Category Archives: Student Debt

What students owe and why it matters.

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What Trump’s Proposed 2018 Budget Would Mean for Higher Ed

Updated (5/23/2017, 2:19 p.m.) with details on the budget proposals for scientific and medical research.

The Trump administration on Tuesday released its budget proposal for the 2018 fiscal year. All told, the budget would cut federal education programs by more than $10 billion. The Department of Education’s total operating budget would be slashed by $9 billion, and spending on secondary-education programs would be redirected to school-choice initiatives — the chief policy goal of Betsy DeVo…

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Education Dept. Says It Will Pick Single Loan Servicer

The U.S. Department of Education will award one contract to Navient, GreatNet, or the Pennsylvania Higher Education Assistance Agency to service student loans and to build a platform to do so, James Manning, the acting under secretary of education, told reporters on Friday. The move is part of the next phase of the department’s revamping of how it chooses an outside company to service the billions of dollars in federal student loans it issues.

In April, Betsy DeVos, the education secretary, with…

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Trump’s Budget Could Eliminate Public-Service Loan Forgiveness. Here’s What to Know.

Budget documents obtained by The Washington Post paint a bleak picture for many federal education programs: The newspaper reported on Wednesday that President Trump’s administration plans to cut them by a total of $10.6 billion. The proposed education budget would cut spending on programs in secondary education in order to funnel some of that money into school-choice programs, which have long been a major focus for Education Secretary Betsy DeVos.

In terms of money for higher education, the prop…

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Education Dept. Announces Moves to Ease Burden of Fafsa Tool’s Absence

Education Secretary Betsy DeVos on Monday said the department would relieve some of the burden on students and families affected by the suspension of the Internal Revenue Service’s Data Retrieval Tool, which makes it easier to fill out the Free Application for Federal Student Aid, the Fafsa.

The changes, announced in a “Dear Colleague” letter, will affect the verification requirements for the 2016-17 and 2017-18 Fafsa cycles. Instead of using the tool or requiring a tax transcript, “institutions…

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Federal Watchdog Is Investigating Possible Bias in Student-Loan Servicing

A federal watchdog is investigating whether student-loan-servicing companies discriminate against borrowers with past-due debt based on their race, sex, or gender, The Washington Post reports.

Patrice A. Ficklin, director of the office of fair lending at the Consumer Financial Protection Bureau, told reporters on Friday that the agency had identified student-loan servicing as an area at risk of credit discrimination, according to the Post. “We’re looking at disparities in outcomes … and we…

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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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Consumer Financial Protection Bureau Sues Nation’s Largest Student-Loan Servicer

The Consumer Financial Protection Bureau is suing Navient, the country’s largest servicer of federal and private student loans, for failing borrowers during every stage of repayment, the federal agency said on Wednesday in a news release.

In the lawsuit, which seeks undisclosed damages, the bureau states that Navient violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collections Practices Act.

Navient provided borrowers with b…

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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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New Jersey Will Forgive Student-Loan Debt of Dead Borrowers

Gov. Chris Christie of New Jersey signed a bill on Monday that forgives the student loans of borrowers who die or become permanently disabled, ProPublica reported.

Some borrowers who become temporarily disabled can also defer loan repayment under the new law, according to the Observer.

The bill’s enactment follows an investigation by ProPublica and The New York Times that found the state’s student-loan program to have “extraordinarily stringent” rules. Their July article described how a New Jers…