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.
Governor’s plan would waive (some) college costs
New Mexico Gov. Michelle Lujan Grisham isn’t waiting around for potential Democratic presidents to enact a free-college-for-all platform.
Announced Wednesday, Lujan Grisham’s New Mexico Opportunity Scholarship would make her state’s 29 public colleges and universities tuition-free for residents. Unlike the Excelsior Scholarship offered by New York, the only other state to take up the “free college” concept so far, the New Mexico proposal would benefit all students regardless of their family income.
If approved by legislators, the Opportunity Scholarship could lessen the need for student loans in New Mexico, but let’s be clear: It wouldn’t eradicate education debt in the state. The program covers just tuition and fees but not room and board, books and supplies or other living expenses. Consider that tuition and fees to attend the University of New Mexico for the 2019-2020 school year, for example, represented just 33% of the school’s own estimated cost of attendance.
How it affects YOU: If you live and learn in New Mexico, the Opportunity Scholarship is a major victory. It could erase your tuition costs, although you’d still need to figure out how to reduce your overall cost of attendance.
If you live outside New Mexico, examine your own state’s free-college policy (if it has one). Visit your state agency’s website via the Department of Education to learn more. Your chances of finding a free education are hit-or-miss: 17 states have such programs in action, according to the National Conference of State Legislatures, although none of them are as far-reaching as New Mexico’s.
And if your state doesn’t even offer free community college, don’t lose hope. There are plenty of other ways to pay for school without resorting to debt.
Also in the news …
- The U.S. Army cited student loan debt as a key reason why it beat its 2019 recruiting projections, the Army Times reported Wednesday. The report quoted the head of Army Recruiting Command as saying many are attracted to being “100% paid for state college” after four years of service. (Note that military veterans also have pathways toward loan forgiveness.)
- Cornell on Monday joined Columbia and New York University as schools offering free tuition to medical students. Cornell’s program awards a full-ride scholarship to those demonstrating financial need, which would provide relief to more than 50% of its enrolled students.
- U.S. Rep. Brendan Boyle (D-Pa.) announced on Monday a legislative proposal that would expand Public Service Loan Forgiveness (PSLF) to employees of faith-based non-profits, including clergy. “Someone who sacrifices a higher pay or comfortable salary to enrich the lives of others should not be crippled by student loan debt,” Boyle said.
- Thanks to “Good Morning America,” one student loan borrower had a great Monday: Karen Escobar, a 21-year-old junior who is pursuing a career as a lawyer while parenting her daughter, saw her loan balance zeroed by education company Chegg on live TV.
- Late last week, the Federal Trade Commission (FTC) sued the marketers and financial backer behind two debt relief schemes that allegedly conned student loan borrowers out of millions of dollars. The FTC said the companies had promised borrowers that their loan payments would decrease or even disappear in exchange for fees, or convinced them to take out new high-interest loans. (So be sure to learn how to avoid tricky scams like these.)
- A Government Accountability Office report released at the end of August chided colleges and universities for failing to alert student parents to a critical benefit. A federal program called Child Care Access Means Parents in School allows students with their own kids at home to receive a stipend for childcare costs. It awarded a median monthly subsidy of $385 to about 3,320 student moms and dads during the 2016-2017 school year.
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