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.
According to our calculations…
It’s the law: Colleges and universities need to have “net price calculators” on their websites that allow prospective students to figure out how much their education there would really cost. But according to a new study from the University of Pennsylvania, not every school is following the rules.
The study surveyed 80 universities and noted 11 where the calculator was hard to find, as well as a couple with no calculator at all. Perhaps more worrisome, a full 40% of the schools’ calculators used data that was three years old or more, or didn’t specify when the data was from. The researchers also cited many cases where free aid (such as grants and scholarships) was lumped in with loans, making it unclear how much of the cost of attendance would need to be paid back.
How it affects YOU: If you are or a loved one is looking at colleges, make sure you have an accurate picture of the cost. A good tool is the Department of Education’s College Scorecard, which has average attendance costs, median earnings for graduates and even links to the schools’ own net price calculators. And once you have a specific institution in mind, reach out to their financial aid office for further details on costs and ways to defray them.
Veterans seek to close 90/10 loophole
Shady, predatory, fly-by-night schools have long seen military veterans as a juicy target, mostly because of the so-called “90/10” rule.
Under this regulation from the late 1990s, no learning institution can receive federal aid unless at least 10% of its income comes from something other than government funds. The idea was to make sure the federal aid system didn’t prop up shoddy schools that would fail without taxpayer support.
But problems have surfaced because of a loophole in the regulations that don’t count veterans’ GI Bill benefits as federal funds. So, in order to make their 10% in nonpublic income, some for-profit institutions took to actively seek out veterans to enroll. (There’s a good explainer in this Forbes piece from a couple years ago.)
With Congress now looking to rewrite the Higher Education Act, military-affiliated groups traveled to brief House members last week, urging a swift end to the 90/10 loophole, Diverse reported. Likewise, the groups advocated on other student loan issues important to vets, such as maintaining the Public Service Loan Forgiveness program.
How it affects YOU: If you’re a military veteran and feel you’ve been defrauded by your school, there’s a variety of measures you can take. If possible, reach out to your Veterans Affairs representative, but also make sure to submit a complaint directly to the VA as well. And if you’re a vet looking at schools, watch out for scams, especially if you’re interested in an online college — there are good options out there, but also some very bad ones, so be certain that the school you want has the right accreditation and a good track record for its graduates. In the meantime, know that a legislative fix is in the works, with at least one bill now introduced in the Senate to end the 90/10 loophole.
Also in the news …
- Education Secretary Betsy DeVos was on Capitol Hill this week to defend the administration’s proposed budget cuts and other agenda items. As massive as the spending cuts are, USA Today noted that they are unlikely to make it through Congress — after all, they failed to pass even when Republican held total control of both chambers.
- Although the courts have said the current administration must uphold the borrower defense rules protecting defrauded students, CNN reported on Tuesday that more than 100,000 student loan borrowers who believe they were cheated are still waiting to hear back on their applications for discharge of their debt.
- Likewise, the Washington Post reported recently that borrowers with student loans in default are having trouble getting information from the Department of Education.
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 2.50% 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 April 17, 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 04/17/2019. 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 our student 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.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|