Trump’s First 100 Days: Weakening Consumer Protections for Student Loan Borrowers

By Amelia Collins, Policy Analyst, NCLR

The president proposed an ambitious student debt plan during the campaign last year. He called student loan debt an “albatross” hanging on the necks of borrowers, proposed a generous and streamlined repayment plan, and stated that the government shouldn’t “profit” off its student loan program. However, instead of using the first 100 days of his presidency to follow through on these promises, President Trump and Secretary of Education Betsy DeVos have rolled back crucial consumer protections for our nation’s 40 million student loan borrowers.

Let’s set the stage.

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Five Ways to Avoid Repayment Scams and Enroll in the Best Student Loan Repayment Plan for You

By Brenda Calderon, Policy Analyst, Education Policy Project, NCLR

If you graduated with the class of 2015, you may be coming to the end of your six-month student loan “grace period.” While choosing the repayment plan that’s best for you is itself tricky, the process is complicated by websites that are riddled with student loan scams. Recently, the Department of Education released a blog to advise students against loan repayment scams. A cursory search on Google or even Facebook placement ads shows an abundance of companies promising to help students have their debt forgiven and payments substantially lowered.

googlestudentloanThese companies usually will offer to assist students in filing forms and keep them up-to-date with new laws that forgive loans for a service fee (sometimes monthly). What these companies don’t advertise is that these services are free if a student does his or her own research. Here are some tips to avoid paying for services that are free and manage the repayment process for federal loans:

  1. Find out the types of loans you have and whether consolidating your loans is a better option for you. You can look up your federal loans here. It may make sense to consolidate your loans so that you only make one payment each month. If the interest rates don’t vary widely among your loans, this may be an easy way to simplify your monthly repayments.
  2. Get an estimate of how much your payments will be using the online repayment calculator. This site is funded by the Department of Education and can populate information based on your current loans and their corresponding interest rates to estimate how much you will have to pay each month.
  3. Get to know your student loan servicer. Your student loan servicer handles your loan after you’ve received the funds. They can help with loan consolidation and repayment options. You can look up your loan servicer here.
  4. Select a plan that best fits with your current financial situation and goals. There are several variables you will need to consider when choosing the best repayment plan: how much money you are making, how quickly you want to pay off your loan, whether you work for a nonprofit or the government and qualify for loan forgiveness, etc. Vox offers an interactive tool to help you answer these questions and offers repayment options aligned to your responses.
  5. Use forbearance and deferments only if you absolutely cannot pay your loans. If you are unemployed or cannot afford to pay at least 10% of your discretionary income for loans, this may be an option for you. Having a loan in deferment or forbearance does not reduce the payments—in fact, this may increase the amount you have to pay in the long run.

Choosing the right repayment plan is a difficult decision, but the Department of Education offers tools to help students. With a little research, you can be on your way to saving money by enrolling yourself in the best repayment plan for you!

Weekly Washington Outlook – June 2, 2014

White House at Night

What to Watch This Week:

Congress:

The House:

The House is in recess this week, returning Monday, June 9.

The Senate:

The Senate returns from its recess Monday afternoon to consider a number of pending judicial and executive nominations, including Sylvia Matthews Burwell’s confirmation to be the Secretary of Health and Human Services.  While much of the week will be devoted to nominations, it is possible that Senate Majority Leader Harry Reid will take-up a bill making it easier to dismiss Veterans Affairs officials for misconduct.  It is also possible later in the week Senate Leadership will bring to the floor legislation that would permit recreational hunting and fishing in federal wilderness areas (S. 2363).

White House:

On Monday, the president will speak on a conference call in the afternoon on the Environmental Protection Agency’s rulemaking to cut greenhouse gas emissions from power plants. Later in the evening, he will depart for Warsaw, Poland. On Tuesday morning, President Obama will arrive in Warsaw, where he and President Bronislaw Komorowski of Poland will have an opportunity at the airport to meet with U.S. and Polish airmen who are supporting an aviation mission based at Lask Air Base. Following this event, the president will travel to Belweder Palace to take part in a bilateral meeting and joint press conference with President Komorowski. In the afternoon, the president will travel to the Chancellery of the Prime Minister to participate in a bilateral meeting and deliver statements to the press with Polish Prime Minister Donald Tusk. Later, he will go to the Presidential Palace to co-host with President Komorowski a meeting with Central and Eastern European leaders. In the evening, the president will attend a Solidarity Dinner at the Royal Castle. On Wednesday, President Obama will hold a bilateral meeting with President-elect Petro Poroshenko of Ukraine and then travel to the Royal Castle to take an official family photo with leaders attending the Freedom Day event, marking the 25th anniversary of Poland’s first partially free election. At the Royal Castle, Mr. Obama will deliver remarks commemorating Freedom Day. In the afternoon, he will fly to Brussels, Belgium. In the evening, the president will travel to the Royal Palace of Brussels to meet with King Philippe of Belgium. Afterward, he will attend the 2014 G-7 Summit, which will begin with a leaders working dinner on foreign policy issues. On Thursday, the president will participate in G-7 meetings on the global economy and energy and climate issues and a G-7 working lunch on development. G-7 leaders will also take a traditional “family photo.”  In the afternoon, President Obama will participate in a bilateral meeting with Prime Minister David Cameron of the United Kingdom. In the evening, the president will travel to Paris, where he will have dinner with President Hollande and remain overnight. On Friday, the president will travel to Normandy, France, to deliver remarks at Omaha Beach for the 70th French-American Commemoration D-Day Ceremony at the Normandy American Cemetery and Memorial. In the afternoon, he will travel to Sword Beach to attend a leaders lunch hosted by President Hollande and then attend the Ouistreham International Ceremony.  In the evening, President Obama will depart France en route to Washington. Continue reading

We’re One Step Closer to Making Higher Education More Affordable

By Carmen Orozco-Acosta, Policy Analyst, Education Policy Project, NCLR

GraduationYesterday brought great news for the millions of students across this country that want to go to college, but are concerned about the ever-increasing price tag.  President Obama announced a new plan to help make college more affordable to the middle class, an important move from his Administration which has undertaken a number of efforts to make higher education attainable for all Americans.  The skyrocketing cost of higher education is a problem that affects all students, but hits the Latino community especially hard, because our youth are often first-generation college students and come from low-income households.

A college education has become a baseline credential to compete in an increasingly competitive job market.  Students who want to pursue a college degree should be able to, without accruing a mountain of debt.  Unfortunately, realistic concerns about post-college graduation debt often deter students from pursuing higher education.  In a country that values education and treats it as the great equalizer, that frankly shouldn’t be the case   Continue reading

Student Loan Compromise a Positive Step Forward, but Concerns Remain

GraduationLast week, both chambers of Congress voted to pass a compromise student loan measure.  The bill was a long-awaited and retroactive response to the July 1 rate hike from 3.4 percent to 6.8 percent for federally subsidized Stafford undergraduate loans. Today, President Obama also signed the measure into law.

Before the passage of this compromise, Stafford loans and Direct PLUS loans were fixed at a predetermined rate.

Last week, Congress changed this by pegging interest rates to ten-year Treasury rates with an added percentage for administration of the program and a finite cap on the interest rate of 8.25–10.5 percent, depending on the type of loan.   Continue reading