"Today we took another important step in helping our young people achieve their hopes and dreams of going to college" Culver is quoted saying by the Chicago Tribune.
]]>Investors have been scared by the sub-prime mortgage crisis and another recent bill cut federal subsidies to the industry dramatically so as a result this stabilization bill has been endorsed very widely.
"Millions of families are facing difficult economic challenges at every turn. With this legislation, their children's college dreams won't become the next victims of today's troubled economy," says Senator Edward Kennedy.
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According to Bloomberg more than 50 lenders, or 14% of the private student loan volume, have withdrawn from the guaranteed student-loan program. This is a direct result of the credit crunch that our country is currently facing, predatory student loan lending practices, and the recent legislation that cut federal subsidies to private student loan lenders.
I do not think this is the right course of action personally, why not reform the student loan and education funding systems we have in place instead of buying up all the loans and bailing out the lenders that have been making so much money at the cost of our students.
]]>Add the current credit crunch to the subsidy cuts and you have even more lenders dropping their student loan and student loan consolidation programs. As we have said here for quite some time, the new legislation is a step in the right direction but we believe middle class students were hit pretty hard by the new bill and this looks like some more evidence supporting this conclusion.
]]>So basically Nelnet was lobbying against legislation that would hinder their ability to make misleading statements to borrowers. They want to continue to trick people into higher interest rate loans and other catch 22 practices.
Additionally records do not indicate that Nelnet filed a lobbying disclosure for the first half of 2007 which is required by law. If that's not enough Nelnet is the same company that settled in 2007 with the New York Attorney General's office following the famous investigations involving conflicts of interest in student loan lenders (they were giving kickbacks to college administrators and alumni for steering borrowers their way).
We told you it was dirty.....
]]>Here is a link to a great article on the Chicago Tribune website that once again reitterates the problems with the legislation.
http://www.chicagotribune.com/business/yourmoney/chi-ym-started-0203feb03,1,6155987.story
]]>We aren't finance or securities experts but really, does this surprise anyone?? Chances are it doesn't surprise anyone who has actually borrowed from Sallie Mae as I have personally. At-any-rate here's the link to the full story at Fox Business.
]]>“It’s long past time for the Department of Education to end this scandal. Auditing every lender to identify abuses of the 9.5% provision is a welcome start, but the Department should also insist that every past taxpayer dollar inappropriately paid to the abusers be repaid. I applaud the Department’s Inspector General for opening a new investigation into the 9.5% loan issue, so that the lenders can be held accountable and students and taxpayers can finally learn how much was wasted through this corrupt scheme.”
]]>http://www.aacrao.org/transcript/index.cfm?fuseaction=show_view&doc_id=3773
]]>"Chase Education Finance said it will waive the origination fee on Stafford loans and the 1 percent default fee on Stafford, Parent PLUS and Grad PLUS loans.
It said it will also reduce the interest rate on all three loans by one-tenth of a percentage point if it makes, services and retains the loans.
The changes apply to new loans Chase makes and plans to retain between Dec. 1, 2007, and June 30, 2009, Chase said.
Chase also said borrowers who obtain school-certified Chase Select private loans can receive below-prime rates and will pay no origination and repayment fees for applications approved between June 1, 2008, and June 1, 2009."
]]>Students are going to be outraged and rightly so but we agree with the Telegraph in that education helps break the cycle of re-offending. Prisoners shouldn't be getting money for food and rent but they should be getting the financial aid and student loans they need. We would argue that society as a whole benefits a great deal in keeping these prisoners from committing future crimes.
]]>Bottom line is that students did not know they owed any funds until they showed up for registration and by that time it was to late to make a plan. All-in-all it sounds like a pretty big mess and I know that if I were one of those students I would probably be right out there with them and we wish everyone affected the best of luck.
]]>Robert Shireman, executive director of the Project on Student Debt is quoted as saying this by News-JournalOnline.com, “To treat the person who borrowed on the student loan more harshly than the one who borrowed on credit is backwards. … We want to be encouraging people to go to college.’’
News-JournalOnline.com also reported that the issue is being reviewed by the U.S. House of Representatives on Thursday. Let's hope for some sanity on this issue.
]]>On another note they added that one branch of the Canadian government prefers proposals over bankruptcies but another branch prefers the opposite. They stated that the government should work together towards the same goal.
Bankruptcy reform is needed both in the US and Canada regarding student loan debt. Hopefully this is a step in the right direction as the new legislation has not come into effect yet in Canada and hearings are continuing.
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