptcy law

Federal judge rejects decision to write off law graduate student debt, says issues should be decided at trial

Image from Shutterstock.

New York federal judge overturns law graduate’s decision to discharge student debt, citing “constellation of evidence” debtor “placed himself in this situation” after giving up legal career .

U.S. District Judge Philip M. Halpern of the Southern District of New York said a bankruptcy judge should not have granted summary judgment to Kevin Jared Rosenberg because he has yet to provide sufficient evidence that the repayment of the loan would constitute undue hardship.

Halpern said in his Sept. 29 decision that he expressed no opinion on whether the student loan at issue – which amounted to a debt of over $ 220,000 – could be discharged in the event of bankruptcy.

“Either party can prevail in a factual trial; but it’s a problem for the bankruptcy court, ”said Halpern.

A bankruptcy judge ruled in January 2020 that Rosenberg could pay off his law student debt in what at the time was considered an “amazing” decision. Student debt cannot be discharged in the absence of undue hardship as defined by a three-part test that is difficult to satisfy.

Halpern said Rosenberg did not submit enough evidence to pass the three-part test, known as the Brunner test due to a 1987 appeal decision that established it.

Brunner’s test examines whether the debtor can maintain a minimum standard of living if forced to repay loans, whether an inability to maintain the minimum level is likely to persist for a significant portion of the repayment period, and whether the debtor made a good faith effort to repay the loans.

Halpern noted allegations that Rosenberg’s inability to repay his student loan was “a monster of its own making,” as claimed by Educational Credit Management Corp., which owns the interest on the debt.

Rosenberg served in the Navy for approximately five years and graduated from the Benjamin N. Cardozo Law School of Yeshiva University in 2004. After graduating from the bar, he worked for less than three months as an associate in a New Jersey law firm making an annual salary between $ 55,000 and $ 60,000.

Rosenberg testified that he was miserable at his job and was fired after a partner found out he intended to leave. He has done contractual legal work sporadically, but now his law degree is “retired”.

When contract legal work dried up during the 2008 financial crisis, according to the ruling, Rosenberg started an outdoor recreation business, sold it, and then started a similar business. The new company, International Adventure Guides, offers guided outdoor tours.

Before setting up the new business, Rosenberg left his studio in Brooklyn, New York, and rented a house in Beacon, New York. Beacon’s lease was $ 2,150 per month, an increase of $ 700 from his rent in Brooklyn.

Rosenberg defaulted on student debt after periods of deferral or withholding. He had paid less than $ 3,000 in debt.

In support of his summary judgment motion, Rosenberg submitted a professional appraisal report indicating that he could work as a legal assistant or paralegal, with an annual salary of $ 42,000 to $ 120,000; as a retail store manager, with an annual salary of $ 45,000 to $ 100,000; and in other customer service or sales roles with an annual salary of $ 36,000 to $ 50,000.

There is also evidence that Rosenberg sustained injuries and underwent surgery “which may or may not have impacted his ability to work,” said Halpern.

Halpern said Rosenberg had not presented any admissible evidence establishing the severity of his injuries and the impact on his ability to work.

Halpern also noted that Rosenberg was earning about $ 1,500 less than needed to meet his current expenses of about $ 4,000 per month, which include rent of $ 2,150 per month.

Rosenberg “offers no substantial explanation as to why its expenses are necessary to maintain a minimum standard of living, and does not point to any admissible evidence to support its conclusive argument that it is, indeed, necessary,” said Halpern.

It’s also not clear whether Rosenberg made a good faith effort to repay the loan, Halpern said.

He “probably made enough money to move out of New York City and rent a two-bedroom house – and ultimately made less than $ 3,000 in payments on a debt that went from an initial balance of $ 116,465 to over $ 220,000, ”Halpern said.

“These considerations are compounded by the plaintiff’s apparent decision to abandon his legal career (ie the area for which he assumed the debt in the first place), his admission that he filed the proceedings from chapter 7 for the purpose of releasing the presumed unreliable student, and his declaration that he has no interest in rehabilitating the debt through a repayment program.… This constellation of evidence certainly suggests a lack of good faith and this plaintiff has, indeed, placed himself in this predicament, ”said Halpern.

Rosenberg did not immediately respond to a request for comment sent to an email address from his company.

Hats off to Bloomberg law.

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What You Need to Know About the FAFSA Parent PLUS Loan, Explained https://sohamsa.org/what-you-need-to-know-about-the-fafsa-parent-plus-loan-explained/ Mon, 04 Oct 2021 17:45:37 +0000 https://sohamsa.org/what-you-need-to-know-about-the-fafsa-parent-plus-loan-explained/ Many parents want their kids to go to college, but no one wants their loved ones to go into debt on student loans. Tuition fees have steadily increased over the years and parents are stepping in to help cover the costs. How the FAFSA Parent PLUS Loan Works To get a Parent PLUS loan, you […]]]>

Many parents want their kids to go to college, but no one wants their loved ones to go into debt on student loans. Tuition fees have steadily increased over the years and parents are stepping in to help cover the costs.

How the FAFSA Parent PLUS Loan Works

To get a Parent PLUS loan, you or your child must complete the FAFSA. Then you need to contact the school for their individual procedures. Most schools will need you to apply for a Parent PLUS loan through studentaid.gov. Parent Plus loans are available up to the full tuition fee less any other financial assistance obtained by the student. The most important thing to note about the Parent PLUS loan is that the loan is paid by the parent, not the student.

While proof of income is required for private loan approval, it is not required for a Parent PLUS loan. Borrowers cannot transfer the Parent PLUS loan balance to a student through the federal student loans program. In addition, Parent Plus loans have some federal projections like deferral and forbearance.

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Parent PLUS loans are one of the more expensive types of federal loans. For the 2021-2022 school year, they have an interest rate of 6.28% plus a set-up fee of 4.228%. For comparison, direct federal loans to undergraduate students have an interest rate of 3.73%. Over the past seven years, the Parent PLUS loan has grown 67%, from $ 62.2 billion to $ 103.6 billion, compared with a 39% increase in undergraduate student loans.

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“The Debt Trap” as Motivation for Investing in Low Cost, High Quality Online Degree Programs https://sohamsa.org/the-debt-trap-as-motivation-for-investing-in-low-cost-high-quality-online-degree-programs/ Sun, 03 Oct 2021 19:05:59 +0000 https://sohamsa.org/the-debt-trap-as-motivation-for-investing-in-low-cost-high-quality-online-degree-programs/ The Debt Trap: How Student Loans Became a National Disaster by Josh Mitchell Published in August 2021 (Simon & Schuster) 44.7 million Americans owe more than $ 1.7 trillion in student loans. Six in ten undergraduates will accumulate debt, the average amount currently being $ 29,850. Only about a quarter of all student debt is […]]]>

The Debt Trap: How Student Loans Became a National Disaster by Josh Mitchell

Published in August 2021 (Simon & Schuster)

44.7 million Americans owe more than $ 1.7 trillion in student loans. Six in ten undergraduates will accumulate debt, the average amount currently being $ 29,850.

Only about a quarter of all student debt is owed by those with a higher education. This graduate student debt, however, is half of the total amount of money owed.

The average debt of students who earn a master’s degree is $ 71,000. Borrow for a law or medicine degree, and your debt is $ 145,500 and $ 201,490, respectively.

3.2 million borrowers, or 37% of all student debt holders, owe more than $ 100,000.

One in five student borrowers are in default, which means they don’t make any payments, but their total loan amounts increase as interest charges mount.

How did we get to this place where student loans are the second largest source of personal debt after mortgages? (We owe around $ 10 trillion on our homes).

The origins, consequences and potential solutions of the history of American student debt are complex. I thought I had a pretty good understanding of how student debt works and why students need to borrow so much money for college. It took reading Josh Mitchell’s essential new book, The debt trap, to fully understand the magnitude of our student loan crisis.

The big gap in my knowledge that The debt trap completed covered the history of student loan policies. Before reading the book, I hadn’t realized how much the federal government prioritized the profits of bankers and shareholders over the welfare of students.

Part of the story of student loans has to do with public disinvestment in higher education. Each successive generation of students from the 1970s had to fund more of their education in public institutions, as state support eroded. The tuition hike was funded not by taxpayer dollars, but by student debt.

Another part of the student loan crisis has to do with the growth of for-profit online educational institutions that have built their business models on student loans while straining their enrollees (many of whom have not obtained their diploma) a lifetime student loan debt.

Nonprofit colleges and universities have not escaped the blame for the history of student loans. There is debate about the relationship between the growth in student loans and the rapid increases in higher education prices over the past three decades. The debt trap makes a strong case for some shared guilt of nonprofit colleges and universities in our student debt crisis.

Reading The debt trap will make you angry with all the lost opportunities to create sane policies that would have increased the opportunities to get a college degree or higher without creating the conditions for unsustainable lifetime debt. Interest payments on student loans have historically been used to fund bank and banker profits and bonuses (for federally guaranteed private student loans) or to pay for other government expenses (for direct student loans). ).

Or The debt trap Could Have Been Expanded is less focused on diagnosing student debt disease, but more on solutions. The final chapter of the book contains Mitchell’s recommendations, which are valid as far as they go. The author recommends the following steps:

  • Forgo interest on student loans.
  • Get four-year schools to put in their own money.
  • Make community college truly free.
  • Review the idea of ​​the American dream to respect and reward the alternatives to the four-year diploma, in particular apprenticeships.
  • The government should stop subsidizing higher education.
  • States, cities and communities should intervene.

All of these ideas make sense, but each has significant challenges and consequences. I wish Mitchell had taken the space to take a more in-depth look at each proposal.

For example, many of his ideas for dealing with the student loan crisis are aimed at shifting the risk of student attendance to schools. It is unclear where most colleges and universities will find the money to offer their own loans or how they would make up for lost tuition fees if loans for graduate programs were to end.

However, forgiving the interest on student loans and making community colleges really free seems to be exactly the right thing to do.

Completely absent from The debt trap is any discussion of the possibility of reducing the cost of higher education and therefore reducing future student debt.

Readers of this blog will know that the most important story in higher education today is the evolution of low-cost (and hopefully high-quality) online degrees.

Creating affordable master’s programs has the potential to dramatically change the conversation about degrees, quality, scale, and price.

Reading The debt trap is expected to provide huge motivation for college and university leaders to prioritize investment and experimentation in developing high quality, low cost online degree programs.

What are you reading?

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Nick Cannon Eliminates Student Debt From Seven HBCU Fellows https://sohamsa.org/nick-cannon-eliminates-student-debt-from-seven-hbcu-fellows/ Sat, 02 Oct 2021 13:52:55 +0000 https://sohamsa.org/nick-cannon-eliminates-student-debt-from-seven-hbcu-fellows/ Eentertainment mogul Nick canon used his platform to amplify the importance of property and financial freedom, and it emphasizes empowering historically black college and university students to take charge of their futures. According to The news and the observer, the TV host unveiled a student debt cancellation initiative for HBCU fellows. During a recent segment […]]]>

Eentertainment mogul Nick canon used his platform to amplify the importance of property and financial freedom, and it emphasizes empowering historically black college and university students to take charge of their futures. According to The news and the observer, the TV host unveiled a student debt cancellation initiative for HBCU fellows.

During a recent segment of his new talk show, the Nick Cannon Show, he underlined the immeasurable importance of HBCUs in the field of education and beyond. He also drew attention to the financial burdens often faced by students attending these institutions. Although there has been a wave of tax support for HBCUs across the country, many students face obstacles related to socio-economic barriers; ultimately dissuading them from pursuing studies. The United Negro College Fund reported that students attending historically black colleges and universities borrow student loans at higher rates than those attending non-HBCUs.

During the show, seven students told their stories candidly; detailing how they overcame insurmountable obstacles to continue their journey into higher education. Among those who shared their trips was a student from Winston-Salem State University Mid-calf Sharandica who spoke about his fight against homelessness, scholar from Saint Augustine University Mackenzie este who shared that she worked multiple times to cover her tuition and a student at Texas Southern University D’Angelo Coulter who spoke of having almost dropped out of university because he could not afford it. To support the students as they move forward by cultivating the foundation for success, Cannon surprised them by telling them that he would eliminate their student loan debt after graduation.

“Historically, black colleges and universities have played a pivotal role in the development of some of the brightest minds and influencers of our time,” Cannon explained on his show. “I have been so moved by all of your stories and the obstacles you have overcome that I must help you. Our show has partnered with some of the largest national scholarship providers, such as the Thurgood Marshall College Fund, to give each of you a scholarship to cover your outstanding student loan balances. After you graduate from college, we eliminate your student debt – every penny. “

Cannon’s generous act comes a year after earning a degree in criminology and administration of justice from Howard University and a minor in African studies.

SEE ALSO:

Nick Cannon graduates from Howard University

Alpha Kappa Alpha Sorority Reaches Historic Milestone in HBCU Fundraising

President Obama forgives national thanksgiving in Turkey

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