2 years ago
greggr
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Obama Announce Plans to Revise Student Loan Repayments
Are you dealing with a student loan? While I'm lucky enough to be old enough that my loans have been paid back (and were minimal), my kids aren't as lucky. I have two in college now, and one already out and paying his loans back. It's a difficult world, and a world that is full of much more debt than I'd ever like to have to see my kids with. I do what I can to help, but it's a system that one parent's love and hopes to make disappear cannot always correct.
Obama let college students know yesterday of his plans to find ways to improve student loans and student loan repayments to make it better for students, and less likely to put them into debt for the rest of their lives.
Overall, it seems like his plans boiled down to the following:
_ Official report about if student loans should have different rules when it comes to bankruptcy or other loan laws due by Oct. 1
_ Will require clearer disclosures from companies to make sure borrowers understand who is servicing their loan and how to set monthly payments and change repayment plans.
_ This so called "student aid bill of rights" should help those taking private loans get better information and benefits already provided to those with federal loans
_ It should also "help you get back in good standing with reasonable fees on a reasonable timeline."
_ There also may be requirements for loan servicers to put payments towards the highest interest rate loan first.

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I don't have data to back up my comment, but if higher learning institutions weren't so bloated with 6-digit+ salaried staff, the cost for a college education wouldn't be so contingent on borrowing money.
Needs to be more. Information is only the tip of a large iceberg that had ridden the American public with debt. The 1994 law that exempted student loans from bankruptcy if not in need of a repeal, is in need of an edit or overhaul. Shifting payments towards the higher interest loan first in turn will not solve the issue. Lower interest rates and small loan amounts are needed. In short, the cost of education needs curbed, as does the loan system. The 1994 law also opened the doorway for loan corporations to compete with variable interest rates instead of fixed, something that is why students are now likely to pay back double of their original borrow amount on the loan over the life of it, which is now as long as a home mortgage by the way (30 years). A very good newspaper, The Economist, found that the 15x increase in student textbook and supply costs alone go against the usual grain of supply and demand and are only really being driven by price gouging. Loan companies already as of right now have to wait 270 days, or 9 months, to be able to pursue default action on student loans. Wage garnishment is one of the options most used, which while can be a pain does also at least leave some room for asset acquirement in terms of the consumer (i.e. a car). The companies are also very lightly restricted on how many time they can alter an interest rate, usually once per year by almost a full % per year, allowing larger monthly payments to flow into them. It's a really big mess and a huge financial strain. It has to be sorted and the plan to change the bankruptcy rules is a start but by no means a solution or an end. More must be done.
One more thing I thought of too. These schools are in bed with the book publishers to get institution versions of books that prevent (or at least hinder) students from reselling books. Students can't even use last year's version because they get updated every year or so. So...I am a bit jaded in that regard.
@marshalledgar @Spudsy2061 Wow. Something just has to change. I didn't even know this much about all the loan history, etc. It's just rough.