Category Archives: Student Debt

What students owe and why it matters.

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2 For-Profit Universities Will Cut Arbitration Clauses From Enrollment Agreements

Two for-profit universities owned by the Apollo Education Group will stop including mandatory arbitration clauses in students’ enrollment agreements, the company announced on Thursday.

Students at the University of Phoenix and Western International University will not have arbitration clauses in their enrollment agreements as of July 1, according to a news release.

The group has come under fire for its policy that does not allow students who say they’ve been defrauded to take the colleges to cou…

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Student-Loan Interest Rates Will Drop Again in 2016-17

Interest rates on new federal student loans will drop to their lowest level in a decade next year, Money reports.

The rate on undergraduate Stafford loans will drop from 4.29 percent to 3.76 percent for the 2016-17 academic year. The rate for graduate Stafford loans will be 5.31 percent, a drop from 5.84 percent this year. The rate on PLUS loans, which allow parents to take out loans to pay for their children’s college education, also dropped — from 6.84 percent to 6.31 percent.

Student-loan int…

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Education Dept. Plans Single Web Portal for Student-Loan Servicing

The U.S. Department of Education plans to streamline student-loan repayment by introducing a single web portal for borrowers, the department announced on Monday.

The web portal will allow borrowers to find information about their loans, payments, and benefits on one website and to avoid having borrowers kicked around to various loan servicers, according to a statement from the department. Along with the new website, the department rolled out plans to develop better customer service for borrowers…

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More Former Corinthian Students Will Have Their Debt Forgiven, Education Dept. Says

The U.S. Education Department has cleared the way for former students at 91 campuses once owned by the now-defunct Corinthian Colleges to have their loan debt forgiven, the department announced on Friday.

The campuses, which fell under Corinthian’s Everest and WyoTech brands, represent the largest swath of students to have been made eligible for loan forgiveness by the department, it said, although it did not specify how many borrowers could benefit.

The department also said on Friday that its “…

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After 3 Days of Talks, No Agreement on Rules to Protect Student Borrowers

Should students who say they’ve been defrauded by their colleges be guaranteed a chance to take their cases to court? When the U.S. Department of Education said recently that they should, advocates for student borrowers were encouraged. But now, after three days of negotiations over a rule intended to protect those borrowers, it’s still unclear whether such a guarantee will take shape.

At issue are the “mandatory arbitration” clauses that some colleges — chiefly for-profit institutions — ins…

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New Paper Proposes Starting All Over on Federal Student Aid

Nearly everyone agrees that the federal student-aid system is broken, perhaps irreparably so. The Pell Grant hasn’t kept pace with rising tuition, students are saddled with too much debt, and many states have shifted the burden for financing colleges onto the federal government and families. At the same time, the system’s reliance on vouchers has made it hard for lawmakers to hold colleges accountable without hurting students in the process.

So what if instead of reforming the system, we blew it…

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After Lawsuit, For-Profit College Will Forgive $15 Million in Ex-Students’ Loans

The for-profit Westwood College has agreed to forgive the student-loan debt of graduates of its criminal-justice program, amounting to roughly $15 million. The college reached an agreement last month with the office of Illinois’s attorney general, Lisa Madigan, to cancel former students’ debt from institutional loans, among other things, according to a copy of the deal provided to The Chronicle.

The attorney general sued the college in 2012, asserting it had deceived students and enrolled them i…

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Education Dept. Releases 2 Sets of Rules to Simplify Student Borrowing

The U.S. Department of Education has unveiled two sets of final regulations governing its expanded income-based repayment program and efforts to rein in banks’ deals with colleges.

The revised Pay as You Earn plan, dubbed REPAYE, which is one of the department’s income-based repayment programs, appears similar to the one negotiators settled on earlier this year. The expansion of the plan, which caps monthly payments at 10 percent of borrowers’ discretionary income, comes more than a year after P…

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Average Student Debt Climbed Higher in 2014, Study Finds

Average student-loan debt among graduates of four-year public and nonprofit private colleges who had incurred debt at the time of graduation climbed to $28,950 for the Class of 2014, up 2 percent from the Class of 2013. An annual report by the Institute for College Access and Success, released on Tuesday, found that at those colleges, 69 percent of graduating seniors had student loans, a rate that held steady from last year.

This is the institute’s 10th annual report on average student debt. The…

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Complaints From Private Student-Loan Borrowers Rise as Few Enroll in Income-Based Repayment

The number of complaints from private student-loan borrowers to the Consumer Financial Protection Bureau increased by roughly 20 percent in the past year, from 5,300 last year to 6,400 in the past year, according to the annual report of the bureau’s ombudsman.

Another key finding in this year’s report: A whopping 95 percent of borrowers with federal loans made by private lenders are not enrolled in income-driven repayment plans, an option heavily advertised by the Obama administration that allow…