Category Current Events

Student debt worries? Options for paying it off

USA TODAY – Opening up the mailbox to find those long-awaited college acceptance letters is one of the high points for high school seniors. Incurring student loan debt, however, is the reality for millions of these young students who need a way to finance their education.

According to a TransUnion study, student loan balances increased a whopping 75 percent from 2007 to 2012. The average debt per borrower increased by 30 percent to $23,829.

There is some good news, however, for those who have taken out federal student loans. The interest rates on those loans are lower than private loan interest rates.Borrowers also have more legal rights with federal loans than they do with private loans. Here are some important rights to be aware of:

1. The Right to Defer Payment...

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Student Loan interest rate proposal draws critics By Amy Tsai The Daily Tar Heel

http://www.dailytarheel.com/article/2013/04/student-loan-interest-rate-cap-proposed

President Barack Obama has offered a way to keep interest rates on student loans low, but critics say it might not be a long-term solution.

Under Obama’s proposed budget, the interest rates on subsidized Stafford student loans will fall to an all-time low of 2.79 percent next year.

Each year, the interest rate on subsidized loans would be based on the market value of a 10-year Treasury note.

But his plan does not include a cap on how high the market can drive up student loan interest rates.

The 3.4 percent interest rate on subsidized student loans was scheduled to double last summer, which Obama criticized in a speech atUNC-CH in April 2012.

Congress eventually delayed the increase until July 1.

Kris...

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Ask Farnoosh: Best Ways to Pay Off Your Student Loans By Farnoosh Torabi

http://finance.yahoo.com/news/ask-farnoosh–best-ways-to-pay-off-your-student-loans-173529893.html

Kate asks: We can borrow equity against our home at 4%. Is it worth it to take out an equity loan to pay off our student loans (undergrad and graduate), the bulk of which are locked in at 6.8%? Also, I’m close to paying off my undergraduate student loan. Should I put the money I was placing towards that loan each month into savings or into paying off my graduate student loans? We are credit card debt free and at this rate will be free of all student loans in three years.

Dear Kate,

Home equity loans can be a relatively cheap way to borrow versus personal loans and credit cards, thanks to their low interest rates. But with only a few years left to pay off your student loans, it’s important to ...

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3 Reasons Paying Off Student Loans With Credit Is A Terrible Idea

Deanna TempletonCredit.com | Apr. 17, 2013, 1:37 PM

In a recent article on little-known facts about student loan debt, we covered why bankruptcy is almost never an option for getting around overwhelming student loan debt burdens.

The article prompted a reader to pose the following question:

The other day I was participating in a discussion on Twitter. Someone suggested that using a credit card to pay off student loans was the way to go. Why? They felt as though they would then be able to have the debt erased in bankruptcy because it would now be considered credit card debt and not federal student loan debt. Any thoughts on this? I wondered how far back the bankruptcy courts would look to see if this is indeed what happened and, if so, if this could backfire on those who are using the...

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3 Little-Known Facts About Student Loan Debt

by Deanna Templeton on 03/14/2013

n June of 2010, student loan debt made headlines when it surpassed credit card debt here in the U.S. Since then, outstanding student loan debt has surpassed the $1 trillion mark — making it the single largest form of household consumer debt outside of home loans.

There’s no question that student loan debt continues to be a growing concern — not only for students and graduates, but for parents, grandparents and policymakers alike.

With so much media attention on the state of student loan debt, public awareness of the issue has grown substantially...

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How Much Money Does the Government Really Make From Student Loans?

Author : ANDREW P. KELLY

On July 1, the interest rate on roughly one out of every three new student loans is set to double, from 3.4 percent to 6.8 percent. Unless Congress steps in to stop it.Having déjà vu? You should be: We had this same conversation last year. Except this time, the arguments from student advocates have become even more divorced from fiscal reality.To refresh your memory: In 2007 Congress set the interest rate on subsidized Stafford Loans, which largely go to low-income borrowers, at 3.4 percent. The rate was due to sunset last July, but Congress, the President–even Nominee Romney–all sought to out-pander one another to extend the policy for a year. The temporary fix cost taxpayers about $6 billion.But surely the benefits to borrowers were huge, right? Hardly...
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Student Loan Debt Creates Drag on Economy and Older Americans

From : Huffington Post 4.12.13

Student loan debt is fast becoming a major problem in the United States. The level of student loan debt has now exceeded the amount owed on all credit cards. And it’s growing.
While many of us have been crying out for some changes to the options consumers have to best handle student loan debt, no new changes are on the forefront. At least no good changes.
One upcoming proposal is to eliminate the fixed rate interest charged on student loans and instead make them variable interest. In good times that’s a benefit but in times of high interest rates, the cost of servicing student loans will become a bigger burden.
Another change is an increase is scam companies that are popping up to charge student loan holders for help with their loans they can get for free fro...
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NYU Students: Debt and Debtor

Author : Nick Pinto, Photographs by Nic Alegre

Walking around Greenwich Village, it’s easy to find reinforcement for the popular stereotype of New York University as a rich-kid school. On a fall evening, the bars and restaurants near the campus can feel completely overrun with a swarming mass of fashionably dressed students splashing out on Mom and Dad’s credit card, apparently heedless of the recession and living the downtown dream.nicalegrephotography.comAndrew JenksAndrew Jenks and masked NYU students during the ‘Casualties of Debt’ protest.Related Content

Lyndsey always resented that stereotype. That’s not to say she doesn’t acknowledge some truth to it, but she knew it didn’t apply to her...

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Explore How Student Loans May Become Bigger Credit Risks

Author : EQUAL JUSTICE WORKS

Last month the Student Loan Ranger examined a post from the Fair Isaac and Company’s (FICO) Banking Analytics Blog that concluded that large amounts of student debt alone are not enough to lower your credit score.In fact, handled responsibly (meaning you pay back your loans on time and build up an excellent payment history), student loans can positively affect your score. But a new FICO report,“Is Growing Student Loan Debt Impacting Credit Risk?”—which describes the increased credit risk posed by student loans—leads the Student Loan Ranger to wonder how long this will be the case.[Learn how some schools help students avoid student debt.]Many of the report’s findings will not be news to regular readers of this blog...

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Student debt concerns Coalition

Author : Daniel Hurst

The federal opposition says the removal of caps on the number of university student places lacked foresight and has contributed to the nation’s ballooning bill for outstanding student loans.But the Coalition is stopping short of pledging to reintroduce the caps if it wins this year’s election.A Grattan Institute report released on Monday showed outstanding student loans stood at $26.3 billion, including $6.2 billion that was not expected to be repaid.The report said the amount written off was because some Higher Education Loan Program debtors were forecast to move overseas or die before their debt was repaid. Tertiary Education Minister Chris Evans has asked his department to consider ways to recover payments from people now living in another country...

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