Author: Drew Cloud

Sen. Brown Announces Support of Federal Student Loan Refinancing Legislation

There has been activity in Washington D.C. regarding student loans.  More support for the Bank on Students Emergency Loan Refinancing Act has been garnered.  This time, United States Senator Sherrod Brown, a Democrat from Ohio, announced his support for the legislation in Congress.  This is just one step the government is taking in addressing the issue of student loan debt.  The focus of this legislative act is to improve interest rates by allowing federal student loan refinancing. Currently, only private lenders offer student loan refinancing. Today’s students are graduating with an average student loan debt of around $30,000, and this amount is projected to increase.  In addition to rising costs, more Americans are defaulting on their loans each year.  One of the main culprits behind the rising default rate is the interest rate. Federal student loans utilize fixed interest rates, yet these interest rates are redefined every academic year.  In short, 2016 graduates have a complete different set of interest rates compared to 2020 graduates.  Federal interest rates lack a degree of flexibility compared to private lenders.  If a borrower is having trouble with interest payments, there is little he or she can do to alleviate the burden of large payments. This student loan refinancing act seeks to allow more flexibility and options when it comes to federal student loans such as Stafford and Parent PLUS loan options.  In a...

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Earnest Unveils Unorthodox Student Loan Refinancing Policy

Earnest has announced a new unorthodox refinancing policy for student loans that will revolutionize student loan repayment for millennials and generations to come.  Following a recent close of $17 million in investments by Maveron, Earnest is slated to expand across the nation as they implement a new underwriting process that turns out refinanced student loans with especially low interest rates. While the student loan debt toll increased to $1.3 trillion, companies were awarding loans based off of the backward-looking underwriting process that focused solely on credit history.  In short, loans were being disbursed based off past earning potential and history of a student or co-signer; therefore, rates were assigned based on inaccurate data pertaining to other individuals besides the primary borrower. With the help of new data driven software analysis, Earnest offers highly tailored loans based off of new factors instead of strictly credit history.  Loans are designed and awarded based off of analysis of full financial profiles and future earning potential rather than solely examining a traditional FICO score.  This earns Earnest a much better probability of receiving a return on investment. Each loan is highly flexible and specific to individual cases, so borrowers have considerable flexibility when choosing the terms and conditions to their student loan.  Interest rates are based on future earning potential and overall financial health which leads to interest rates as low as 1.92%...

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Starbucks Unveils Program to Pay for Employees College

  In June of 2014, coffee giant Starbucks announced that they had partnered with Arizona State University, or ASU, to helps its employees pursue a higher education. The program, called Starbucks College Achievement Plan, covers all tuition costs for four years through ASU’s online program. All Starbucks employees, and employees of Starbucks-owned businesses, who work an average of at least 20 hours per week in a U.S. store are eligible for the program. ASU’s online program costs around $60,000 for a 4-year degree. Starbucks covers up to 58% of the costs while ASU provides a scholarship for the remaining...

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Republic Mark Pocan Introduces Student Loan Refinancing Legislation

Recent activity in Congress  at Washington D.C. is shedding light on student loans and the issues they pose to the up and coming graduates.  Student loan debt has been increasing at an alarming rate over the past couple years; in fact, the debt tally has surpassed $1 trillion which makes it one of the largest types of consumer debt second to mortgages. Many loans involving homes and automobiles are allowed to be refinanced which is an action that helps lower interest rates on an overall sum of multiple loans.  Federal student loans, however, do not share this characteristic with its counterparts; in fact, options for refinancing are restricted by the federal government.  This is an issue because over 80% of student loans are provided by the federal government, so a large sum of burdensome loans lack the options and flexibility that make other types of consumer loans manageable. Borrowers can only currently refinancing their student loans with private lenders. In order to change this, United States House Representative from Wisconsin, Mark Pocan, introduced legislation that allows federal student loans to be refinanced for lower interest rates.  The proposal allows subsidized Stafford loans, unsubsidized Stafford loans, and federal direct PLUS loans to be refinanced when borrowing rates are reduced. As student loan debt increases every year, cause for concern increases along with it.  To put it in perspective over roughly...

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