Category Archives: Student Aid

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With IRS Data Tool Down, Lawmakers Ask Education Dept. to Help Students

A bipartisan group of lawmakers in the U.S. House of Representatives and the Senate has asked the U.S. Department of Education to help families who may be affected by the outage of a popular online tool that had made it easier to apply for federal student aid.

The Internal Revenue Service and the Education Department announced this month that they had suspended the data-retrieval tool, a device that automatically pulls federal tax information into the Free Application for Federal Student Aid, th…

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Former For-Profit Lobbyist Quits Job at Education Dept.

Taylor Hansen, a former lobbyist for for-profit colleges, quit his job at the U.S. Department of Education on Friday, Bloomberg reports.

Mr. Hansen is the son of Bill Hansen, head of USA Funds, a student-loan-guarantee agency that has recently branched out into other career-education projects. The younger Mr. Hansen was one of only a few advisers to Education Secretary Betsy DeVos with experience working in higher education.

He resigned after the department announced that it would reverse an Oba…

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Citing Security Fears, IRS Suspends Key Tool in Financial-Aid Process

The U.S. Department of Education and the Internal Revenue Service on Thursday announced that the IRS had suspended the agency’s data-retrieval tool, a key online resource that, among other things, makes it easier for students and families to fill out the financial-aid form known as the Fafsa.

This week, reports circulated online that the data-retrieval tool had suddenly become unavailable, without a public explanation from the Education Department or the IRS. After questions swirled about the to…

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In Shift, Education Dept. Will Automatically Forgive Student Loans Incurred at Defunct For-Profit

With one week left before its leadership changes hands, the U.S. Department of Education announced on Friday that it would automatically grant loan-debt relief to former students at the American Career Institute, a defunct for-profit college in Massachusetts. The move is a shift from how the department has so far granted relief to defrauded borrowers, requiring them to apply for it.

The department said in a news release that it would send emails to former students of the institute starting on Tu…

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USA Funds Moves to Further Focus on Education Philanthropy and Investing

USA Funds, which has played a growing role in education philanthropy and investing in the last few years, announced on Wednesday that it would shed its loan-guarantee affiliates.

Officials at the $1-billion organization said the move would allow it to further focus on its new mission of ensuring that college leads to meaningful results for students, which it does by making grants and investments in for-profit and nonprofit companies and organizations.

Over the last three years, the nonprofit USA…

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$108 Billion in Student Debt Is Likely to Be Forgiven, Government Says

In a report released on Wednesday, the U.S. Government Accountability Office said the federal government would forgive at least $108 billion of student debt in the coming years, an amount higher than expected.

The office also said the Department of Education’s method of forecasting the cost of its income-driven repayment program does not “ensure reliable budget estimates,” because, among other things, it does not factor in inflation.

The report looks at borrowers in such plans, an option created…

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One-Third of Low-Income Student Borrowers Who Rehabbed Loans Could Default Again

[Updated (10/17/2016, 11:45 p.m.) with additional information and editing changes.]

One in three student-loan borrowers with very low incomes who have “cured” a loan in default in the past year are likely to default again, according to a report released on Monday by the Consumer Financial Protection Bureau.

The federal agency’s student-loan ombudsman’s latest annual report highlights complaints the bureau has received from the “most economically distressed” borrowers about the transition from de…

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National Default Rate on Student Loans Declines for Third Straight Year

The overall three-year cohort default rate on federal student loans dropped in newly released data, marking the third straight year the rate has fallen, the U.S. Department of Education announced on Wednesday.

The percentage of borrowers who defaulted on federal loans within three years of entering repayment dropped from 11.8 percent to 11.3 percent for those who started repayment between the 2012 and 2013 fiscal years.

Colleges with high default rates may lose their access to federal student ai…

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Amazon and Wells Fargo End Student-Loan Partnership

Wells Fargo has stopped offering Amazon customers reduced interest rates on private student loans, The Washington Post reported on Wednesday.

The partnership was discontinued about a month after the companies announced they were working together. Neither company responded to a request for comment, the Post said.

The short-lived program offered Wells Fargo education loans to Amazon Prime Student subscribers with an interest rate discounted by half a percentage point.

Critics said the partnership …

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U.S. Acts Against Wells Fargo Bank for Illegal Student-Loan Practices

The Consumer Financial Protection Bureau has found that Wells Fargo Bank illegally increased the costs of and unfairly punished certain student-loan borrowers, the federal agency said in a news release on Monday.

The bureau found Wells Fargo’s student-loan servicing did not include payment information for customers, charged them illegal fees, and did not update inaccurate credit-report information.

As complaints from borrowers of private student loans have risen, the federal government has incre…