Author: Drew

Trump Administration Offering an Exclusive Contract to Service Federal Student Loans

Donald Trump speaking at a CPAC event in Washington, D.C.The Trump administration will be offering one company an exclusive contract to service outstanding federal student loans. Secretary of Education Betsy DeVos released an amendment to the servicing solicitation where she expanded on the decision, claiming the old system “was cumbersome and confusing.”Currently, student loans are serviced by four separate for-profit companies with Navient being the largest of the bunch. The others include Nelnet Inc., Great Lakes Educational Loan Services, Inc. and FedLoan Servicing (aka PHEAA).Under the Obama administration, much of the $1.4 trillion in student loans were transferred from...

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Analysis Shows Hiring Debt Collectors is a Waste of Money

The United States Department of Education building in Washington, D.C.While the United States government has been relying on debt collectors to help defaulted student loan borrowers get back on track, analysis shows that the money is going to waste.According to a report by the Consumer Financial Protection Bureau, which analyzed almost 600,000 student loan borrower accounts, over 40 percent of borrowers who dealt with debt collectors after entering default once again defaulted on their student loans within three years.To put this issue in perspective, the Department of Education has reserved over $4 billion in funding to pay debt collectors...

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Celebs Reveal How Hard it was for Them to Pay Off Student Loans

U.S. Senator Ted Cruz of Texas at the 2017 Conservative Political Action Conference in Maryland.When it comes to paying off student loans, celebrities are just like us. In fact, some very famous celebrities weren’t able to pay off their debt until they were well into their 30s and 40s according to CNBC.The biggest names on the list are arguably Barack and Michelle Obama. The former President even revealed in a speech that they both accumulated lots of debt during undergraduate and law school. Although both had good jobs, they barely finished paying off their debt before he was elected...

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New Student Loan Interest Rates Won’t Benefit Taxpayers

The Capitol building in Washington, D.C.By now you’ve probably already heard that as of July 1, federal student loan interest rates will rise. But what you don’t know is that the increase can actually have a negative impact on taxpayers according to Forbes.While some might think that higher interest rates would benefit taxpayers, that is not the case. Why? Simply put, the government runs on a deficit. While student loan interest rates go up, the government’s borrowing costs also rise, but net revenue for taxpayers does not.Another key factor is the emergence of income-driven repayment (IDR) plans and its...

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Alaska Lowers Base Rate for Student Loans

View of Anchorage, Alaska from a local beach.There was good news for student loan borrowers in Alaska: The Alaska Student Loan Corporation decreased its base rate for the 2017-18 year to 5.75 percent—a .5 percent reduction from last year’s rate of 6.25 according to the Alaska Commission on Postsecondary Education. The move comes at a time when interest rates are on the rise after the treasury auction with many lenders adhering to the market trend.The Alaskan corporation offers student loans to state residents, even if they attend school in another state or are out-of-state residents attending school in Alaska....

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