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Student loan companies in settlement talks
NEW YORK
The attorney general of New York is negotiating settlements with eight student loan companies to reform deceptive practices in the industry. A particular focus is the marketing of products so they appear to be federal loans, an official said Friday.
"Some of the seals (used by lenders) looked very similar to those of the federal government," said Alex Detrick, a spokesman for the attorney general's office.
The distinction is important because federal loans have fixed interest rates that are often lower than private loans.
The student loan companies also misled consumers at times about the best loan options on the market, he said.
This group of direct-to-student lenders sends advertising material by mail or market to students online, but do not necessarily have a presence on campus. Students are sometimes offered iPods or gift cards as an incentive to sign up, Detrick said.
The attorney general's office is also preparing to sue student lender Goal Financial LLC for deceptive practices, Detrick said. Unlike the lenders currently negotiating settlements, Detrick said Goal Financial did not signal a willingness to reform its practices. He did not know how many, if any, of the companies would reach a settlement.
Calls to Goal Financial's headquarters in San Diego went to voicemail Friday and were not immediately returned. The company's attorney, Lewis Rose of Kelley Drye & Warren, did not return requests for comment.
Goal Financial was the sixth largest lender of consolidated student loans in the country in 2006, according to Student MarketMeasure, which tracks the student loan industry. Goal Financial made 111,426 loans worth $2.5 billion that year, according to the group. NEW YORK ... more -
The 2008 student loan blues
Back to school, kids, if you can scrape up the tuition. By some estimates as many as 200,000 college students may not find anyone willing to lend them money for school this year.
The 2008 Student Loan Blues Higher Education
Nicholas von Hoffman: Some 200,000 college students won't qualify for loans in September, and millions more will pay higher interest rates. Can they count on Obama to help them out?
Millions of others are going to have to jump through more hoops, pay higher interest rates and/or get their parents to co-sign their loans. This last expedient depends on the parents having a credit rating good enough to satisfy the money-lenders.
When students get loans this year, they will pay more for them. In at least some cases students are looking at rates of 23 percent. With those numbers a young person might be better off borrowing from the mafia.
Students shopping around trying to get themselves lower interest rates had best be careful. They can inadvertently get stung with higher rates as a result of trying to get lower ones.
In few other areas of consumer life are you at risk of being penalized for seeking out the best deal.... To quote a rate, lenders check an applicants credit history. And every time a shopper asks a lender for a rate quote, it can show up as another inquiry on a credit report. Lots of inquiries send the wrong signals to the formulas that create the popular FICO credit score. The lower the FICO score the higher the interest rate a student will have to pay for tuition money.
Cashing in on the kids is no small business. Last year it amounted to more than $17 billion. The interest on that is a lot of cabbage for private, government-subsidized loan companies, which explains why some college loan officers have taken bribes to steer students to favored lenders.
They have been lining up to screw unworldly 18-year-old freshmen and their parents who may not understand that there is a government student loan program at 6.8 percent interest--which is no bargain for someone about to start out in life, but better than getting the money from a guy with a baseball bat down on the docks. Since there is a cap on how much a student is allowed to borrow at the government rate, millions are also forced to sign up with the sharks.
No one can say how many students who take on these loans appreciate what a bad deal they have signed up for. Regardless of what bad luck may hit them in later life--unemployment, sickness, being run over by a beer truck--they must discharge that loan. There is no forgiveness. Unlike other debts, the law says not even bankruptcy will wipe out a student loan obligation.
It's a neat system. The colleges and universities run up tuition without stint or limit in a society in which you either go to college or live on the verge of poverty. You must go to school and incur the costs.
No tuition restraints were included in the just-enacted higher education law. But there are more costs than tuition. Higher education is better than the airlines at tacking on fees and special charges. And the publishers of textbooks costing more than $100 are exempt from prosecution under the Racketeer Influenced and Corrupt Organizations Act.
Young people have no representation powerful enough and well enough bankrolled to go up against the higher ed lobby. Barack Obama is their best hope.
He and the Democrats are counting on the youth vote to put them over the top this November. Lets hope that, if the young people win it for Obama, the new President will ignore the rich, academic liberal types who swarm about him and repay his youthful followers by getting them something approaching an even break. Back to school, kids, if you can scrape up the tuition. By some estimates as many as 200,000 college students may not find anyone will... more -
Post-Grad finance crash course
Welcome to the real world grads, welcome to paying back all the money you borrowed.
If you took out loans for school you should take a look at this article (click the link). If you don't know that there are two types of students loans you should most definitely check out this article. Welcome to the real world grads, welcome to paying back all the money you borrowed. ... more -
Every University a Junkie: More Debt Slavery for Future Generations
"For a junkie, a "crisis" is being unable to get the drugs he craves. American higher education is just such a junkie - with the federal government acting as the enabler who gives him another fix, rather than pointing him toward rehab.
A college can only charge as much as students are willing and able to pay. In recent decades, though, federal (and some state) lawmakers have forked over ever-more money to student aid - enabling colleges to charge exorbitant prices.
Consider the per-pupil cost of tuition, fees, room and board, as tracked by the College Board. At private US four-year institutions, the "price" of college rose to an average of $30,367 for the 2006-07 school year - up 208 percent over the last two decades. At public four-year institutions, the rise was almost 216 percent."
College and the huge fees are just another method of getting young people in debt. This debt slavery for education is destroying our future. "For a junkie, a "crisis" is being unable to get the drugs he craves. American higher education is just such a junkie -... more -
Sallie Mae now blowing up your credit ratings on 1 million student loan repayment ...
Instead of helping people achieve their dreams of using education to better their lives, Sallie Mae, America’s largest college student loan corporation, is apparently doing what it can to destroy those dreams through misrepresentation and manipulation. First on undisclosed nasty interest rates, now through credit agency reporting. They say only 1 million people affected. If you're one of the million you need to do something. Even if not directly affected you should be concerned about the future of a generation of graduates choking with debt. All for the profit of a few. And the packaging these loans to sell as securities for more profit. This will surely follow the path of the mortgage meltdown. Instead of helping people achieve their dreams of using education to better their lives, Sallie Mae, America’s largest college student... more
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Student loans dry up
Some of the nation's top student loan leaders say they will discontinue certain programs.
Bank of America and Citigroup's Student Loan Corp. arm said they would discontinue some student loans while Sallie Mae says it may stop issuing new federally backed loans altogether unless the government does something. Some of the nation's top student loan leaders say they will discontinue certain programs. ... more -
75% of Britain's under-35s are in the red
Student loans, credit cards, bank loans, borrowed cash... Young people of Britain! We are struggling with debt. Three-quarters of us owe an average of more than £9,000, and 12% owe more than £20,000, research has revealed. An one in five young people admit to spending more than they earn each month. Not good! But it gets worse...
"On average, young people spend twice as much on servicing their debt as they do on socialising, and more than three times as much as they pay into a pension. But more than half of under-35s are failing to pay into a pension - and among those who are, 24% are saving just £50 a month or less."
How are we ever going to afford retirement? Student loans, credit cards, bank loans, borrowed cash... Young people of Britain! We are struggling with debt. Three-quarters of us o... more -
Stanford will eliminate tuition for some students
About 1/3 of current students will benefit from this new tuition program which seeks to make college more affordable for families earning less than 100,000, and room and board free for those who earn less than 60,000. I hope more universities start to do this by using their endowments and by fundraising instead of thinking to raise tuition costs on other students. For those of us with teens just now beginning to research schools it's good to know we may have more options to choose from. About 1/3 of current students will benefit from this new tuition program which seeks to make college more affordable for families earn... more
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Top universities failed to spend £3 million meant for poorer students
Millions of pounds which could have funded thousands of students through top universities went unspent last year as some institutions failed to allocate an average of 19% of the money put aside to provide bursaries for state school pupils. Eight - including Cambridge University - underspent on bursaries by between £190,000 and £855,000. Opposition MPs said universities were not doing enough to open up admissions to poorer students.
Separate research conducted by academics on behalf of educational charity the Sutton Trust reveals that poorer students are being put off applying to university for fear of getting into debt and very few understand the bursaries on offer.
I don't really see how they can write this off as missed opportunity on behalf of the students. Do you think that this is deliberate classism on the part of prestigious uni's to keep their student body at a higher socio-economic level? I know that's extreme, and I hope that it's not true. But seriously, how do you mistakenly fail to allocate £3million in funding? Millions of pounds which could have funded thousands of students through top universities went unspent last year as some institutions ... more -
Chasing Candidates
All Jordi wanted was someone to address her personal situation. She's a college student over at BU--her issue was student debt. While she did hear an answer to her general question somewhere along the line, getting that personal one-on-one time with the majors was as hard as you might think. All Jordi wanted was someone to address her personal situation. She's a college student over at BU--her issue was student debt. ... more
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Student loans aren't a political issue
If anything, will there be work for me in the future?
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Student loans the next crisis
There are so many opportunities with a good education, but people need the tools to get the jobs they need to pay the loans off.
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The Road Out of Debt Is Longer For Ladies
Women take longer to pay off their student loans... and it's not a result of shoe shopping. This is really frustrating for me, actually. Why is it that still, in 2008, women are still not paid equally for the same job. They have to pay the same amount to get the same education as the men in their schools. And you know if women didn't have to pay as much, men would be up in arms about it. So why the double standard? Women take longer to pay off their student loans... and it's not a result of shoe shopping. This is really frustrating for me, ac... more
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Debt for Diploma
College costs are soaring but most students don't receive enough financial aid to cover it. Many are going into deep debt to make up the difference. Jodie Wilken is one semester away from graduating and is worried about how she'll pay it all back. College costs are soaring but most students don't receive enough financial aid to cover it. Many are going into deep debt to make... more
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Student Debt Slows Success
Continuing education costs are soaring, leaving many graduates in massive debt. And a degree doesn't always guarantee a well-paid position. That means many young adults are moving back home and taking jobs they're over qualified for and they're just able to make ends meet. Sound familiar? Tell us how you're dealing with student debt. Continuing education costs are soaring, leaving many graduates in massive debt. And a degree doesn't always guarantee a well-paid... more
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Student loan boost: Sometimes democracy works
The State Press, Arizona State University's student newspaper, gives their opinion on the college student financial aid bill passed by Congress on Friday. The State Press, Arizona State University's student newspaper, gives their opinion on the college student financial aid bill pass... more
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