Here are the best student loan articles from around the web.
Student Loan News
1. One Company Is Working Hard To Make Sure Your Student Loans Stay With You Until You Die:
Sometimes, terrible things happen in life. When something like cancer strikes, despite your best intentions and hardest efforts, medical bills and unemployment can leave you in a position where paying off your student loans is just not a thing you can make happen.
Theoretically, that’s where bankruptcy comes in. Reality, however, doesn’t follow the theory. As the New York Times reports, there is an agency out there working their butts off pushing back on bankruptcy to make sure that student debt is as permanent as possible. Official source: http://consumerist.com/2014/01/03/one-company-is-working-hard-to-make-sure-your-student-loans-stay-with-you-until-you-die/
2. How A Private Company Stacked The Deck Against Student Loan Debtors:
After two decades of work, the company tasked with collecting payments on government-financed student loans from borrowers who declare bankruptcy has helped create a system that treats student debt far more harshly than other borrowing. The company’s zeal for the task has led it to hound cancer survivors and other unfortunate, hard-working souls, and has reshaped the relationship between student loans and bankruptcy law in ways that exacerbate the country’s trillion-dollar student loan problem.
Congress created the Educational Credit Management Corporation (ECMC) indirectly in the early 1990s when it sought to tackle the high rate of default on student debt by giving the Department of Education (DOE) “a set of unprecedented collection tools” such as garnishing wages and tax rebates, the New York Times explains. ECMC, founded in 1994, is the largest of the private companies that the DOE uses to exercise those collection tools during bankruptcy proceedings. More tips here: http://thinkprogress.org/economy/2014/01/02/3113801/student-loans-private-company-bankruptcy/
3. Student-Loan Debt Slows Recovery:
This year featured yet another political battle over student-loan interest rates. But while Congress resolved that matter, it did nothing about exceptionally high loan burdens, which increasingly are weighing on borrowers and likely putting a drag on the recovery.
Undergraduate borrowers who graduated in 2012 owed, on average, $29,400 in student debt, up a staggering 25% from four years earlier, the nonprofit Institute for College Access & Success said. Americans now owe around $1 trillion in student debt, according to the Federal Reserve Bank of New York. Over here: http://blogs.wsj.com/economics/2013/12/30/student-loan-debt-slows-recovery/
My Favorite Student Loan & Personal Finance Blog Posts
1. How A Forbearance Student Loan Affects Getting A Mortgage:
Forbearance on a student loan means temporary allowance, of suspension or cessation of loan payment due to financial problems. In case you are a borrower and are worried what effect this can have on getting a mortgage later, you need not worry much; it should not have any direct effect on your credit score. In case, your credit score is all a mortgage lender is looking at to determine your eligibility for a loan, the forbearance should not have any impact on your ability to obtain say, a home loan. Also, taking an additional debt does not create problems for your student loan’s forbearance status. The only thing you should know is that you should not forget to make payments once the forbearance period expires. If you default on payments once the forbearance ends, then it could affect your home loan if the approval is still under process. Read full article
2. Why Student Loans Are a Bad Idea And Actually Hurt Students:
College tuition costs have been skyrocketing and the more they go up, the more the government tries to help make college more affordable. Americans owe $1 trillion in student loans, even more than they owe in credit card debt. The federal government has been involved in student loans since 1958, either by guaranteeing loans made by private banks or by giving out loans themselves. Tuition rates have been increasing at about twice the rate of inflation, and still, proponents of federal student loans have yet to connect the dots.
Their intentions are good, but the government’s involvement is precisely what has resulted in the rise of tuition costs. Why do schools continue to increase their prices every year? Because they can. The government gives the schools whatever money they ask for, because “we must help everyone get a college degree.” If the government were to give everyone money to buy computers, the price of computers would also skyrocket. Read full article
3. New York Times Investigative Report Focuses on Student Loan Guaranty Agency:
The New York Times Thursday ran a lengthy investigative report on one of the largest student loan guaranty agencies in the country and their practices related to rare bankruptcy petitions to expunge student loans.
The report focuses on how Educational Credit Management Corporation (ECMC) advocates for the Department of Education in cases where consumers attempt to get relief from student debt in bankruptcy proceedings.
Student loans are very well-protected from U.S. bankruptcy code. But at least several hundred borrowers per year attempt to have the debts expunged in the bankruptcy process. ECMC is hired by ED to challenge the filings when they arise. Read full article