Welcome to Student Loan News, a weekly summary of developments and events affecting college debt in the U.S. Join us each Friday for a look at goings-on that could impact your own student loan situation.
Supreme Court could get last word on student loan rules
With complaints against student loan servicers mounting, more and more states have stepped in to regulate.
As we’ve reported in the past, some state are enacting new rules for educational loan lenders. In other cases, the states have taken servicers and lenders to court — for example, multiple states’ attorneys general have joined a federal suit against Navient for allegedly steering borrowers away from programs that could have helped them (a charge that Navient denies).
But, as MarketWatch reported this week, the student loan companies are pushing back, claiming that they are governed by federal law rather than state law, making states’ complaints invalid. Several cases testing this legal theory are currently winding their way through the court system, and the report quotes Washburn University law professor David Rubenstein as saying the issue looks likely to end up at the Supreme Court for review “in the foreseeable future.”
While the ultimate outcome is anyone’s guess, the report also cites Dan Zibel, the vice president and chief counsel for the National Student Legal Defense Network (NSLDN), a borrower advocacy group, as saying he’s “cautiously optimistic” judicial review of the question will come down on the side of the plaintiffs.
How it affects YOU: If you feel you were misled by your lender or servicer, or you otherwise have an interest in one of the suits against them, then you’ll definitely want to follow this story. While resolution of these cases may still be many months (but hopefully not years) away, you can reach out to your elected representative’s office of constituent services for information. And if you have a special situation in which you feel you were wronged by your servicer or lender, you could also speak with a student loan attorney, and in some cases, can provide legal aid for free.
Also in the news …
- While we noted last week that some Democratic Party candidates running for president are looking at the idea of helping provide tuition-free college, Politico quoted former New York City mayor Michael Bloomberg — who is also considering joining the presidential race — as opposing the plan, calling it “totally impractical.”
- Not only is Navient facing government lawsuits, but it could now be in trouble with its shareholders. A judge ruled that a shareholder suit could proceed against the Delaware-based corporation over allegations it “pumped up its stock price by hiding serious problems with its loan portfolio and other risks from investors,” according to Delaware Business Court Insider.
- The Albany Times Union has a report out on how the student debt crisis is falling disproportionately on the shoulders of women, and how the ranks of student loan borrowers over age 60 is on the rise.
News can be useful, but if you want some deeper advice, take a moment to sign up for the Student Loan Hero weekly digest email and get valuable financial knowledge sent straight to your inbox … for free!
Need a student loan?Here are our top student loan lenders of 2022!
|0.94% – 12.99%1||Undergraduate|
|2.00% – 12.35%*,2||Undergraduate|
|0.94% – 11.44%3||Undergraduate|
|0.98% – 11.90%4||Undergraduate|
|1.69% – 11.98%5||Undergraduate|
|1.86% – 9.39%6||Undergraduate|
|0.00% – 23.00%8||Undergraduate|
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
Information advertised valid as of 7/1/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.49% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.19% APR to 10.14% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada.
4 Important Disclosures for Ascent.
Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts&Cs
Rates are effective as of 07/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes income-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates.
1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 3.75% to 13.30% annual percentage rate (“APR”) (with autopay), variable rates from 1.89% to 11.98 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.75% to 13.30% APR (with autopay), variable rates from 2.59% to 11.98% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.55% APR (with autopay), variable rates from 1.69% to 11.98% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/17/2022.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
7 Important Disclosures for Funding U.
Funding U Disclosures
Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.
8 Important Disclosures for Edly.
1. Loan Example:
About this example
The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.
2. Edly Student IBR Loans are unsecured personal student loans issued by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply.