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.
Wells Fargo pulls back on college product fees
As we’ve mentioned in this space, Wells Fargo has come under fire for charging relatively high fees for its products marketed to college students. A government report criticizing the bank over the fees came to light late last year, followed by a recent think-tank study with similar findings.
But now the tide appears to be turning, with Wells Fargo announcing last week that it has introduced new policies to waive some fees for its college customers. The changes, which the bank said it began rolling out in February, include one free overdraft and four free out-of-network ATM withdrawals per month, as well as a refund on one incoming wire transfer.
“With the new benefits, Wells Fargo expects average costs incurred for its reported Campus Card population to be reduced by approximately half,” the bank said.
How it affects YOU: While Wells Fargo (or any other financial institution) deserves kudos for anything that will save its customers money, our previous advice still stands: Shop around before opening a bank account since there are all kinds of deals specifically for college students — and all kinds of ways to avoid banking transaction fees.
Rethinking Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program was back in the news this week as a group of Senate Democrats unveiled proposed legislation to revamp it, noting criticism that only a tiny fraction of applicants are approved for forgiveness.
Under the new plan, students would get half of their outstanding student loan balances wiped away after five years of monthly payments with an eligible employer, Politico reported Thursday. Currently, PSLF forgives all remaining balances, but only after 10 years’ worth of qualifying repayments. The proposal would also allow all federal loans and all types of repayment plans to be eligible, the report said, rather than just a few under the present system.
How it affects YOU: While a “PSLF 2.0” would be huge for student loan borrowers, any major changes are unlikely in the near future due to the politics around the issue. The bill to change the program was sponsored by a number of Democratic presidential hopefuls but, as Politico noted, not a single Republican senator has signed on. That said, if you support the changes (or don’t), remember you can always lobby your own senators to back the bill (or not) by making a phone call or sending an email.
More flexibility for 529s
Congress appears likely to pass new legislation to allow those with 529 savings accounts to use leftover funds for repaying student loans, CNBC reports. If enacted, the law would let borrowers to use up to $10,000 from a 529 to put toward their debt. In fact, the new plan would also allow 529 money to go toward home schooling and apprenticeships, the report said.
How it affects YOU: Unfortunately, as the same report notes, a large number of 529 holders might not need this benefit. “Households with the  accounts have significantly higher income and wealth than those without them,” it said, citing Federal Reserve data. It added that use of 529s isn’t very widespread, and most holders of these accounts exhaust them by the time they graduate.
Also in the news …
- The Department of Education is assuring high school students that they won’t lose student aid just for posting pictures of their lavish senior proms, BuzzFeed reports. This comes after Federal Student Aid’s @FAFSA Twitter account jokingly suggested it was evaluating one 17-year-old’s postings of her super-deluxe prom night.
- Texas is considering a major student loan repayment assistance program (LRAP) for law enforcement officers, according to CBS and Fox affiliates. After their first year’s service, police officers and other eligible borrowers in the state would get 20% of their student debt balance wiped away each year, up to a $20,000 maximum.
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|
|Check out the testimonials and our in-depth reviews!
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|