Category Archives: Student Debt

What students owe and why it matters.


Black Students Graduate With More Debt Than Whites, Study Finds

Black college graduates take on significantly more student debt than do their white counterparts, according to a new study by Gallup.

The study, conducted with Purdue University and the Lumina Foundation, found that half of black students who graduated from 2000 to 2014 reported graduating with more than $25,000 in debt, compared with 34 percent of white graduates who reported that level of debt. According to the study, the gap has remained roughly the same during the past four decades.

The stud…


Panel Will Guide Expansion of Education Dept.’s Debt-Relief Program

The U.S. Department of Education announced plans on Tuesday to establish a negotiated rule-making panel charged with hashing out how to expand the income-based student-loan repayment program. In a notice to be published in Wednesday’s Federal Register, the department specifies that a panel of negotiators will meet in February 2015 for as many as three sessions.

President Obama announced plans in June to extend the Pay as You Earn benefit to people with older loans. The program caps participants’…


Student Debt in Mind, Education Dept. Renegotiates Loan Servicers’ Contracts

The U.S. Department of Education on Friday announced it had renegotiated its contracts with federal student-loan servicers, giving them more incentives to keep borrowers from defaulting on their loans.

President Obama announced plans to renegotiate the contracts in June, but Friday’s announcement provides more detail. For example, customer-satisfaction surveys will now play a larger role in how the servicers are evaluated, according to a statement from the department.

Student-loan servicers have…


Adjuncts Would Qualify for Loan Forgiveness Under Proposed Bill

Adjunct professors would become eligible for a federal student-loan-forgiveness plan available to public servants under the terms of a bill introduced on Thursday by Sen. Richard A. Durbin, an Illinois Democrat.

The Public Service Loan Forgiveness Program allows employees of nonprofit organizations—including full-time professors at public universities—to have their federal student loans forgiven after making 120 payments while working in that capacity. Eligibility for the program would be ex…


New Analysis Says College Is (Surprise!) Still Worth the Cost

An analysis released on Wednesday by the Federal Reserve Bank of Cleveland comes to a familiar conclusion about the value of a college education: While earning a degree saddles many people with student-loan debt, it still pays off in the long run. Among the evidence cited by the researchers, Daniel Carroll and Amy Higgins, is the advantage in earnings enjoyed by those with college degrees. The report also notes that students who attend college but do not earn degrees get little to no earnings a…


Illinois Sues 2 Settlement Companies Over Student-Debt Claims

Illinois’s attorney general on Monday filed lawsuits against two companies that claim to help borrowers free themselves from student-loan debt. The lawsuits accuse the companies of having engaged in deceptive practices such as charging upfront fees for services that the government provides free or that are nonexistent.

The lawsuits, which are the first to be filed by a state attorney general against settlement companies over deceptive practices in student-loan debt, were aimed at First American …


Despite Criticism, Education Dept. Extends Loan Contract With Navient

The U.S. Education Department has extended its contract with Navient, a student-loan servicer and collection agency that was formerly a division of Sallie Mae, despite allegations it has overcharged borrowers, The Wall Street Journal reports.

Navient’s work for the federal government was worth $106-million last year, and its contract would have expired this month. Sallie Mae, which in April was divided into two companies, Navient and Sallie Mae Bank, agreed last month to pay $97-million to settl…


Interest Rates on New Federal Student Loans Will Rise for 2014-15

Interest rates on new federal student loans will rise for the 2014-15 academic year, with the rate on undergraduate Stafford loans increasing to 4.66 percent, Bloomberg reported.

Congress voted last year to tie interest rates to the high yield on the 10-year Treasury note. This year’s auction took place on Wednesday, with the yield on the note set at 2.61 percent.

The interest rate on Stafford loans for undergraduates will rise to 4.66 percent, up from 3.86 percent. For graduate students, the ra…


U. of Baltimore Offers a Free Semester to Students Who Can Finish in 4 Years

The University of Baltimore announced on Tuesday that new freshmen entering this fall will be offered free tuition in their final semester if they can finish their degrees in four years, The Baltimore Sun reported.

The university’s president, Robert L. Bogomolny, said the break was not a direct response to the university’s low four-year graduation rate for first-time, full-time freshmen, which now stands at 8 percent, second-lowest in the University System of Maryland. But he said he hoped the d…


Study Examines Characteristics of Student-Loan Borrowers Who Default

A study released on Monday by the National Bureau of Economic Research examines the loan-repayment and default outcomes, 10 years after graduation, of students who earned baccalaureate degrees in 1993.

The study looks at differences across individual and family-background characteristics, as well as by factors such as college major, type of institution, debt levels, and post-graduation earnings.

“Among the individual and family-background characteristics, only race is consistently important for …