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.
States (and schools) fight the student debt crisis
Let’s check back in on the state governments and their efforts to ease the burden for student loan borrowers. Following some progress made in recent months, this past week has seen fresh developments at the state level, as well as new student-loan-related initiatives by a few colleges:
- California has launched CalHealthCares, a program to give physicians up to $300,000 in student loan forgiveness in exchange for taking at least 30% of their patients from MediCal, the state’s medical aid program for low-income residents. More than 1,300 doctors applied for the program, but just 247 were accepted, the Desert Sun reported.
- Meanwhile, Massachusetts moved another step closer to creating a student loan bill of rights — just as states like Connecticut and Maine have done, as a pair of proposed laws on the matter moved before committee, the Lowell Sun reported. The bills would require student loan servicers to be licensed with the state and would create an ombudsman’s office to help those struggling with school debt. Efforts to enact such a law have been underway in Massachusetts since at least 2017.
- But the road doesn’t run just one way: Oregon failed to pass legislation that would have allowed a state income-tax deduction for student loan payments, according to Law360. The move would have allowed deductions of both interest and principal payments, the Oregonian had reported earlier this year.
- The University of Texas at Austin announced it will allow students from families with less than $65,000 in annual income to attend for free, according to the Dallas Morning News. The report notes that rival university Texas A&M has offered tuition-free attendance since 2011 for those with family incomes of $60,000 or below.
- Embracing a trend that has swept through many of the Ivy League schools, upstate New York’s Colgate University says it will eliminate student loans from the awards packages of all students whose families make less than $125,000 a year, giving them grants instead, the Syracuse Post-Standard reported. The 2019-2020 tuition for Colgate runs $57,695, with room and board bringing the cost of attendance to north of $72,000, the report said.
How it affects YOU: As we’ve said in this space before, state governments can often be more responsive to constituents, since they serve smaller populations. If this is an important issue for you, lobby your state representative and state senator. You can get the contact information by finding your state government website in this database. And if programs like California’s CalHealthCares intrigues you, take a look at our database of states’ student loan repayment assistance programs.
Teachers’ union files lawsuit to fix PSLF
The American Federation of Teachers union filed a lawsuit Thursday to have the government make fixes to the Public Service Loan Forgiveness (PSLF) program, which less than 1% of applicants have been able to qualify for so far.
The suit alleges that the Department of Education “knows of — but completely disregards — repeated misrepresentations made by [student loan] servicers to borrowers who are attempting to qualify … resulting in unwarranted denials of loan forgiveness,” NPR reported.
The union also wants to set up an appeals process for those who are denied PSLF, according to the lawsuit.
How it affects YOU: Because it’s so difficult to qualify for — at least for now — you should be very careful if you decide to pursue PSLF. Make sure your employer qualifies you for the program and that you’re on one of the eligible payment plans. In the meantime, keep watching the news: This latest lawsuit isn’t the first to target PSLF, but the fact that one of the largest teachers’ unions in the country is now involved could help make qualifying for forgiveness easier in the future.
Also in the news …
- New data from the National Center for Education Statistics show that students at for-profit schools take on more debt than average and have a lower chance of finding employment, according to Politico.
- Education Secretary Betsy DeVos raised some eyebrows after she added an unusual signing statement to her required approval to discharge student loans for about 16,000 students from the now-defunct Corinthian Colleges, Politico also reported Wednesday. Below her signature, DeVos added “with extreme displeasure” — DeVos opposes wiping away student debt in such cases.
- A study from the Center for American Progress looks at how race affects the amount of student debt a teacher need to take on to get their degree, and how this impacts the diversity of U.S. education professionals.
- While we’ve talked about Americans fleeing the country to dodge student loan debt, it’s worth noting that this scenario isn’t just a U.S. thing. The Australian Associated Press has a report out warning Aussie expats that they must still pay back their student debt once their income reaches the level that triggers repayment (which is the policy over there).
- For whatever it’s worth: A new survey shows that more than 80% of New Jersey accountants see student loan debt as a national crisis, according to InsiderNJ.
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 2021!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 5.99%1||Undergrad & Graduate|
|1.99% – 5.64%2||Undergrad & Graduate|
|1.99% – 6.84%3||Undergrad & Graduate|
|2.25% – 6.88%4||Undergrad & Graduate|
|1.91% – 5.25%5||Undergrad & Graduate|
|1.89% – 5.90%6||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of Feburary 1, 2021.
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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 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 CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for SoFi.
5 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 02/17/2021 student loan refinancing rates range from 1.91% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.
6 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of January 4, 2021. Information and rates are subject to change without notice.