Loan debt – Visio Pale http://visiopale.com/ Wed, 10 Aug 2022 19:08:32 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://visiopale.com/wp-content/uploads/2021/11/profile-100x100.png Loan debt – Visio Pale http://visiopale.com/ 32 32 Student loan collection system too tough, Education Ministry official says https://visiopale.com/student-loan-collection-system-too-tough-education-ministry-official-says/ Wed, 10 Aug 2022 10:06:00 +0000 https://visiopale.com/student-loan-collection-system-too-tough-education-ministry-official-says/ Failure to pay your student loans could lead to the federal government withholding your salary, tax refunds and possibly Social Security earnings — a process that is both brutal and punitive, a government official said. “Even if you were a hard-nosed accountant who only cared about raising money for taxpayers, it makes no sense to […]]]>

Failure to pay your student loans could lead to the federal government withholding your salary, tax refunds and possibly Social Security earnings — a process that is both brutal and punitive, a government official said.

“Even if you were a hard-nosed accountant who only cared about raising money for taxpayers, it makes no sense to try to collect a loan by plunging borrowers into poverty and preventing them from recovering. on foot,” said James Kvaal, undersecretary of the Department of Education. said in his opening remarks at a virtual panel hosted by the Student Borrower Protection Center.

“There are lives at stake here,” he added.

According to Kvaal, more than 7.5 million student borrowers, or one in six borrowers, were in default before the pandemic. In fact, before the pandemic-era payment pause began, Kvaal said, one million debtors defaulted for the first time every year.

“There really isn’t anything good that comes out of student loan defaults except for debt collectors… any defaults only drive borrowers who are already facing financial difficulties into an even deeper hole” , Kvaal said.

Failure to pay can have far-reaching effects on a borrower’s life. Along with having their wages garnished, Social Security checks garnished and tax refunds withheld, borrowers can take a hit to their credit scores — “raising the cost of every financial product,” Kvaal said.

“The consequences of defaulting are so punitive, it’s as if whoever designed these policies is assuming that borrowers are somehow trying to beat the system,” he added. “Defaulting your student loan is about the furthest thing from a get-rich-quick scheme. It’s more like a program to hold debt forever.

Related: Here’s what government intervention has done to Americans’ credit scores

The Biden administration has repeatedly extended the student loan collection pause decreed by the Trump administration in response to the economic impact of the pandemic. This payment break has been a boon for millions of student debtors, according to a new report of the New York Federal Reserve.

Over the past decade, before the payment pause on federal student loans, about 15% of borrowers had delinquent or defaulted loans in 2019. The pause on payments — and debt collection — helped a large swath of the 38 million debtors who hold federal student loans, with the share of borrowers with a delinquent or defaulted loan falling to 7.5% at the end of last year.

Southern debtors had more difficulty with their student loans before the pandemic payment pause.

New York Fed

Before the pandemic, student loan delinquency rates were highest in Mississippi, where 21.6% of borrowers were in arrears, followed by Puerto Rico, at 20.1%, and Louisiana, at 20. %. Southern debtors “had the highest borrower default rates,” the New York Fed added, “claiming ten of the top twelve states.”

The pandemic pause on collections, along with the new ability for borrowers to rehabilitate defaulted loans, has cut delinquency rates in half.

The Biden administration approved nearly $28 billion in debt relief for 1.4 million student borrowers, Kvaal said. “More borrowers are qualifying every day,” he added, “and we will continue to work hard to ensure that all who qualify get the relief they are entitled to.”

The administration is also trying to make it easier for defaulting student borrowers to find a way out of their financial hole. The Department for Education announced in April that it would give defaulting student debtors a “fresh start” by restoring their loans to their current state to give them a better chance of repayment.

“Overall, borrowers who default on their loans are people who have been let down by lagging policies and investments in college affordability,” Kvaal said. “They provide the most compelling evidence that the student loan system needs fundamental change.”

“Failure to repay a student loan shouldn’t be a life sentence of financial struggle and despair,” he added.

Read more: Borrowers on edge – will Biden cancel student debt or not? Here’s what happens.

See also: Canceling student loans will help narrow America’s racial wealth gap, new report says, but others call it ‘costly and ineffective’

Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com.

Learn how to shake up your financial routine at Best New Ideas in Money Festival September 21 and 22 in New York. Join Carrie Schwab, President of the Charles Schwab Foundation.

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Teacher can’t afford to retire with $155,000 student loan debt https://visiopale.com/teacher-cant-afford-to-retire-with-155000-student-loan-debt/ Sat, 06 Aug 2022 23:20:13 +0000 https://visiopale.com/teacher-cant-afford-to-retire-with-155000-student-loan-debt/ Lori Harrell owes $155,000 in student debt. After a 20-year career as a teacher, she doesn’t know how she will be able to afford to retire. She was turned down by two federal teacher loan forgiveness programs. Loading Something is loading. Lori Harrell, 60, is a teacher and has a bachelor’s degree in education as […]]]>
  • Lori Harrell owes $155,000 in student debt.
  • After a 20-year career as a teacher, she doesn’t know how she will be able to afford to retire.
  • She was turned down by two federal teacher loan forgiveness programs.

Lori Harrell, 60, is a teacher and has a bachelor’s degree in education as well as two master’s degrees – but she advised her son not to go to college.

“When I was coming, the parents were saying either you go to school or get a job, so I went to school,” she told Insider. “The advice I gave him was that you don’t really need to go to school unless you know exactly what you want to do.”

Harrell, who was a public school teacher in New York for more than 20 years, is nearing retirement. But with $155,000 in student loan debt, she doesn’t know how she can afford to go through with it.

Currently, she works as a special education teacher at the Wyoming Correctional Facility in Attica, where she has worked for four years. Previously, she taught special education classes for middle and high school students, but switched to a government job in order to have a better pension and benefits like health insurance when she retires.

But even though she has been planning to retire for the past few years, her debt remains a £155,000 elephant in the room. A few years ago, it consolidated its mix of federal and private loans. She also started an income-based repayment plan, which determined how much she owed per month based on her salary. She paid about $300 a month before the student loan payment break at the start of the pandemic. These payments mostly went towards interest and barely changed his principal amount.

Many Americans are going through the same thing as Harrell, having to adjust their retirement, housing and healthcare plans based on their total student debt. Those eligible for a civil service pardon like Harrell often have high hopes of relief after 20 years of payments, but face prohibitive bureaucratic hurdles or are turned away outright.

“I’m at the point where I’m going to retire in two years, and I don’t know how I’m going to get out of this,” Harrell said. “I will die with this debt.”

“Retirees should not have student debt”

Harrell said she had struggled to cope with her debt over the past few decades – and the loans themselves were prohibitive.

“When I was raising my son as a single parent, it was all about taking care of the rent, the food, him, his activities and that kind of stuff,” she said. “It never got to the point where I couldn’t feed him or myself, but it was tough.”

Harrell never defaulted on her loans, she said, but she was often late. Borrowers seeking income-based repayment, which is almost exclusively available to people with federal debt, often report that the monthly payment amount offered by loan companies is unrealistic.

Early in her career, Harrell said, student loan companies estimated her salary — which determined her monthly payments — was $30,000 more than she actually earned. Now, decades later, she still doesn’t earn that amount.

Harrell was among those deemed ineligible for a pardon through the Teacher loan forgiveness program, because it has had student loans since 1979, outside of the initial eligibility window of 1998.

She was also denied the cancellation of civil service loans by the federal government. Prior to the Biden administration, 98% of borrowers who applied for the PSLF were turned down due to paperwork errors and poor management of the program by the student loan company. For this reason, the Department of Education has announced reforms to the program, including a waiver until October 31, 2022 that allows all previous payments, including those previously deemed ineligible, to be considered in the loan cancellation progress.

Harrell applied again a few months ago once the Biden administration rolled out its reforms, but has yet to hear back.

In the meantime, she said she was considering selling assets that belonged to her mother, who died a few years ago, in order to meet her debt.

Debt “is going to be a problem when I have reduced income,” she said of retirement. “I’m thinking of selling the house…and that will be part of my plan in the next couple of years.”

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Education Department plans to write off student loan debt for millions: report https://visiopale.com/education-department-plans-to-write-off-student-loan-debt-for-millions-report/ Fri, 05 Aug 2022 14:48:00 +0000 https://visiopale.com/education-department-plans-to-write-off-student-loan-debt-for-millions-report/ The federal Department of Education has drawn up detailed plans to cancel student loan debt for millions of Americans if President Joe Biden gives his approval, according to a Politico report. The Biden administration has been considering for months how to write off student loan debt. More recently, Biden said he expects to make a […]]]>

The federal Department of Education has drawn up detailed plans to cancel student loan debt for millions of Americans if President Joe Biden gives his approval, according to a Politico report.

The Biden administration has been considering for months how to write off student loan debt. More recently, Biden said he expects to make a decision on that by the end of August. This is also when the current pause on federal student loan payments is expected to end.

Documents obtained by Politico detail the mechanics of how the Department of Education plans to manage and operate a massive debt cancellation program that would be unprecedented, the website said.

Officials are prepared to automatically provide debt relief to millions of borrowers for whom the agency already has income information, Politico said. Others would apply via an online form to certify that they are entitled to relief.

The department’s plan says all types of federal student loans would be eligible for forgiveness, including Grad and Parent PLUS loans as well as federal loans held by private entities, according to Politico. The plans also suggest that borrowers who have received Pell grants could qualify for an additional discount.

The Biden administration plans to provide $10,000 in relief per borrower, Politico said.

Ministry documents do not include any final decision on how a relief program would be structured. According to Politico, there are no details on the final amount of relief or the income limits of the potential program.

Officials are considering limiting the forgiveness to borrowers with incomes below a certain income level, but no amount has been finalized, Politico said. An internal departmental presentation cited $125,000 for individuals and $250,000 for families as examples of possible thresholds.

You can find out more about the plans of the department on the Politico website.

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Morning Brief: Student Loan Debt History, Monkeypox Vaccine Supply, LAist Readers Remember Vin Scully https://visiopale.com/morning-brief-student-loan-debt-history-monkeypox-vaccine-supply-laist-readers-remember-vin-scully/ Thu, 04 Aug 2022 13:30:00 +0000 https://visiopale.com/morning-brief-student-loan-debt-history-monkeypox-vaccine-supply-laist-readers-remember-vin-scully/ Start your day with LAist Sign up for the Morning Brief, delivered on weekdays. gHello the Today is Thursday August 4th. If I told you how much student debt I have, you would cry beside me. Yes, it is SO BAD, my friends. I am grateful that I was able to pay for my undergraduate […]]]>

gHello the Today is Thursday August 4th.

If I told you how much student debt I have, you would cry beside me. Yes, it is SO BAD, my friends. I am grateful that I was able to pay for my undergraduate education through a Pell grant and a grant for low-income students. But then came the doctoral school.

After three years of working as a teacher, I wanted to return to journalism and report on the problems I witnessed inside schools. I thought the best step for a young first-generation graduate, who is also a black woman, was to go to college. I had no connection with the media. Why not apply to the best schools that would give me a leg up in this society?

I did my graduate studies and I excelled. I am where I am because of my experience in higher education. But I took thousands of dollars to pay for it. Now I owe MORE than I originally owed because of accrued interest.

I’m not alone.

My colleague Julia Barajas’ in-depth article on the history of student debt is a MUST-READ. She writes about the idea that’s been put in our heads that college is THE path to economic mobility for working-class families, and how it’s driven so many to rack up massive debt for the good of society. ‘Higher Education.

As many of us have pursued this dream over the years, Julia reports that other factors have come into play that have contributed to increasing the cost of higher education – and the challenges of paying for it. For example, the average cost of tuition has increased 130% since 1990, but grants and other federal aid have failed to keep up with rising costs. Then, during the Great Recession, when so many students couldn’t find jobs after college, student loan debt soared from $772 billion to $1.6 trillion.

Did you know that long ago, California’s public university system was essentially free? This ended under Governor Ronald Reagan. Today, Californians owe about $142 billion in student debt.

Julia interviewed several Angelenos who took out loans to pay for their college education.

I identify so much with David Madina, a veteran teacher from Pico Rivera. Madina told Julia that even though he received better financial aid at Whittier College than his other first choice, UCLA, he still had to take out loans.

About the morning brief

  • The Morning Brief newsletter is sent in the morning from Monday to Friday. Subscribe to receive it in your inbox.

He didn’t even hesitate to do so. Why?

“My generation was told that was the plan: you go to college because your parents didn’t,” he said. “I just figured out that you take out loans for cars, houses, and school, and that’s what you do, that’s how you get by.”

All I knew growing up was that I had privileges that my parents didn’t. They put food in my stomach, clothes on my back and a roof over my head… took care of everything so I could stay FOCUSED in school and do better than them. I had to do it.

Just like Madina, I bit the prize bullet and went for it.

And now, on the other side, with more than six figures in debt to my name, I just hope I don’t become a 91-year-old lady with over $300,000 in student debt to my name.

As always, stay happy and healthy, friends. There’s more news below the fold.

What else you need to know today

Before you go…A brief walk down memory lane with Vin Scully

Los Angeles Dodgers broadcaster Vin Scully waves to the crowd after singing Take Me Out to the Ball Game during the seventh inning of the game with the Colorado Rockies at Dodger Stadium on September 24, 2016.

(Stephen Dun

/

Getty Images)

For today’s journey in our time machine, we remember Wine Scullythe beloved and legendary Dodgers broadcaster died Tuesday at age 94.

Scully followed the team from Brooklyn to LA in 1958, and the rest became history. We asked you for your memories and it’s what some of you shared:

Kelly R.. remembered walking through the neighborhood on a hot summer evening:“As I walked past houses with open windows hoping for a cool breeze, I could hear Vin Scully’s voice passing through each one. The whole neighborhood listened to the voice of the Dodgers.

Eric S. reflected on a time when he was “lucky” to get club-level seats for a Dodgers game in 2000, and he REALLY wanted Scully’s autograph.

“He passed me about 100 feet before I started running towards him shouting, ”Mr. Scully! Mr. Scully! He stopped and I asked him to sign my glove. He complied without flinching. We spoke briefly and I told him that I was teaching my 1 year old son to say “Vin Scully” and that I hoped that would be his first words. He was so humble that he almost seemed shy about it. I’ve never met a more humble or nice celebrity in my entire life, and being from LA, we tend to see a lot of celebrities.

Leonard G. savored this moment:

“My grandma was such a huge fan and watched religiously. I remember there were some weird road games over the years that weren’t shown on TV. Instead, during a commercial break on KTTV, Vin was reading a short pre-recorded score with a big Farmer John logo in the background and he was letting us all know if the Dodgers won or lost that day.As you couldn’t rewind or check the scores of your phone at that time, my grandmother, with very few words possible, silenced anyone who prevented her from getting the brief, to STFU as fast as possible 🤣 And if you didn’t, you better for hearing the score of course to report back to him. Thanks for the memories, Vin. 💙

Help us cover your community

  • Ever wanted to know something about Southern California and the people who call it home? Is there an issue you want us to cover? Ask us anything.

  • Got a news tip we should dig deeper into? Let us know.

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Whoopi Goldberg panics over student debt burden: ‘People can’t get gas, they can’t buy food’ https://visiopale.com/whoopi-goldberg-panics-over-student-debt-burden-people-cant-get-gas-they-cant-buy-food/ Tue, 02 Aug 2022 19:09:06 +0000 https://visiopale.com/whoopi-goldberg-panics-over-student-debt-burden-people-cant-get-gas-they-cant-buy-food/ NEWYou can now listen to Fox News articles! On Tuesday, hosts of ABC’s “The View” called for some form of student loan forgiveness, and co-host Whoopi Goldberg said the government should scrap student loan interest rates, criticizing the burden it places on Americans. Goldberg noted earlier in the segment a report from New York Magazine, […]]]>

NEWYou can now listen to Fox News articles!

On Tuesday, hosts of ABC’s “The View” called for some form of student loan forgiveness, and co-host Whoopi Goldberg said the government should scrap student loan interest rates, criticizing the burden it places on Americans.

Goldberg noted earlier in the segment a report from New York Magazine, which highlighted those who were still repaying their student loans “well before retirement age.”

“How is it possible that college can have such a high price tag? Because we’re always talking about looking out for older Americans. It affects Americans who have this student debt. It doesn’t matter what your background or what, you know, if you’re rich or if you’re poor. It doesn’t matter, if you have student debt, it goes with you to the grave,” she said.

Goldberg said a person should be born with the “gift of higher learning” if they so choose.

Whoopi Goldberg calls for student loan forgiveness on “The View.”
(Screenshot/ABC/The View)

ON ‘THE VIEW,’ ALYSSA FARAH GRIFFIN REJECTS THE NOTION THAT SHE ‘DISN’T DESERVE A VOTE’ AFTER SERVING TRUMP’S ADMINISTRATOR

“These interest rates are worse than the bookmakers in my neighborhood. I mean, what is it?” said co-host Joy Behar. “You know, it’s really outrageous. I do believe though that if we’re not going to go with your plan, which is my favorite, everyone’s guaranteed, I think we have to target it a bit. Who’s going to get the loan and who’s going to pay it back? If you’re going to work for Doctors Without Borders, if you’re going to be a social worker or a teacher, or something like that, yes, then I’m happy for it. But I don’t think it’s generalized, frankly.

Goldberg later noted the case of an older woman who was still paying off her college debt and said it was shameful.

“In 1983, at age 52, Betty Ann enrolled in NYU law school. She borrowed $29,000 in federal loans. She now owes over $229,000. She’s 91, she sold the her family’s furniture to pay off her loan, wonders if without the debt she could have stayed in a house she once owned. Listen, it’s the debts you have to forgive. Because the people who are out there in the 70s and 80s maybe not making the same money they made in their 50s and 60s, you have to forgive that, it’s ridiculous,” she said.

"View" the hosts demand the cancellation of the student debt.

The hosts of “The View” are asking for the cancellation of student debt.
(Screenshot/ABC/The View)

‘THE VIEW’ HOSTS CLOSE CLAIM ‘THE RED WAVE IS COMING’: ‘YOU DON’T KNOW’

Co-host Sunny Hostin said Biden could forgive an additional $300 billion to $350 billion in student loans and that he has already forgiven $25 billion in student loans. Goldberg said seniors need their loans canceled.

“You talk, people can’t have gas, they can’t buy food, they can’t send their kids to any kind of college, it’s because they’re paying off these terrible debts. of students,” she said. “Just consider this, get rid of interest. Let people pay back what they borrowed and let us go from there.”

President Joe Biden, March 31, 2022.

President Joe Biden, March 31, 2022.
(Reuters/Kevin Lamarque/File Photo)

CLICK HERE TO GET THE FOX NEWS APP

The Washington Post editorial board said the president’s latest plan for student loans, which among other things seeks to forgive $10,000 per borrower, “would still be a costly and unfair blow to the election year.”

The federal pause on student loan repayments is set to expire at the end of August.

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New Zealanders Abroad Face Rising Student Debt https://visiopale.com/new-zealanders-abroad-face-rising-student-debt/ Sat, 30 Jul 2022 17:00:00 +0000 https://visiopale.com/new-zealanders-abroad-face-rising-student-debt/ According to Sam Blackmore, co-vice-president of the Union of Student Associations, the approximately 77,500 people abroad who are behind on student loan payments should be offered more incentives to return home. Delinquent debtors owed just under $1.9 billion in overdue repayments and penalty interest at the end of June, and Inland Revenue Te Tari Take […]]]>

According to Sam Blackmore, co-vice-president of the Union of Student Associations, the approximately 77,500 people abroad who are behind on student loan payments should be offered more incentives to return home.

Delinquent debtors owed just under $1.9 billion in overdue repayments and penalty interest at the end of June, and Inland Revenue Te Tari Take believes it knows where less than half is, according to data published under the Official Information Act.

But their debts are increasing as late payment interest is added at the rate of 6.8% on the unpaid portion of their loans, and the threat of arrest at the border remains in place.

“I don’t blame them for not coming back,” Blackmore said.

READ MORE:
* Student Loan Arrest: When Are Debtors Arrested and What Happens Next?
* Woman arrested at Auckland International Airport over student loan debt
* Inland Revenue loses track of thousands of Kiwi student loan debtors in Australia

With labor shortages in many industries, Blackmore said he wants the government to rethink its attitude towards failing overseas students.

“The stupid thing is that they cut off their noses to spite their faces,” he said.

“If we allowed these people to come back into the country, they would contribute to taxation, productivity and development.”

ROBERT KITCHIN/STUFF

Green Party Higher Education Spokesperson Chloe Swarbrick reveals the findings of the popular survey of student wellbeing to the media.

A package to encourage more people to return would include an agreement to clear their backlogs, he said.

“You agree to come back, you sign your form, you agree to work for five years, or whatever, and off you go,” Blackmore said.

Revenue Minister David Parker said the Inland Revenue (IR) Commissioner may already be offering relief to overseas-based borrowers, which could include waiving some or all of the added late payment interest to their loans.

Arrears have accumulated because people who go abroad with debt are obligated to make annual repayments, but must take active steps to make those payments.

People with student loans who stay in the country have their repayments automatically deducted from their salaries.

Just under three quarters of foreign student loan debtors are in arrears, information from StudyLink and IR.

While 10% of student loan debtors in New Zealand owe $50,000 or more, 20% of foreign borrowers owe that amount.

The 10 largest foreign student loan debtors owe an average of $474,000, an IR spokesperson said.

When people leave the country, they have a legal duty to keep IR informed of their contact details, but Parker said he was “aware that collecting student loans from borrowers overseas and maintaining contact with these borrowers are difficult”.

IR did not know the whereabouts of 43,071 foreign debtors with combined arrears of $1.13 billion.

Its records show that at least 29,366 borrowers in arrears were in Australia, with combined arrears of $610 million.

While penalty interest continued to mount, border arrests were rare and IR said only 13 people had been arrested for overdue student debts in the past eight years, with just one this year and two in each of the past two years.

IR was alerted when an overseas-based borrower returned to the country and attempted to contact them while they were there, Parker said.

Revenue Minister David Parker said people in student loan arrears can ask the Inland Revenue to waive some of their penalty interest.

ROBERT KITCHIN/Stuff

Revenue Minister David Parker said people in student loan arrears can ask the Inland Revenue to waive some of their penalty interest.

“Arrest is a measure of last resort and comes when returnees fail to engage with the department while they are here,” he said.

IR had to apply to the courts for an arrest warrant, and a border stop could only take place when he believed they were about to leave the country, he said.

Blackmore said the small number of arrests seemed to indicate a decision had been made not to arrest people at the border as it would create bad publicity.

The Inland Revenue knows of 1714 people in student loan arrears who live in the UK.  They have combined arrears of $40 million.

PA

The Inland Revenue knows of 1714 people in student loan arrears who live in the UK. They have combined arrears of $40 million.

Blackmore said he understands the forgiveness of loan arrears for returning debtors might not sit well with everyone.

“If we do any debt forgiveness, there will always be a disgruntled population, who will feel like they missed something,” he said.

He also called for new rules extending the time people with student loans could spend abroad without triggering overseas repayment obligations from 185 days to 12 months or even two years.

“We want people to be able to go out, learn, explore and come back,” Blackmore said.

IR planned to intensify its efforts to find debtors abroad.

“Additional work is also planned to locate debtors residing overseas, including those residing in Australia,” the spokesperson said.

He had an information-sharing memorandum of understanding with the Australian Revenue Authority to help find debtors there.

IR had also engaged collection agencies to trace overseas-based debtors and collect arrears.

“Interventions will range from locating customers and helping them get their repayments back on track, to more robust collections activities for those who continue to fail to meet their obligations,” he said.

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If Biden doesn’t cancel student loan debt, Congress should cancel interest https://visiopale.com/if-biden-doesnt-cancel-student-loan-debt-congress-should-cancel-interest/ Fri, 29 Jul 2022 14:30:00 +0000 https://visiopale.com/if-biden-doesnt-cancel-student-loan-debt-congress-should-cancel-interest/ Will he or won’t he? And how much? This is what everyone asked about President Biden and student loan forgiveness. When leaked news that the Biden administration was planning $10,000 in loan forgiveness, many argued that would not go far enough. Still, Biden said he was To not consider cancel everything and wants Congress to […]]]>

Will he or won’t he? And how much? This is what everyone asked about President Biden and student loan forgiveness. When leaked news that the Biden administration was planning $10,000 in loan forgiveness, many argued that would not go far enough. Still, Biden said he was To not consider cancel everything and wants Congress to tackle student debt through legislation.

A legislative proposal temporarily allow those with student loans to refinance them at 0% interest. Congress shouldn’t just adopt this, it should expand it and make it permanent policy.

To make a difference in the college debt crisis, Congress should apply all interest payments already made to each borrower’s principal, fix public loans at a permanent interest rate of 0% in the future, and allow those with private loans to convert their debt into public loans, also at 0% interest.

Our to research suggests that eliminating interest would allow those who graduate from college with student loans to contribute more fully to the economy, achieve financial stability and security, start families, and live fuller, more Happier. Removing interest would mean that people would continue to repay the loans they borrowed, without the government or private companies benefiting.

For many, the interest on their debt creates a situation that looks like quicksand. Often the payments don’t even cover the interest, so when people repay their loans, they see their balances increase.

Setting interest rates at 0% for all public student loans, waiving interest, and applying past interest payments to principal would allow people to pay down their debt. Biden’s $10,000 loan forgiveness would certainly help some of those borrowers as well, but it wouldn’t solve the problem of compound interest on remaining student debt for everyone.

Then there is the 13 percent borrowers who use loans from a private source. Over the past six years, one participant in our research study has paid approximately $1,200 per month on his $105,000 private loan, a total of over $86,000 so far. High interest rates mean they still owe $78,000. Private loan holders should be able to refinance their loans under a zero-interest public loan program. Then, when they make payments, they will see their balances decrease significantly.

Applying all past interest paid to the principal would mean instant loan forgiveness for those who have already repaid far more than they ever borrowed. It would also allow anyone balking at the notion of loan forgiveness to see that many who have loans have paid them back – and more.

We have been studying college graduates’ experiences with loans for more than six years, and this type of cancellation would be a game-changer for them. In the spring of 2016, we interviewed a small number of graduating seniors with loans, and we’ve re-interviewed them almost every year since, following them as they faced student loan repayments, changes employment, to live with their Parents make ends meet and serious health problems.

We also surveyed a larger group of students and graduates and asked them what they would do if their student loans were forgiven. Most told us they would save and invest for the future, buy homes, and pay off medical and credit card debt. Some would marry or have children. In recent interviews, we’ve seen how the pause in student loan repayments has finally helped borrowers achieve some of these goals.

One woman in our study, now in her late 40s, started college at age 18, but was only able to return to complete her education when she was older. Her monthly loan payment of nearly $700 never seemed to make a dent in what she owed, but paying it meant she and her husband couldn’t cover all of their expenses, even though they were all working. two full-time for decades. Overdue bills, borrowing from retirement savings, and mounting credit card debt just looked like it always would. It was not until after the federal student loan hiatus began that she was able to pay off her other debts; she is now up to date with her bills.

But when debt payments resume in just over a month, many young adults in debt will once again fall behind on other payments or have to postpone important milestones, such as buying a home or getting married. , preventing them from fully enjoying the adulthood they thought they would improve by pursuing a college education.

The people we have been following for several years understand that they chose borrow money to pay for his studies. But they did not make this choice lightly. They followed widespread advice to pursue higher education to position themselves for higher-paying jobs. None of them were wealthy and most were first generation students. So they took out loans – often for much larger amounts than previous borrowers needed.

It’s because tuition have increased considerably, and the burden for pay for higher education fell more on individuals and their families as state funding stagnated. Cuts after Great Recession made things worse, and Fiscal issues due to COVID-19 will likely result in further tuition fee increases in the years to come. Previously, college aid came more in the form of subsidiesbut today most people have to fund their college education through ready.

Something must be done to reduce the cost of higher education. Something needs to be done to fix the problem too. $1.75 trillion in existing student debt. The elimination of interest would be a significant step in the right direction.

Our research has clearly shown that canceling student debt – in whole or in part – would have positive effects on individual borrowers, their families, and the economy. Achieving the “American Dream” of earning a college degree cannot come at the expense of family and financial security; otherwise, the dream remains out of reach.

If loans are still necessary for some to get a college degree, removing interest would at least make student debt less insurmountable and less predatory, and allow millions of young adults to begin making meaningful strides toward future stability.

Joan Maya Mazelis is Associate Professor of Sociology and Director of Gender Studies at Rutgers University-Camden. Am here @JoanieMazelis. Arielle Kuperberg is associate professor of sociology and women’s, gender, and sexuality studies at UNC Greensboro and president of the Council on Contemporary Families. Am here @ATKuperberg.

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$55 million in student debt relief on the way for Pennsylvania nurses https://visiopale.com/55-million-in-student-debt-relief-on-the-way-for-pennsylvania-nurses/ Wed, 27 Jul 2022 09:20:00 +0000 https://visiopale.com/55-million-in-student-debt-relief-on-the-way-for-pennsylvania-nurses/ Nurses in Pennsylvania will begin receiving notifications next week about whether they are eligible for a share of the $55 million the state is making available to reduce or erase their student loan debt. The money for Pa. Student Loan Relief Program for Nurses comes from the state’s share of US federal bailout funds. This […]]]>

Nurses in Pennsylvania will begin receiving notifications next week about whether they are eligible for a share of the $55 million the state is making available to reduce or erase their student loan debt.

The money for Pa. Student Loan Relief Program for Nurses comes from the state’s share of US federal bailout funds. This one-time offer will relieve certain state-registered nurses who cared for patients during the COVID-19 pandemic at a Pennsylvania healthcare facility from up to $7,500 in student loan debt.

“Pennsylvania’s healthcare workforce has been overworked and understaffed for years, creating recruitment and retention issues for medical facilities and quality-of-care issues for patients,” said Senator Maria Collett, of the D-Montgomery County, in an email. Collett, a nurse, pitched the idea of ​​nursing loan relief to Governor Tom Wolf last year.

“The program was designed to provide a much-needed boost to nurses who have been on the front lines of the COVID-19 pandemic and help Pennsylvania retain and rebuild its nursing workforce,” it said. she declared.

Nearly 24,000 nurses applied for this loan forgiveness program as the application window closed, according to a spokesperson for the Pennsylvania Higher Education Assistance Agency, which operates the program. This number far exceeded the fund’s ability to provide maximum debt relief to all who requested it.

Accordingly, the agency has designed a selection method to ensure an equitable distribution of funds by geographic region based on the percentage of eligible applicants from each region. It will then randomly select winners from each region.

Once the selections are made, PHEAA spokesman Keith New said the agency will notify the winners and begin the process of verifying their employment. The plan is for the first payments to go directly to the student loan department of nurses selected in August, he said.

This loan forgiveness program was first announced last fall when Governor Tom Wolf made $5 million in federal COVID-19 recovery assistance available. The General Assembly, seeing the high level of interest from nurses soon after the application window opened, passed legislation in January to increase federal funds for the program by $15 million.

The 2022-23 budget agreement adopted earlier this month injected An additional $35 million in federal COVID-19 recovery assistance to this program. Collett said she had fought to increase the pot of money in hopes of enabling “more deserving nurses to benefit”.

The program, which pays up to $2,500 per year for up to three years, is limited to registered nurses, licensed practical nurses, certified registered nurse practitioners, clinical nurse specialists and certified nurse midwives who have started to work by December 31, 2021, at a Pennsylvania facility that provides nursing care directly to patients.

Given the programme’s popularity, Collett said she hopes it “could serve as a model for other areas facing staffing shortages across the Commonwealth”.

Jan Murphy can be reached at jmurphy@pennlive.com. Follow her on Twitter at @JanMurphy

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Student loan debt is another challenge for first-time homebuyers https://visiopale.com/student-loan-debt-is-another-challenge-for-first-time-homebuyers/ Sun, 24 Jul 2022 03:00:51 +0000 https://visiopale.com/student-loan-debt-is-another-challenge-for-first-time-homebuyers/ TEXARKANA — Local mortgage experts say student loan debt is making it harder for young buyers to find good deals in the Texarkana area. With steadily rising mortgage rates, low housing inventory, and high-priced homes already plaguing the market, student loan debt adds to an already long list of hurdles for those trying to purchase […]]]>

TEXARKANA — Local mortgage experts say student loan debt is making it harder for young buyers to find good deals in the Texarkana area.

With steadily rising mortgage rates, low housing inventory, and high-priced homes already plaguing the market, student loan debt adds to an already long list of hurdles for those trying to purchase their home. first house.

Jay Davis, vice president of State Bank and a member of the city council of Texarkana, Texas, said there are three main ways first-time home buyers are affected by student loan debt: It limits the purchasing power, limits the number of homes in their price range and prevents them from qualifying to buy a home.

According to the Federal Reserve, nationally, the average person with federal student loan debt has about $37,000 in debt. The Texas A&M University’s Texas Real Estate Research Center reports that student loan debt can eat up between 3.3% and 10.9% of the average income of a Texas college graduate, making it more difficult to get a job. a home loan or savings for a down payment.

Davis said lenders are required to include a 1% debt payment in calculating a buyer’s monthly debt-to-income ratio, which can reduce a person’s purchasing power by up to 46,000. $.

“In the Texarkana area, we have 98 homes listed under $200,000. If you take that $46,000 buying power off and you take the number of homes listed at $154,000, that reduces the number of houses they could be entitled to 58. That’s 40 houses less,” Davis said.

On average, a household earning $50,000 may need just over two years to save the down payment on a $217,000 home, according to the Texas Real Estate Research Center. However, this rises to six years if the household supports the average student loan payment.

In a 2021 survey by the National Association of Realtors, 60% of non-homeowner millennials (ages 26-41) cited student loan debt as a barrier to buying a home. Two-fifths of millennial homeowners said student loan debt set their home purchases back at least three years.

Debra Moore, senior vice president of Commercial National Bank, said about 15 to 20 percent of first-time home buyers she sees trying to get a home loan are dealing with student debt.

She said many first-time buyers are unaware that additional debt should be included in the debt-to-equity ratio, even if deferred.

“Unfortunately, many homebuyers don’t know what their required payment is once it comes off the deferral, so we have to count 1% of the balance toward the debt-to-equity ratio,” Moore said. “Usually the required payment is lower. So if the home buyer got the required payment amount, it would usually be lower. So we ask them to try to find out what it would be, even if it’s in deferred.”

Davis said most loan programs require the debt-to-income ratio to be below 45%.

“That’s going to come into play whether someone qualifies or not, with that student loan debt.”

Davis said the cost of attending a four-year local institution option like TAMUT is quite low, which reduces some of the student debt for those who stay home and go to school. . The cost of participating in TAMUT is about $18,000 per year, Davis said.

“You envision being able to graduate from A&M-Texarkana for less than $75,000. And that’s if you didn’t qualify for scholarships or something. I think TAMUT did a great job of keeping costs as low as they can for local students. Texarkana College has also done a phenomenal job,” he said.

As the pause on federal student loans ends Aug. 31, Davis said her best advice to a first-time homebuyer with student loan debt would be to contact a mortgage expert and allow them to explain the process.

“There’s so much misinformation on the internet, and there’s so much misinformation, even word of mouth, that a lot of first-time home buyers or college graduates don’t even look to see if they qualify. And each person is going to have to figure out if it’s the right time for them to rent or buy a house,” he said.

He gave some advice to people who are about to have to start paying off their student loans:

• Contact your student loan officer to ensure they have your up-to-date contact information

• Make sure your debit/credit card has not expired on your account

• Consider repayment or consolidation options

Moore also recommended consolidation options.

“That’s usually what a lot of those with student debt have managed to do to reduce that payment,” she said.

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Student Loan Debt Cancellation Decision Coming End of August https://visiopale.com/student-loan-debt-cancellation-decision-coming-end-of-august/ Fri, 22 Jul 2022 15:50:53 +0000 https://visiopale.com/student-loan-debt-cancellation-decision-coming-end-of-august/ President Joe Biden provided an update on the progress of large-scale student debt cancellation plans. Finally, after several weeks of no movement – or at least no public movement – on his plans to fulfill his campaign promise to forgive $10,000 in federal student loan debt, it looks like there will be an answer as […]]]>

President Joe Biden provided an update on the progress of large-scale student debt cancellation plans. Finally, after several weeks of no movement – or at least no public movement – on his plans to fulfill his campaign promise to forgive $10,000 in federal student loan debt, it looks like there will be an answer as to what he will do, exactly, and how he will do it, soon.

According Forbes, on July 20, a reporter pressed Biden on when a decision on debt cancellation would be made. Biden replied, “At the end of August.”

It has been several weeks since the administration last updated on Biden’s campaign promise to forgive student loan debt.

At that time, Biden planned to place an income cap on who might be eligible for student loan forgiveness. Reports say the plan would likely include $10,000 in relief for federal borrowers and the rebate would be limited to people who earned less than $150,000 in the previous year for single filers or less than $300,000 for couples filing jointly.

Lawyers warn that the proposed cancellation of $10,000 won’t be enough. While this would completely cancel the debt of about a third of borrowers, it would leave far more in debt than they already could not repay before the extended pandemic payment pause.

Debt Collective – the nation’s leading debtors’ union – has expressed its position on the proposed plan, saying $10,000 per person is nowhere near enough.

Other experts say another effective way to reduce the financial burden of student debt in the future would be to eliminate interest on student debt, according to Bloomberg. Experts argue that eliminating interest would likely save each borrower more than the proposed $10,000 in the long run.

The pandemic interest freeze on loans held by the federal government is due to expire on August 31, so the pressure to announce a more permanent solution is mounting.

From June 2022, 45 million Americans hold student debt totaling $1.75 trillion, or an average of $28,950 in debt held per borrower. Polls show that most millennials support significant debt forgiveness for federally held student loans.

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