Here’s Why The Student Loan Market Is Completely Insane – Businessweek

Senate Republicans block consideration of student loan bill – CBS News

But the administrations efforts dont address a more fundamental problem: These loans arent calibrated for risk. In other words, students from Harvard and less-prestigious regional colleges are thrown in the same bucket, despite quite different risk profiles. Under Federal Deposit Insurance Corporation (FDIC) rules governing the insurance of banks, lenders cant differentiate among schools in assessing credit risk as they do with home buyers and car owners. As a result, the government has made it difficult for banks to price to default rates, says Mike Cagney, founder of Social Finance, a socially based student lending operation known informally as SoFi. By accepting FDIC insurance, banks lose pricing flexibility and cant charge interest rates commensurate with the quality of schoolsand default rates vary widely by schools. SoFi has funded more than $650 million in loans to 7,000 borrowers since its founding in 2011. Says Cagney: The definition of a predatory lender is someone who pushes loans on an individual who cant afford to pay them back.Under that definition, many of the educational loans made today could be considered predatory. Despite other economic recoveries, including lower delinquency rates in every other type of loan (housing, auto, credit card), the problem in the student loan market is definitely getting worse. In the past few years, default rates have increased every single year: But these averages come from awidedisparity in the types of colleges people go to. For example, default rates at such places as Stanford, Duke, Carnegie Mellon, MIT, and Yale are all less than 2 percent. Not surprisingly, graduates from these schools command high salaries in the job market.
Puedes ver la version sin traducir en http://www.businessweek.com/articles/2014-06-11/heres-why-the-student-loan-market-is-completely-insane

Victim Spreads Word on Payday Loan Scam, Don’t Be Next – ABC News

PHOTO: In this stock image, a person is seen withdrawing cash from an ATM machine.

If youre a student, good luck. Casting an eye toward the midterm elections, Obama also told parents and students to watch how senators vote on the bill and urged consequences for irresponsible behavior. I want Americans to pay attention to see where their lawmakers priorities lie here, Obama said. Lower tax bills for millionaires or lower student-loan bills for the middle class. This should be a no-brainer. Sen. Lamar Alexander (R-Tenn.), who opposes the Warren bill, said in an interview that Obama and congressional Democrats are playing politics with the issue. Alexander said he wants bipartisan cooperation on the issue, pointing to a bill proposed last year that would cap interest rates at 8.25 percent. Alexander said he thinks that the Democratic bill would amount to a taxpayer subsidy of individual student loan debt. He compared the average graduates debt level of $27,000 to the price of a car. Its the best investment that a persons ever likely to make, Alexander said. They dont think twice about it when they buy a car and the car depreciates the day you drive it off the dealership. In other steps, Obama ordered the Education Department to renegotiate its contract with loan providers so they will give financial incentives to borrowers who pay their loans on time.
Puedes ver la version sin traducir en http://www.washingtonpost.com/politics/obama-extends-caps-on-student-loan-payments-to-about-5-million-people/2014/06/09/10a6ab20-efe4-11e3-9ebc-2ee6f81ed217_story.html

I asked them why they couldnt just deposit the loan money into my bank account, but the lending representative said it was against federal regulations. So, I got the card and scratched off the number on the back and read it to him over the phone. He said the funds would be available in a half-hour. Twenty minutes later, he called back and said my Social Security number was red-flagged and the money couldnt be sent. He said he could remove the red flag for $500 a figure that their lawyer later lowered to $203. At that point, I said I wanted my $195 back, but then they threatened to sue me for the balance of the loan — a loan I never received. I realize now this was a scam, and I have closed my bank account. They probably have done this to many other unsuspecting victims who are just trying to make ends meet. – Kevin Whitney, Philadelphia, Penn.
Puedes ver la version sin traducir en http://abcnews.go.com/Blotter/victim-spreads-word-payday-loan-scam-dont/story?id=24076648

Obama extends caps on student loan payments to about 5 million people – The Washington Post

Does it work for those who can hire armies of lobbyists to make sure that every single loophole in the tax code is protected for them? Or does it work for young people who are trying to get started in life?” But Republicans called the bill a “political stunt” that would do nothing to help future students. “The Senate Democrats’ bill really isn’t about students at all, its really all about Senate Democrats, because Senate Democrats don’t actually want a solution for their students, they want an issue to campaign on to save their own hides this November,” said Senate Minority Leader Mitch McConnell, R-Ky. McConnell and Sen. Lamar Alexander, R-Tenn., the top Republican on the Committee on Health, Education, Labor and Pensions, both said it also fails to address the root of the problem. “This is not a serious proposal. It’s not going to help people. College graduates don’t need a dollar a day tax subsidy to pay off their loan. They need a job…and they’re experiencing right now the worst situation for finding a job that they’ve seen in a long, long time,” Alexander said. Senate Majority Leader Harry Reid, D-Nev., however, said that the mounting student loan burden – more than $1 trillion across the economy – prevents college graduates from being able to otherwise move on with their lives by getting married or purchasing homes.
Puedes ver la version sin traducir en http://www.cbsnews.com/news/senate-republicans-block-consideration-of-student-loan-bill/

Student loan debate gets edgier

Verifying your credentials… We’re experiencing a few technical issues. Try again By submitting you agree to our Terms of Service Your Take contributions have not been reviewed for accuracy by USATODAY. Contributors agree to our Terms of Service and are responsible for the content of their videos and photos. Please report any content that violates the terms. Let friends in your social network know what you contributed on Your Take Post to Facebook Something went wrong. Try again. This contribution is a part of: Student loan debate gets edgier http://usat.ly/1pNDJBI CancelSend A link has been sent to your friend’s email address. This story is part of Barack Obama Mary Beth Marklein, USA TODAY 4:02 p.m.
Puedes ver la version sin traducir en http://www.usatoday.com/story/news/nation/2014/06/12/student-loan-debt-and-college-costs/10281691/

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