On May 24, 2017, the head of the Federal Office of Student Aid (FSA), James Runcie, handed in his resignation. Runcie blamed his sudden departure on overreach from Betsy DeVos and the Department of Education.
“I am incredibly concerned about significant constraints being placed on our ability to allocate and prioritize resources, make decisions and deliver on the organization’s mission,” Runcie wrote in an email to this staff obtained by the Washington Post. “[I am] encumbered from exercising my authorities to properly lead this great organization.”
But Department of Education spokeswoman Liz Hill said Runcie was avoiding testifying in front of Congress. “The Secretary directed Mr. Runcie … to answer questions regarding oversight within FSA and repeated issues concerning improper payments,” Hill said in a statement. “He chose to resign rather than face Congress.”
Interpretation of Runcie’s resignation has largely split along partisan lines. Some Democrats want an investigation into interference in the FSA. But Republicans suggest Runcie mismanaged the federal student aid system.
James Runcie’s resignation comes after the new education budget proposal
Runcie’s resignation comes a week after the White House released its education budget proposal. The proposal called for cuts to Pell grants, work-study programs, interest subsidies, and Public Service Loan Forgiveness. It also sought to replace the four existing income-driven repayment plans with a single, new plan.
The budget proposal would slash $143 billion from the education budget over the next 10 years. The FSA currently oversees $1.4 trillion in financial aid to students, including more than $150 billion in grants, loans, and work-study funds for college students.
Don’t panic: The budget plan proposal isn’t a done deal
But borrowers shouldn’t panic. This budget plan is just a proposal right now, and Congress is likely to make significant revisions.
“Nothing is set in stone at this point,” said Jay Fleischman, student loan lawyer. “In the event that there are going to be any major changes to the way federal student aid is administered, repaid, or forgiven, [the plan] has to go through a process that entails far more than one person standing up and saying this is going to be so.”
At the same time, Fleischman encourages borrowers who oppose the proposal to take action. “[This is the] time to stand up and pick up the phone to call your elected representatives if you disagree,” he said.
The FSA can do more to protect students and borrowers
Consumer advocacy groups have criticized the FSA for failing to help borrowers and allowing too many people to go into default. In fact, the Consumer Financial Protection Bureau is currently suing Navient, the nation’s largest student loan servicer, for its harmful practices.
The FSA “is widely seen as a strong ally to the student loan industry,” said Rohit Chopra, a senior fellow at the Consumer Federation of America, according to Politico. “The next COO should be laser-focused on the interests of students and taxpayers.”
For now, deputy chief operating officer Matthew Sessa will take Runcie’s place. We’ll have to wait and see how the next head of the Office of Federal Student Aid plans to protect student loan borrowers amidst all these upheavals.
Know your student loan options
Federal watchdogs and borrower advocacy groups have questioned the FSA’s ability to manage major loan servicers such as Navient. And as the current lawsuit against Navient shows, borrowers can’t always rely on loan servicers to act in their best interests.
Educate yourself. When it comes to student loan repayment, you need to educate yourself about your options. Look for trusted sources with a commitment to protecting student loan borrowers.
Consider income-driven repayment. If you’re struggling to pay your bills, look into income-driven repayment plans. Deferment and forbearance can also help some borrowers who go back to school or run into major financial hardship.
Think about refinancing. Student loan refinancing is also an option for borrowers with a steady income and strong credit. And there are a variety of loan forgiveness and repayment assistance programs for borrowers around the country.
With this latest upheaval from the education department, it’s more important than ever to take action on your student loans. Learn all of your options, so you know the best path forward.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|