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.
Judge rules in favor of PSLF applicants
It’s hardly news that Public Service Loan Forgiveness is difficult to get. Data out late last year showed just 206 borrowers had their loan forgiven through PSLF out of a total of 41,000 applicants as of September 2018.
But hope for the program’s success isn’t entirely dead, all the more so after a federal district court judge determined last Friday that the U.S. Department of Education had been unfairly moving the PSLF goal posts. The case involved a 2016 lawsuit by a group of lawyers who had thought they were in line for PSLF, only to be told their employment no longer qualified for student loan discharge.
“These changes were arbitrary and capricious,” The Washington Post quoted Judge Timothy Kelly as writing in his ruling. “The individual plaintiffs structured their careers and their long-term financial plans around their eligibility” for PSLF.
According to The Post’s report, the judge’s ruling gives three of the plaintiffs grounds to request to be reinstated into the program and have their loan forgiveness reconsidered, although the final decision may still rest with the Education Department.
The report also quoted an attorney for the firm representing the PSLF applicants as saying, “The decision provides a ray of hope for individuals working towards, or who have been denied public service loan forgiveness.”
However, a separate MarketWatch account cited a representative with the American Bar Association — which also joined the suit — as saying it’s still “not clear on what the ultimate remedy would be” in this case.
How it affects YOU: The extreme difficulty (so far at least) of obtaining student loan forgiveness through PSLF has many borrowers wondering if the program is even worth it. Still, the ruling is the latest in a series of small-but-important signs of hope for PSLF. For instance, the Education Department last May expanded the number of repayment plans that qualify under PSLF, at least temporarily.
If you do some sort of public service or other nonprofit work and are keen on PSLF, make sure first and foremost that you qualify and are in an eligible payment plan. It’s also worth looking through Federal Student Aid’s FAQ page on the program. And if you’ve been turned down or have questions about eligibility, contact FedLoan Servicing at 855-265-4038.
Also, don’t forget that there are other programs offering student loan forgiveness. You can get the rundown in our comprehensive guide.
Also in the news …
- A new study from Guardian Life Insurance takes a look at the state of student loans in the U.S. Among the findings: The cost of college has risen fivefold since 1990, and women hold nearly two-thirds of all college debt despite making up just 56% of university students nationwide. You can read the entire study here.
- FedLoan Servicing, run by the Pennsylvania Higher Education Assistance Agency (PHEAA), has seen its profit plunge by 90% over the past four years and “could soon start to lose money,” according to a report from Philly.com. Part of this, the report said, is “because its servicing business has gotten so much harder, with new Congress-mandated loan options requiring more attention over the phone.”
- It’s worth noting that student debt isn’t just a U.S. problem, as the proliferation of college loans has spread across much of the globe. Just for some perspective, consider this report from Malawi’s Maravi Post about corruption at the small developing nation’s board in charge of handing out student loans.
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 firstname.lastname@example.org, 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|