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Student Loans

How a Change of City can Change your Life (and Loan)!

By | Student Loans, Student Loans II | One Comment

Are you one of the millions of students who are struggling to make their student loan repayments? The first things you need to be aware of are the options available to you to improve your financial situation. See our SURVIVAL GUIDE for ways to beat the student loan crisis. Let’s assume that you‘ve considered all the survival tips we offer and already taken advantage of Obama’s Forgiveness Plan (if not – why not?), but you’re still struggling with your repayments. What’s next?

Well, maybe it’s time to take your destiny into your own hands and consider making a drastic change in order to prosper? We’ve previously touched upon the idea of moving to a new city to obtain increased assistance with your loan, and that could be a solution that you need to seriously consider. In this article we will look at exactly how a change of scene could dramatically improve your life.

“They always say time changes things, but you actually have to change them yourself”

Andy Warhol

The thought of uprooting and making a fresh start in a new city, is of course, somewhat daunting. Leaving behind the familiarity of your home town and the comfort of being close to your friends and family is a big step, and not something that anyone would do without serious thought and consideration. However, staying in your comfort zone is often all too too easy and unchallenging. If you really want to conquer your student debt, you will need to make sacrifices, pursue your personal goals and make important life decisions. A change of city may actually be just the challenge that you need.

Your life is defined by the big decisions that you take. In this article we will evaluate the process and the advantages of making a geographical change to improve your economic welfare. Our aim is to help you decide if the ‘big move’ is the right decision for you.  

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new”                                              

‘Socrates’ (actually a gas station worker, given this nickname by Dan Millman)

Later in this piece we’ll examine three examples cities and what incentives they offer new citizens. But first let’s address why these cities are trying to tempt you make that move. The first thing to be aware of is that you yourself are an asset. You are a smart, educated and (hopefully) motivated individual. Any machine (or city) is built from its components (or infrastructure and citizens) and that machine is only as good as the quality of those components and the way in which they combine and contribute to its end product. The essential point here is that YOU ARE AN ASSET! You can contribute to the success of a city with your talent and to its economy with your taxes.

Some cities are looking to recruit citizens with specific qualifications and others are more interested attracting all types of graduates who are prepared to make changes in order to be successful. Know your own worth and be prepared to adapt yourself to achieve your goals, and you could be just what they are looking for!

“If you do not change direction, you may end up where you are heading”

Lao Tzu

Don’t start packing your suitcase quite yet – here are the factors you should consider before deciding to change cities…

  • What stipulations are attached to the offer? Is there a minimum time you need to live in the new city for? Are you required to live in a specific part of that new city?
  • How do you really feel about moving to a new city and rebuilding your social and professional life from scratch?
  • How do the living costs compare with where you currently live?
  • How is employment in the new city? Would you be able to find a job in your industry? How would the wages compare with what you currently earn?
  • Do your research before the move. Look at what infrastructure and entertainment the new location offers. Research, climate, crime statistics and the local economy.
  • Will your new work be close to your new home? Can you rely on public transport? Will you require a car?
  • Consider the worst possible case scenario.  If you are unhappy in the new city, you lose your job, or need to return home because of a family emergency, what is your contingency plan?

“Sometimes if you want to see a change for the better, you have to take things into your own hands”

Clint Eastwood

So once you’ve weighed up the pros and cons of making the big move, and you decide it’s the right thing for you to do, your next task is to decide where to go. Here are three examples of cities looking for graduates, and what they can offer you.

DETROIT, MICHIGAN www.detroitlivedowntown.org

Offer: Up to $20,000 loan forgiveness towards the price of buying a house. If you decide to rent,  $2,500 rental aid in year one and $1,000 for year two.

Pros: Detroit loves the performing arts and has many theatres in addition to two of the biggest live music venues in the US. It was also the home to one of the world’s most famous record labels – Motown. Detroit has a proud sporting tradition and is home to four major teams, The Pistons (basketball), The Tigers (baseball), The Lions (football) and The Red Wings (ice hockey). The Detroit International Riverfront is another extremely popular feature of the city,  home to many of the city’s hotels, shops and restaurants as well as a cruise ship passenger terminal and dock, marina, events centers, several parks and elegant high-rise apartments.

Cons: Detroit ranked as the 6th most dangerous city in the US (Neighbourhood Scout).

Requirements: You’re required to reside in stipulated neighbourhoods and be employed by specific companies (for example: Strategic Solutions, Quicken Loans, Blue Cross Blue Shield of Michigan, Compuware, DTE Energy or Marketing Associates).

KANSAS www.kansascommerce.com

Offer: If you move to a Rural Opportunity Zone, you can cash in forgiveness of up to $15,000. The program will pay 20% of your outstanding loan debt with a limit of $3,000 per year (for a period of up to 5 years). Some zones also offer free lots for construction of a new house and a reduction of 50% on percent property tax (for the first ten years). Additionally you may qualify for a waiver on Kansas income tax depending on circumstances.

Pros:  A great variety of different locations to choose from. Typically the cost of living is low with a relaxed lifestyle in small and safe communities. Plenty of open space, good food and locally produced beer and wine.

Cons: No big city bright lights and culture.

Requirements: You’ll need to settle in one of the 77 counties listed as Rural Opportunity Zones.

SASKATCHEWAN, CANADA www.saskatchewan.ca

Offer: Forgiveness of $20,000 of tuition fees through the Graduate Retention Program (payed over 7 years).

Pros: A relaxed lifestyle in a safe area with an abundance of fresh air and open spaces. Saskatchewan hosts annual arts and culture festivals, great sports facilities and a high quality health care system including free kindergarten provision. The taxes and living costs are amongst the cheapest in Canada.

Cons: Take a jacket, it gets pretty chilly in winter. Be prepared to make your own entertainment, a lack of big city shopping malls and culture.

Requirements: You need be a graduate from a list of approved programs and colleges. In addition to residing in Saskatchewan, you’ll need earn a salary and pay income tax in that province.

Life is like riding a bicycle. To keep your balance, you must keep moving

Albert Einstein

Author: Jim Davies

Photo: Courtesy of Uwe Krella / Flickr

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

The Argument for Tuition-Free College

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In 1862, President Abraham Lincoln signed the Land Grant College Act into law, laying the groundwork for the largest system of publicly funded universities in the world. Some of America’s greatest colleges, including the University of Minnesota, were created by federal land grants, and were known as “democracy’s colleges” or “people’s colleges.”

But that vision of a “people’s college” seems awfully remote to a growing number of American students crushed under soaring tuitions and mounting debt. One hundred and fifty years after Lincoln made his pledge, it’s time to make public colleges and universities free for every American.

This idea is easier than it looks. For most of our nation’s history, public colleges and universities have been much more affordable than they are today, with lower tuition, and financial aid that covered a much larger portion of the costs. The first step in making college accessible again, and returning to an education system that serves every American, is addressing the student loan debt crisis.

The cost of attending a four-year college has increased by 1,122 percent since 1978. Galloping tuition hikes have made attending college more expensive today than at any point in U.S. history. At the same time, debt from student loans has become the largest form of personal debt in America—bigger than credit card debt and auto loans. Last year, 38 million American students owed more than $1.3 trillion in student loans.

Once, a degree used to mean a brighter future for college graduates, access to the middle class, and economic stability. Today, student loan debt increases inequality and makes it harder for low-income graduates, particularly those of color, to buy a house, open a business, and start a family.

The solution lies in federal investments to states to lower the overall cost of public colleges and universities. In exchange, states would commit to reinvesting state funds in higher education. Any public college or university that benefited from the reinvestment program would be required to limit tuition increases. This federal-state partnership would help lower tuition for all students. Schools that lowered tuition would receive additional federal grants based on the degree to which costs are lowered.

Reinvesting in higher education programs like Pell Grants and work-study would ensure that Pell and other forms of financial aid that students don’t need to pay back would cover a greater portion of tuition costs for low-income students. In addition, states that participate in this partnership would ensure that low-income students who attend state colleges and universities could afford non-tuition expenses like textbooks and housing fees. This proposal is one way to ensure that no student graduates with loans to pay back.

If the nation can provide hundreds of billions of dollars in subsidies to the oil and gas industry and billions of dollars more to Wall Street, we can afford to pay for public higher education. A tax on financial transactions like derivatives and stock trades would cover the cost. Building a truly affordable higher education system is an investment that would pay off economically.

Eliminating student loan debt is the first step, but it’s not the last. Once we ensure that student loan debt isn’t a barrier to going to college, we should reframe how we think about higher education. College shouldn’t just be debt free—it should be free. Period.

We all help pay for our local high schools and kindergartens, whether or not we send our kids to them. And all parents have the option of choosing public schools, even if they can afford private institutions. Free primary and secondary schooling is good for our economy, strengthens our democracy, and most importantly, is critical for our children’s health and future. Educating our kids is one of our community’s most important responsibilities, and it’s a right that every one of us enjoys. So why not extend public schooling to higher education as well?

Some might object that average Americans should not have to pay for students from wealthy families to go to school. But certain things should be guaranteed to all Americans, poor or rich. It’s not a coincidence that some of the most important social programs in our government’s history have applied to all citizens, and not just to those struggling to make ends meet.

Universal programs are usually stronger and more stable over the long term, and they’re less frequently targeted by budget cuts and partisan attacks. Public schools have stood the test of time—let’s make sure public colleges and universities do, too.

The United States has long been committed to educating all its people, not only its elites.

This country is also the wealthiest in the history of the world. We can afford to make college an option for every American family.

The richest 25% of American families account for more than half of all college graduates

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Graduating college is much harder if you’re poor, a new report indicates.

In 2014, just 10% of dependent family members who said they received a bachelor’s degree by the time they were 24 years old came from families in the lowest income quartile, according to a study released Tuesday by the Pell Institute for the Study of Opportunity in Higher Education in Washington, D.C. and PennAhead, an organization at the University of Pennsylvania focused on higher education policy. By contrast, 54% of bachelor’s degrees awarded to dependent family members went to those in the highest income quartile.

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There are a number of reasons for that gap in college attainment and for why it’s remained so large for so long, said Margaret Cahalan, the director of the Pell Institute. These include rising college costs and growing income inequality, which can make it more difficult for poor students to afford to get through college and move up the economic ladder, she said. “We’ve increased the number and the percentages of students going into college and we’ve narrowed that gap a little bit, but what we haven’t narrowed is bachelor’s degree attainment,” she said.

The report also points to the declining value of a Pell Grant, the money the federal government provides to low-income students to attend college, as one of the reasons poor students struggle to get through school.

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In other words, Pell Grants don’t cover nearly as much of students’ tuition as they used to. That means low-income students have to rely increasingly on loans, work and other sources of income to afford tuition, never mind all of the other expenses that come with being a college student. In this way, the declining value of a Pell Grant leads to inherently unequal situations for college students, Cahalan said.

“A student from the highest income category is not necessarily required to work to just barely survive,” she said.

It’s not just the lack of funding that may be keeping poor students from getting degrees. It also may be the schools they’re attending. The report notes that the gap between two-year public colleges and four-year public colleges has widened over time. In many cases, students with less money are attending schools with fewer resources, making it more difficult for them to get through. “We have one system for the poor students and then we have one system for the middle-class students and then we have one system for the very, very rich students,” Cahalan said.

The student body at for-profit colleges is largely made up of poor students, as well. The report found that three quarters of students at four-year for-profit universities were receiving Pell Grants, compared to one-third of students at private non-profit four year schools and nearly 40% of students at public colleges. Students who attend for-profit colleges are less likely to graduate, according to data from the Department of Education.

Still, Cahalan cautioned against placing too much weight on the role of for-profit colleges in the gap in college degree attainment between poor and rich students, because she noted that these schools still serve a very small population of poor college students overall. In addition, she said for-profit schools are often enrolling students that other, more selective schools won’t take.

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Critics say for-profit colleges target poor students with promises of degrees and better jobs that they ultimately don’t fulfill. During the Great Recession, enrollment at for-profit colleges jumped sharply as people struggling to find and keep jobs looked to re-tool.

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Student Debt Crisis 2016: Millennials Regret College Loans, Struggle To Pay Them Back

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The millennial generation is definitely in debt, and many aren’t handling it very well. That’s one takeaway from a survey out Thursday from Citizens Bank that found millennials are spending big chunks of their salaries paying off loans and trying to live frugally but are still operating under the impression they’ll be making payments into their 40s.

“The long-term cost of college continues to be a major challenge for millennials, even after they have established themselves in the workforce and significantly improved their credit from where they were when they started school,” Brendan Coughlin, president of consumer lending, said in a news release. “As this generation of college graduates starts to contemplate future life events like home purchases and retirement, it becomes increasingly important for them to take control of their college debt whether it’s through refinancing or other tactics that can help them limit its impact on their overall financial health.”

The survey, which contacted 501 millennials with student loans in February, found 57 percent of respondents said they regretted taking out so much in loans. As the Institute for College Access and Successnotes on its website, the average student graduating from college in 2014 with debt owed $28,950.

But paying that off could require sacrifices some millennials aren’t eager to make. For example, only about half of debtors said they’d limited shopping, eating out and social spending to afford their monthly payments. Bloomberg reported 59 percent said they had “no idea” when they’d be in a position to pay off their loans entirely.

“They are very committed to living their life the way they want to live their life, and as frustrated as they are by student loans, they are not willing to make those lifestyle tradeoffs,” Coughlin told Reuters.

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Another hurdle: Millennials might not know exactly what they’re paying. A third of respondents to the survey said they didn’t know their interest rate, and 75 percent said they didn’t plan to try refinancing as a way to manage their debt.

Are you among them, and are you panicking? Calm down: The fastest methods for paying off student loans include treating them like a mortgage, creating a gameplan and working part-time while in school,according to Bankrate.

Millions of Americans Aren’t Repaying Their Student Debt. Are You One of Them?

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Do you have student loans still hanging over your head? You’d be in good company: 22 million other Americans do, too, reports the Wall Street Journal. You’d also have a lot of company if you’ve unfortunately found yourself in default (3.6 million people), delinquent on payments (3 million people) or postponing payments (3 million people). Which leaves 12.5 million folks who are current on their loans.

What’s with all those people not paying back the more than $200 billion they collectively owe? As WSJ reporter Josh Mitchell discusses in the video above, when you have a low-paying job, a ton of bills and not enough cash to go around, you have to prioritize what gets paid and what doesn’t. That means your car payment and your rent or mortgage are probably at the top of that must-pay list, and your student debt slides to the bottom.

Watch the video above to learn what the far-reaching effects of all those people not paying could be and what the Obama administration is doing to try to improve the odds on student loan repayment.

Why Obama is forgiving the student loans of nearly 400,000 people

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Hundreds of thousands of student loan borrowers will now have an easier path to getting their loans discharged, the Obama administration announced this month.

The Department of Education will send letters to 387,000 people they’ve identified as being eligible for a total and permanent disability discharge, a designation that allows federal student loan borrowers who can’t work because of a disability to have their loans forgiven. The borrowers identified by the Department won’t have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter.

If every borrower identified by the Department decides to have his or her debt forgiven, the government will end up discharging more than $7.7 billion in debt, according to the Department.

“Americans with disabilities have a right to student loan relief,” Ted Mitchell, the undersecretary of education, said in a statement. “And we need to make it easier, not harder, for them to receive the benefits they are due.”

About 179,000 of the borrowers identified by the Department are in default on their student loans, and of that group more than 100,000 are at risk of having their tax refunds or Social Security checks garnished to pay off the debt. Often borrowers losing out on these benefits aren’t even aware that they’re eligible for a disability discharge, said Persis Yu, the director of the Student Loan Borrower Assistance Project at the National Consumer Law Center.

“Borrowers just frankly don’t know about this program,” she said. “In the past it’s been incredibly complicated to apply and that process has been getting better over time, but some people just assume that it’s not going to work.” The letters will help make more borrowers aware of their rights, Yu said.

The government identified eligible borrowers by matching Department of Education data on student loan borrowers with Social Security Administration data to determine which federal student loan borrowers are receiving disability benefits and whose conditions aren’t expected to improve.

Yu commended the collaboration and applauded the announcement, but she said she wished it went one step further by automatically stopping collections and garnishment on borrowers the government identified as eligible for a disability discharge. The Department may struggle to reach some borrowers because they don’t have their most updated information on file, she noted. In addition, some borrowers who qualify for discharge because of a psychological reason — such as an Alzheimer’s patient — may not be capable of understanding the materials they receive, she said.

“We identify you as somebody who qualifies for this, so as long as we’ve identified you can we at least stop taking your money?” Yu said.

Eligible borrowers who do decide to take advantage of the discharge option should be aware that the forgiven debt may be considered taxable income. The Obama administration asked Congress in its 2017 budget proposal to get rid of the tax penalties for disability discharges, but meanwhile borrowers may find themselves paying taxes on the forgiven loans.

Despite these drawbacks, Adam Minsky, a Boston-based lawyer who specializes in student loan issues, said he’s “cautiously optimistic,” about the announcement and will be watching to see how it plays out. “When you’re already totally and permanently disabled it can be challenging to go through this process without some help,” he said. “If this helps people that are clearly eligible for discharge get one with less red tape, less waiting and less uncertainty, that’s great.”

5 Careers with Student Loan Forgiveness

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More than $130,000 in student debt, Leah Burke, a 33-year-old employed at a not-for-profit medical college in New York City, overheard a public service announcement about Public Service Loan Forgiveness.

“I wasn’t sure about the specifications and heard an ad on the radio,” says Burke, who graduated three years ago with a Master of Public Administration from CUNY—Baruch College. “Among nonprofit professionals there is an understanding that loan forgiveness exists, but some people see it as an urban legend.”

Public Service Loan Forgiveness is a government program that forgives the federal loans of a borrower who works in the nonprofit or public sector after 120 qualified monthly payments.

[Discover more methods of student loan forgiveness.]

A qualified payment is a regular monthly payment for at least 10 years by an employee working full-time at a nonprofit or public institution. One caveat: a Perkins loan or a Federal Family Education loan need to be consolidated into a direct consolidation loan to be eligible.

After learning more about the PSLF program, Burke consolidated her student loans and submitted her employment information to FedLoan Servicing, the federal loan servicer for thePSLF program. FedLoan Servicing determines if a borrower’s employer qualifies and tracks the applicant’s progress in meeting the requirements for loan forgiveness.

“I’ll be out of student loan debt by the time I’m 45,” say Burke, who borrowed federal as well as private student loans, which aren’t eligible for forgiveness. “I thought that I’d be paying for school for the rest of my life.”

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

The first borrower with federal student loan forgiveness will be in October 2017 – 10 years after the program’s introduction.

Here are some career paths that may lead to student loan forgiveness at the federal or state level.

Nonprofit employee: A borrower working at a tax-exempt nonprofit or a nonprofit organization that provides a qualifying public service, such as a not-for-profit hospital, is eligible for the federal program.

Burke’s work as an alumni coordinator is eligible for the program since it’s not the job that qualifies, but the type of employer.

[Check out three tips for securing student loan forgiveness.]

Civil servant: “The PSLF program provides forgiveness of federal loans if you’re working for a government job or a qualified nonprofit organization,” says Stephen Dash, founder and CEO of Credible, a student loan information site.

The government job can be at any level – federal, state, local or tribal.

The forgiveness amount is non-taxable income. This program is separate from the loan forgiveness offered to borrowers through the Income-Based Repayment Plan – a federal repayment scheme that offers forgiveness after 20 or 25 years of repayment, depending on the type of loan.

Teachers: In addition to PSLF, there are additional programs at the federal level for teachers – the Teacher Loan Forgiveness and the Teacher Cancellation for Federal Perkins Loans.

Under the Teacher Loan Forgiveness program, a teacher can have up to $17,500 of federal loans forgiven after teaching five years at a low-income elementary or secondary school.

And if the teacher has Perkins loans, 15 percent of those loans will be forgiven after one year of service, teaching at a low-income public or nonprofit school.

[Learn how to avoid turning into a scary student loan statistic.]

“Around half of the states also offer benefits to teachers,” says Dash, and many states have special loan forgiveness programs for teachers serving high-need areas.

States with loan assistance programs for teachers working at schools in high-need areas, such as math and special education, are available in Montana, New York, Oklahoma, Texas and Tennessee, among others. The Teach for Texas Loan Repayment Assistance Program offers up to $2,500 annually in loan forgiveness to teachers working at schools in a high-need area, for example.

Lawyers: While PSLF is available for attorneys working in public service, there are other programs at the local and state level for borrowers with debt from law school.

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

The District of Columbia, Iowa, Louisiana, Maine, New Hampshire, Oregon, Pennsylvania, Texas and Vermont have bar associations that offer loan repayment programs for attorneys who provide services to low-income residents.

“Both programs combined make it financially feasible for me to stay in the profession,” says Maggie Donahue, 34, an attorney at Legal Aid, who graduated with $61,500 in law school debt from American University’s Washington College of Law.

Donahue is banking on PSLF to forgive her federal student loans while receiving assistance from the District of Columbia Bar Association, which offers loan assistance to attorneys working in legal aid.

The D.C. Bar Association provides enough loan assistance to Donahue for her to cover her monthly income-based repayment of $416 a month, but that doesn’t cover all the interest on the loans, she says.

“I’ve been making financial decisions based on that promise that the loans are going to be forgiven after 10 years,” Donahue says.

Physicians: Depending on the type of medical center where a physician or health care professional works, he or she may be eligible for the federal loan forgiveness program, student loan experts say.

Forty percent of borrowers graduating from medical school say they plan to seek loan forgiveness, according to the Association of American Medical Colleges.

There are programs in more than 30 states that offer physicians some form of student loan repayment assistance, many of which are designed to serve rural or under-served urban area, Dash says.

“The portion of lawyers that go into public defense is small compared with physicians or health care,” Dash says. “These programs are to fill skill shortages.”

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

Bill Clinton’s Claim That College Loans Can’t Be Refinanced Is Mostly True

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Former President Bill Clinton raised a hot-button issue while stumping for his wife in Los Angeles this week: America’s mounting student loan debt.

Student debt in the United States has reached $1.3 trillion, which trails only the amount Americans owe on their mortgages. It’s often blamed for preventing young people from buying houses and cars, which fuels the country’s economy.

Undergraduates in the class of 2015 finished school with an average of $35,000 in student loan debt, the most in history, according to Edvisors.com, a financial aid website.

If elected president in November, Democratic frontrunner Hillary Clinton would remove a unique barrier related to college loans, the former president claimed.

“A college loan is the only loan in the United States that you cannot refinance when interest rates go down,” Bill Clinton said, speaking at a recent campaign rally at Los Angeles Trade-Technical College.

We wondered: Is refinancing really off-limits for all college loans? With student loan debt such a big issue this election year, we decided to check the facts.

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

Past efforts at change

Both Hillary Clinton and Vermont Sen. Bernie Sanders, her rival for the Democratic presidential nomination, have pledged to allow student loans to be refinanced.

But they weren’t the first to call for this change.

In June 2014, Senate Republicans rejected legislation by Sen. Elizabeth Warren, D-Mass., that would have let student borrowers refinance their federal loan debt.

“Homeowners are refinancing. Small businesses are refinancing. We just want young people who got an education to have their shot,” Warren was quoted as saying in a Washington Post news article at the time.

Republicans said they were not convinced the legislation would have resulted in lower borrowing costs, and labeled it an election stunt.

The bill would have let people with federal and private loans issued prior to 2010 refinance at 3.86 percent, the article said.

It added that the Obama administration estimated that the bill could have helped 25 million borrowers save $2,000 each over the lifetime of their loans, or $50 billion.

Former President Bill Clinton speaks during a campaign stop for his wife, Democratic presidential candidate Hillary Clinton, Tuesday, Feb. 16, 2016, at the West End Community Development Center in Greenville, S.C. (AP Photo/Paul Sancya)

Our research

As they’ve campaigned across the country, Hillary Clinton and Sen. Sanders have each pledged to allow for refinancing of college loan debt.

What they, and apparently Bill Clinton, are talking about is refinancing federally backed student loans, which account for about 90 percent of all student borrowing.

We turned to the nonprofit college planning group American Student Assistance for some advice. They and other groups say federal student loans can be refinanced into private loans. But doing so can remove federal protections such as fixed interest rates and the ability to pause repayments.

Also, private student loans can be refinanced into new lower-interest private loans.

But there’s no provision in federal law allowing the refinancing of a federal loan to another, lower-interest federal loan.

“There is no federal refinancing. Congress sets the interest rate for federal student loans, and most of these rates are fixed by law, no matter how solid your credit or income becomes post-graduation,” American Student Assistance advises potential borrowers.

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

PolitiFact Texas examined a similar claim in 2014 and rated it Mostly True.

They spoke with Heather Jarvis, a North Carolina attorney specializing in student loan law, who told them some graduates may be able to refinance student loans at lower rates through private lenders. But, she said, this would only happen in cases in which borrowers have substantial income.

Jarvis added that “refinancing federal loans with a private loan is risky.  The borrower gives up important protections that accompany federal loans (like flexible repayment and discharge provisions).”

Students repaying federally backed loans, Jarvis said, are effectively barred from refinancing opportunities because federal law makes no provision for the government to make such offers.

Asked about the former president’s statement, Bill Clinton’s press secretary said in an email “it’s very safe to say that the vast majority of students with debt have federal debt.” She pointed to statistics from the College Board showing federal loans account for about 90 percent of student borrowing. She said a small percentage of borrowers can refinance a federal student loan by making it a private loan.

Our ruling

Former President Bill Clinton said at a recent campaign rally in Los Angeles: “A college loan is the only loan in the United States that you cannot refinance when interest rates go down.”

Borrowers of federally backed student loans, which account for about 90 percent of student loans, cannot refinance those into lower-interest federal loans. Congress sets the interest rate on these loans, and there’s no provision in federal law that allows for them to be refinanced. Depending on factors such as income, some borrowers can refinance their federal loans into lower-interest private loans, though they risk losing their federal loan protections.

Clinton most likely was referring only to federally backed loans when he made his statement, but a clarification about private loans would have helped.

Call 855-580-NEST (6378) if you want to be considered for loan forgiveness.

Source

Judge Says Bankrupt Law Grads Can Cancel Bar Loans

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A federal judge ruled law-school graduates who file for bankruptcy protection can cancel the debt they racked up while studying for the bar exam, finding such loans are different from traditional federal student loans that are rarely canceled by bankruptcy.
In an opinion filed Thursday, Judge Carla Craig of the U.S. Bankruptcy Court in Brooklyn, N.Y., said bar-exam loan debt is “a product of an arm’s-length agreement on commercial terms” and doesn’t fall into the category of student loans that stick with a borrower who files for bankruptcy.
The decision, which is the most thorough recent ruling on the matter, contradicts the widely accepted notion that student loan-related debt can be canceled in bankruptcy only under rare cases of extreme financial hardship.
In her 20-page ruling, Judge Craig said bar-study loans were akin to commercial or consumer loans and weren’t an “educational benefit,” like a scholarship or stipend, and thus could be erased in a bankruptcy case.
The case involves 36-year-old Lesley Campbell, a 2009 Pace University School of Law graduate who had asked the court to cancel the unpaid portion of a $15,000 loan she took out from Citibank to study for the bar.
Ms. Campbell, a Brooklyn resident, didn’t pass the bar exam after graduating in 2009 and took a secretarial job with a $49,000 annual salary at a hotel management company, she said. She filed for bankruptcy in 2014.
Although her bar-study loan was only a small portion of Ms. Campbell’s nearly $300,000 student loan debt, the ruling comes at a time when consumer advocacy groups and some federal lawmakers are pushing for students to be able to use bankruptcy to get at least some relief.
The U.S. Supreme Court recently declined to hear a case that could have made it easier to get rid of student loan debt. The White House, however, said last year that it would examine whether it should be easier for student loans to be canceled by bankruptcy, opening the door for student debt made by private lenders to be treated on par with credit-card debt and mortgages.
“We’re starting to chip away at the absolute immunity of student loans from bankruptcy,” said Austin Smith, Ms. Campbell’s lawyer.
A Citibank lawyer declined to comment on the ruling or to say whether the bank plans to appeal.
Judge Craig’s ruling isn’t binding on other courts but may be helpful to other bankruptcy judges with similar disputes before them.
Judge Craig isn’t the first federal judge to take up the issue of whether bar-study loans can be wiped out in bankruptcy. Her ruling conflicts with an April 2010 decision from Alabama Bankruptcy Judge Jack Caddell, who said a University of Alabama School of Law graduate couldn’t cancel a $9,475 bar-study loan.
Bankruptcy judges have historically had a “reflexive, knee-jerk reaction that if anything like a student loan, it’s nondischargeable,” said John Rao of the National Consumer Law Center.
“Judges are now starting to take a closer look,” he said.
The ruling comes as total student debt has more than doubled since 2007.
“We’ve come to a place where student loan debtors are very much backed into a corner,” said Greta LaMountain Biagi, a bankruptcy lawyer in Amherst, Mass. “This judge clearly to me understands that and is in touch with that.”
Several major lenders, including Wells Fargo & Co., PNC Financial Services Group Inc., Discover Financial Services Inc. and Sallie Mae Inc., offer bar-exam loans typically of up to $15,000 to pay for a law-school student’s time after graduation—a period when many study for the bar exam but haven’t begun working in the field yet.
They are similar to medical students who have access to residency and relocation loans, said Mark Kantrowitz, a Chicago-based publisher at Cappex.com, a website that connects students with colleges and scholarships.
“They’re low-risk for the lender because you know the individual has already received their degree. They just have to pass the bar or their medical boards,” he said.
Ms. Campbell has a new job as a legal document reviewer and plans to retake the bar exam in February. She said she is current on student loan payments.

Help Is On The Way For Student Loan Debt

By | Student Loans | No Comments

 

A number of American college students believe a college degree is absolutely necessary in order gain successful employment and financial stability for the present and into the future. The reality, however is that numerous college graduates can’t find a good job and end are faced with an overwhelming student debt. More than 10 million are crippled by significant student debt and numbers continue to escalate to approximately 1.3 trillion dollars.

The hopeful news for students now facing this crisis comes in new laws that have caused some to challenge their college and universities with failure to live up to their promises of success. The University of Phoenix, owned by the Apollo Group, was targeted in July of 2015 by the FTC. They face a Civil Investigation that will determine if the college participated in deceptive advertising, marketing or sales claims.
Use this number (855) 500-9007 to receive information and automatic and free Approval toward the Student Loan Forgiveness and Reduction of Payment Programs being offered.

With the spiraling increase in student loan and high unemployment rates in the United States, experts are concerned. Though the unemployment rate has decline over the years to 7.2 percent in 2015, statistics reveal that unemployment among young college grads is also 7.2%. This indicates students with college degrees have the same unemployment as non graduates. In fact, the Washington Post revealed through their investigation of this matter, that Phoenix University graduates had a higher rate of unemployment.

Statistical Data of Labor Force and Present Population.
The new law which is titled 34 CFR 685.206 (c), states that individuals with student debt might qualify for a reduced or complete tuition refund or entitled to exemption status on loan repayment if they face an extended period of unemployment following graduation.
If the defense against repayment is successful, the secretary tells the borrower that he is relieved of the requirement to repay all fees that the borrower would otherwise be obligated to pay,” the law reads. “The secretary extends the borrower such relief as the secretary decides is appropriate in the situation.

This number (855) 500-9007 can lead you to receive information and automatic free Approval toward the Student Loan Forgiveness and Reduction of Payment Programs being offered.

Court trials regarding student debt are not the only indication that assistance might be on its way for those that suffer from student loan debt. Many politicians, State representatives, and the President himself have spoken about the importance of creating an affordable college opportunity for every young American.
One of the programs that the Obama Administration put forth in December was a Bill that allowed student loan borrowers with deficient income to apply for forgiveness of debt or to Pay as you Earn.

President Obama declared that we needed to “make college affordable” to all Americans. He went on to state that hardworking individuals should not have to go in major debt. Consequently, the initial step was to reduce a student loan payment to a 10 percent amount of the borrower’s income. Additionally, he wants to reduce the cost.

 

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