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.
Student debt and the presidential race, part 2
With the first vote in the presidential caucuses and primaries less than a year away, contenders are starting to stake out policy positions, including their views on student debt and college affordability.
At this early stage, more of the focus has been on whether college should be subsidized or even free, rather than thinking through relief for those who owe student debt. Specifically, many of the better-known contenders are weighing in on whether a four-year college education should be free for those who can’t afford it.
U.S. Sen. Bernie Sanders, returning for another run at the presidency, is a major proponent of “college for all,” introducing a bill of the same name in 2017 that would also make two-year programs free for all students, regardless of income.
As we reported last month, U.S. Sen. Kamala Harris has expressed interest in the idea, and so have many other Democratic candidates, including Julián Castro, U.S. Sen. Cory Booker and U.S. Rep. Tulsi Gabbard. In fact, several of the senators running have co-sponsored legislation to provide free higher education to low-income students. But not everyone thinks it could work.
Notably, U.S. Sen. Amy Klobuchar has come out against free four-year college — she did say that if she “were a magic genie and could give that to everyone and we could afford it, I would” — although she hasn’t ruled out subsidized community college. Former New York Mayor Michael Bloomberg, who hasn’t announced whether he will be running, also opposes the idea, describing it as “a nice thing to do, but unfortunately professors want to get paid.”
Klobuchar and Bloomberg’s skepticism over college for all is matched by possible independent candidate and Starbucks founder Howard Schultz and President Donald Trump, both of whom have criticized the plan.
When it comes to aid for those already buried under college debt, there’s been less discussion among the 2020 hopefuls. But here, U.S. Sens. Elizabeth Warren and Kirsten Gillibrand are notable exceptions.
Warren is a long-standing proponent of moves to help Americans repay their student loans. She sponsored a bill in 2017, still languishing in Congress, that would allow the federal government to refinance federal student loans at the same low rates now offered to new college loan borrowers.
Gillibrand, too, has come out in favor of creating a way to refinance college loans through the government. (Currently, student loan refinancing can only be done via a private lender.) In a tweet earlier this week, the New York senator said she would begin her presidency by allowing the refinancing of all student loans at 4%, which is below even the rates on new federal loans.
“The federal government shouldn’t be making money off the backs of our students, period,” Gillibrand wrote.
Likewise, South Bend, Ind., Mayor Pete Buttigieg — also running for president — has indicated interest in the issue, though he hasn’t yet put out a specific platform on student debt. Buttigieg, an Afghanistan War veteran, would be one of the only millennials in the race, and he has spoken repeatedly of seeking “intergenerational justice.”
How it affects YOU: Judging from past presidential contests, it’s possible that many candidates’ views on the big issues are still “evolving,” so there’s no time like the present to let their campaigns know what you think. Just because you don’t live in Iowa or New Hampshire doesn’t mean you can’t help nudge them in the direction you want.
Try writing to the campaigns of Sens. Warren, Booker, Sanders, Harris, Gillibrand and Klobuchar, Rep. Gabbard, Mayor Buttigieg and Castro, as well as some of the less-covered would-be presidents. It’s still early enough in the game to influence the debate.
Also in the news …
- A group of Congressional Democrats say they’ve found evidence that the Trump administration tried to shield Education Secretary Betsy DeVos from an inspector general’s investigation, the Associated Press, Politico and others reported Tuesday. You can read the lawmakers’ letter to DeVos here.
- Major student loan servicer Navient rejected a $3.2 billion bid Monday from a pair of investment funds. According to Reuters, the offer valued Navient at 6.6% above the student loan company’s share price the previous trading day.
- Work on the complete overhaul of the federal student loan servicing system rolls on. If you’re interested in some of the details, insideARM has a report out on all the developments big and small since mid-January.
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!
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 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 2.54% APR (with Auto Pay) to 7.27% 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 March 18, 2019, 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 0318/2019. 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed 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.
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.
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 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|