The White House is stepping up efforts to help people repay their student loans.
About 1 in 7 borrowers default on their federal student loans within just three years of beginning to repay them.
President Barack Obama's administration is launching a new website that clearly outlines income-based repayment plans. It provides personalized repayment plans so Americans can pick what best suits their needs.
Administration officials say income-based repayment plans can slash monthly payments. They extend the repayment period from 10 years to 20 years. Remaining balances of federal loans will be forgiven after 20 years.
Education Secretary John King said the goal is to enroll at least 2 million more borrowers in repayment plans. He told reporters on a conference call that he is still paying back loans that he took out in graduate school. King said the goal is to protect consumers' credit.
Defaulting can damage credit, making it difficult to obtain other types of loans.
More than 40 percent of Americans who borrowed from the government’s student-loan program aren’t making payments or are behind on payments, raising worries that millions may never repay.
Federal student loan debt now exceeds $1.3 trillion.
The Obama administration announced Tuesday a plan to forgive $7.7 billion in federal student loans held by an estimated 387,000 permanently disabled Americans, of which roughly half, 179,000, are in default.
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While the administration tried to streamline the discharge of student loans for the permanently disabled four years ago, few eligible borrowers took advantage. Now, the Department of Education is starting to identify and contact eligible borrowers to help them take the necessary steps to discharge their loans.
“In 2012, the administration took steps to streamline the process to allow for Americans who are totally and permanently disabled (TPD) to use their Social Security designation to apply to have their loans discharged. But too many eligible borrowers were falling through the cracks, unaware they were eligible for relief,” U.S. Education Undersecretary Ted Mitchell said in a prepared statement. “Under the new process, we will notify potentially eligible borrowers about the benefit and guide them through steps needed to discharge their loans, helping thousands of borrowers. Americans with disabilities have a right to student loan relief. And we need to make it easier, not harder, for them to receive the benefits they are due.”
Starting April 18, borrowers identified in the match will receive a letter from the government explaining the steps needed to receive a discharge. They will not be required to submit documentation of their eligibility, unlike disabled borrowers who apply for the discharge on their own. Notification letters will be sent over a 16-week period and will be followed by a second letter after 120 days.
The letters will inform borrowers of the tax implications of the discharge, since the government can tax the loan amount forgiven. While the president’s 2017 budget proposal seeks to exclude TPD discharges and other Department of Education loan forgiveness programs from taxable income, it will require congressional action to make that happen.
What to do if you’re eligible but not contacted
Eligible borrowers who do not receive notification from the Education Department can initiate the necessary steps to have their student loans forgiven by following the steps outlined on an Education Department website:
Initial notification letters will be sent over a 16-week period and will be followed up with a second letter that will be sent 120 days after the initial letter if a signed application is not received. Notification will also include information to ensure that borrowers understand the potential tax implications of the benefit and can make an informed decision about electing a discharge.
Help for non-eligible student loan borrowers
Defaulting on a loan seriously damages your credit score, and because student loans are rarely discharged in bankruptcy, the debt can haunt borrowers for decades. (You can see how your student loans are currently affecting your credit scores for free on Credit.com.)
There are some options for people who are behind on payments to get back on track, even if forgiveness isn’t an option. To get out of default, you can combine eligible loans with a federal Direct Consolidation Loan, or you can go through the government’s default rehabilitation program. If you make nine consecutive on-time payments (the payments can be extremely low), your account goes back into good standing, and the default is removed from your credit report.
In what has been called a "fun April Fool's" column, the New York Times identifies Stanford University as the most selective institution of higher education in the country after an announcement that it admitted less than five percent of applicants to the class of 2020.
“We had exceptional applicants, yes, but not a single student we couldn’t live without,” the New York Times reported an anonymous Stanford administrator as saying. “In the stack of applications that I reviewed, I didn’t see any gold medalists from the last Olympics -- Summer or Winter Games -- and while there was a 17-year-old who’d performed surgery, it wasn’t open heart or a transplant or anything like that. She’ll thrive at Yale.”
Last year, the Stanford received a record number of applications -- 42,487 -- and invited less than 2,500 high school seniors to join Stanford’s class of 2019.
The five percent admission rate was a record low until this year's 4.69 percent rate.
“This is the worst thing that has happened to anyone, ever,” Bruni quoted a high school senior from Washington, D.C., as saying. "Whether she accepts an offer of admission from M.I.T. or one from Duke, she’ll defer enrollment and take a gap year to regain her confidence," he wrote, poking fun at the sentiments of discouraged young people and also pointing out the privilege and sense of entitlement stereotypically embraced by many young millennials.
A total of 1,318 high school seniors were accepted to Sanford's newest undergraduate class on Friday. An additional 745 early action students were accepted in December. The 2,063 admits came from a pool of 43,997 applicants, the largest in Stanford’s history. Anoter 3.6 percent of applicants were given a place on Stanford’s waitlist, according to The Stanford Daily. This year's admits come from 50 states and 76 countries.
“We are honored by the interest in Stanford and overwhelmed by the exceptional accomplishments of the students admitted to the Class of 2020,” Richard Shaw, Stanford dean of admissions and financial aid, told the Stanford Report. “Our admitted students reflect the deep and profound diversity of the world in which we live. We believe these students will impact that world in immeasurable ways.”
Though rejecting so many applicants seems like grounds for financial concern, Stanford donors haven't pulled back, the New York Times reported. In fact, the rise in the school's donations might be growin "in tandem with its exclusivity."
Admitted students have until May 1 to accept Stanford’s offer.
Read the New York Times piece here.
If you want to get out of having to pay your student loan debt, you have very few options. Sure, there are student loan forgiveness programs and maybe you could get your employer to help you repay the debt, but for the most part, you’re stuck with those loans until you make the very last payment.
For many people, starting adulthood tens of thousands of dollars in debt creates this sense of being trapped. As a result, people would do some pretty outlandish things to escape it -- or, at least, they say they would.
LendEDU, an online student loan marketplace, asked student loan borrowers what they’d be willing to do in order to eliminate their debts. The poll isn’t scientific or statistically representative of U.S. student loan borrowers -- the figures come from an online survey of 513 borrowers who have graduated -- but it’s entertaining.
The most common thing student loan borrowers would do in exchange for debt relief? Stay off social media for life. Nearly 58 percent of respondents were willing to do that.
Going without coffee for life came in at a close second.
Respondents had an average of $31,762 in outstanding student loans at the time of the survey, and 57.11 percent said they’d lay off the java for eternity if doing so would eliminate their debts. (It’s interesting to consider that 43 percent of people said they’d rather be in serious debt than take a sip of it again.
Almost as many people -- 56.73 percent -- were willing to trade their debt for a punch from Mike Tyson. People preferred that to giving up alcohol and drugs for life (56.14 percent).
Some less common but no-less-intriguing responses included the following: taking a year off their life expectancy (40.35 percent), giving up texting forever (35.67 percent), naming their first-born daughter Sallie Mae (28.07 percent) and wearing the same outfit every day for the rest of their life (20.47 percent). Things got more extreme from there, with 6.47 percent saying they’d cut off their pinky finger if it meant having no more student loan debt.
It’s unlikely that cutting off a finger would be less painful than repaying student loan debt. Then again, Americans have $1.3 trillion in outstanding education debt. Millions have fallen behind on those loans and face consequences like wage garnishment or losing out on Social Security benefits.
Unpaid student loans can severely damage your credit, which has a huge bearing on several common needs like housing, auto loans and insurance. If you’re having trouble paying your student loans, the first thing to do is reach out to your student loan servicer to find out what options you have for getting back on track, so you can eventually find your way out of debt and fix your credit. You can see how your student loans affect your credit scores by getting two free scores every 30 days on Credit.com.
Airbnbs provide comfortable and interesting home away from homes for many people around the world.
For travelers, it's an alternative to pricey and mundane hotels, and for those that offer their spaces for others to rent, it's a good source of income.
One college student in New England decided to try his luck at the rental business by posting his college dorm room on the site.
Jack Worth, a 19-year-old student at Emerson College, wrote in the listing's description that his dwelling offered “a private, single-bedroom unit with sweeping views of Boston Common, right in the heart of downtown.”
The second-year student was able to rent out his space in a 12-story building of about 750 other students on three separate occasions before the housing department at the college found out about his Airbnb listing. They told the teenager it was against school regulations.
"Really, the idea just came from the combination of understanding where Emerson is located in the city and it being in such a heavily-desired neighborhood," Worth told the Boston Globe. "And the thought of how I could make a little bit of extra money."
Emerson spokesman Andy Tiedemann told Reuters that the residence hall policy prohibits students from renting out their housing units “to protect residents and the community from exposure to safety and security risks.
Worth, who was fined $150 by Airbnb for violating rules and now faces a disciplinary hearing by the educational institution on "several charges of misconduct," has started a petition to support himself and "his honest, entrepreneurial endeavor."
"There is nothing criminal with providing cheap housing to travelers," Worth's colleague, Ari Howorth, wrote on the petition's page." Jack Worth gave travelers from far and wide a taste of Boston life and the Emerson experience simply because he wanted to help those who otherwise wouldn't be able to afford to stay in the downtown area. If the Emerson community is as inclusive as it claims to be, it should act it."
As of Wednesday afternoon, more than 400 people had signed the petition.
Social media users took to Twitter to express their thoughts about the situation using the hashtag #FreeJackWorth.
Read more here.
Posted by Jack Worth on Sunday, January 31, 2016
Posted by Jack Worth on Sunday, January 31, 2016
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