Student Loan Overhaul
http://thedianerehmshow.org/shows/2010-03-30/student-loan-overhaul
As part of the health care legislation, the federal government will directly issue student loans, eliminating private lenders as middlemen. Diane and her guests discuss what the new system means for students, parents and schools.
Guests
Kim Clark
senior writer for U.S. News and World Report
William Wells
Director of Financial Aid at Wake Forest University.
Nina Marks
former college counselor at the National Cathedral School. She is founder of Marks Counseling Associates, LLC and the non-profit Collegiate Directions, Inc.
James Boyle
President, College Parents of America
Comments
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Hi Diane:
The new website is, "the bomb" as the teenagers say. It is so much more user friendly. One suggestion. Please add to your list of topics -- Demography and Ethnicity. "Society" is too vague. As our country moves toward a majority minority state, many of the topics, even in other categories, will begin to focus on changing demographics and ethnicity. Much of the "Tea Party" experience has at its core fears from White constituents about the changes in the US populations and a reaction to Barack Obama as President. He has been morphed into "the government." Immigration reform has at its core, issues around "new" people settling in the US. The Census, and the "drill down" of new categories, ethnicities, and nationalities, has demography and ethnicity in the discussion. Please give my best regards to your wonderful producers, Denise Couture, Susan Nabors, Sandra Pinkard, Nancy Robertson and Jonathan Smith, who while not heard from often, are the heartbeat of your program. Needless to say, Dorie Anisman is the best.
Kate Reed
In reference to the overhaul of student loans.
I've had them, my wife has had them my kids have had them.
what's the fuss from the opposition?
That the government is taking over what is essentially a government tax payer funded program?
I think it is because people are pre-disposed to believe what supports their political ideology and nothing more.
I'm afraid that some people are not interested in the facts.
N Kris Hagen Pomona NJ
My daughter finished graduate school last year and now has over sixty thousand dollars in loans-some are private some are Stafford loans from Sallie Mae, Great Lakes, Wachovia and others. Currently, making payments is very confusing and it will take many years for her to pay off these loans. Her annual income is far less than the total debt she owes. I wonder if the new bill passed will allow her to consolidate all these loans into one low interest loan?
Thirty years ago when I was in college I was blessed to work with a dear nun who was the financial director of the college. She handled all the paperwork for my grants and loans; I met with her once a semester to review my loans and sign papers. After I graduated she set up a monthly payment plan and it took me less than two years to pay off my loans. If only my daughter had the same experience, it is worrisome that she will be in debt for many years to come.
Both the College Cost Reduction Act that then-President George W. Bush signed in 2007, as well as President Barack Obama’s more recent proposals to improve and expand eligibility for income-based repayment (IBR) represent welcome steps in the right direction. Such measures acknowledge that student loan debt has created and continues to create serious financial hardship for young people exiting institutions of higher learning. However, neither the signed legislation nor President Obama’s proposed changes to the IBR program provide much, if any, relief to the hundreds of thousands of student financial aid borrowers like me who completed their education years ago and remain saddled with hefty and financially debilitating student loans.
I borrowed about $113,000 in private and federal student loans to pursue a law and master's degree. Thus far, I have paid back, including interest, about $137,300. With my repayment schedule under the current system, I will be about sixty years old when my student loans are paid off. Including interest, I will have paid approximately $325,000 for my law and master’s degrees. I simply do not accept that there is any education degree worth that amount.
My situation provides a clear illustration of how our society has reached, if not already passed, the point where student loan debt burdens eclipse the benefits derived from the education. It is time that our government officials recognize the scale of the problem and take significant measures to prevent current and ensuing generations from living in the prison that is student loan debt. While there are many steps Congress could take to address student loan debt, I highlight one proposal: Allow one-time, non-taxable, penalty-free withdrawals from retirement accounts for repayment of federal and private student loans. This measure, as much or more than any other, could go the furthest towards reducing student loan debt.
Is this new law for citizens only? Or is it also for anyone who wants to attend a US college or Community College?
If it is open to any person, regardless of citizenship, then how does it protect US taxpayers from default or abuse?
Thanks.
My son is a senior in college. Banks are charging interest on his student loans even while he is still in school full time. He ended up with 4 separate loans with 4 separate payments each month. The loans are stretched out for over 20 years. Is this so banks can make lots of money from college students that don't know any better? I'm glad the government is not using private banks.
Having three children, I filled out the FAFSA for the 10th time this year. The process has become clearer and clearer each year. I'm grateful for that, but with the loans they have, and the resultant mediocre incomes, I'm wondering if they will ever be able to pay them off and if the degrees will ever be realized as a good investment.
Also, every year the stafford loans increase, but the tuition and fees go up even more.
Is this all really worth it?
Wow. Diane read my comment on the air 10 minutes ago, and I am so offended I can barely see straight.
I originally wrote something to the effect of this (I used the "contact us" link, so I don't have the original email to just paste in):
"It seems that every year we hear about more and more Federal money flowing into education to "expand access" to college for American students. At the same time, every year, tuition costs grow higher and more unreachable.
It is generally acknowledged that the dramatic expansion of credit caused the spike in housing prices that led to our current economic crisis. Do your guests believe that the funneling of private and federal money into student loans has played a role in causing tuition prices to rise? Are we creating our own problems?"
Diane only read the first paragraph of my email (the unbolded part), and instead of any discussion of the role private and federal credit has played in causing our rising tuition problem, the guests just made a few bland statements about whether or not this legislation will make a difference. I am stunned that a program for which I have so much respect would cherry pick my words so shamelessly.
Wow.
For one of your panelists, where does one sign up in order to cap the repaying of student loans at 15%?
Thanks,
Andrew
I borrowed $23000.00 from 1990-to 1995 I graduated but never got a real job, and couldn't pay pack my loans. Today I owe $74000.00 (including the interest and the fees). I have been unemployed for the last 2 years. I am 53 years old and I don't-think I can ever pay. But the interest is keep adding.
my wife had $14000. in 1997, became ill and stop college. she works for 10 dollars an hour, she is 48 years old, but her loans has become 54 thousand dollars. (36 thousand in fees and interest. ). !!?
My daughter recently graduated with $60,000.00 in loans. Her loans are mostly personnal. She hasn't been able to find a job. She is going back to school to be a teacher and is accumulating more loans. Will this help her at all and is there anything you can suggest .
Laura
CLeveland, OH
Student loans are definitely the next economic bubble to pop.
The student loan bubble not be as extensive or far-reaching as the real-estate bubble, but with the terrible unemployment and under-employment problems the USA is having (especially amongst recent college graduates) there are going to be more and more student loan defaults and/or long-term deferments in the coming years.
That is disgusting usa1979 -- what you describe is a deeply unethical form of usury...no wonder the USA is economically falling apart.
Can someone please let me know - or repeat - the information about how to register/apply for the student loan repayment program that allows repayment in ten years if working for a government agency? I'm interested, but missed the information I need to look into it. Thanks!
will the new law change the tuition credit program for working in community services? I recently went back to school for my doctorate, and was hoping to get the tuition credit because I've been working in community mental health centers for the past 20 years. However, largely because my initial salary after gaining my Masters degree was less than 30,000 yr I got behind on my student loans from my BA and MS. Now, I'm apparently not eligible for the 50,000 credit because of the default status. I've completely paid off my loans now, including late fees and fines, but it doesn't seem fair that I'm not eligible for the credit. I default BECAUSE I was working at a lower paid job than the ones some of my peers were in.
This show has turned into a financial advisory show, can we get back to the issue of this new legislature. Pros - cons, who is effected most? What does your panel think? What will this mean in the future? Please stop answering these peoples financial woes. Give us more info!
I completed my undergraduate degree in December. I worked a couple of summer internships, but earned only a small fraction of the cost of attendance, the rest covered by my parents. I would have liked to be able to support myself through school with a co-op program, paid research, or work as teaching aide, but my school did not encourage me to seek these opportunities, and instead I focused on my studies. Now, I have little practical experience in my field, whereas I think such programs should be as essential a part of an education as taking courses and paying tuition or loans.
(Thanks as always for an informative and open program.)
what was the answer?
Our oldest daughter is about to graduate 100% debit FREE. No loans. It took a little longer but she did it. We did not help her AT ALL - it was done with scholarships & pay-as-you-go. Many do not consider this option.
At the same time my husband is laid off for the second time in 5-years and is going back to school. Unless he becomes a truck driver or other type job he is not going to receive ANY of the stimulas package. My income which does not cover our expenses puts us out of the "economic need" for Pell Grant level BUT we will be loosing our home if something does not open up for him job wise. We are to rich to be poor & to poor to be rich.
We will NOT take out a loan... we do not feel it is responsible. We are caught in a impossible situation.
What help is there for "elder students" such as my 55 year old husband? Not much!
I am currently a freshman in college and have already had to make the choice to stay in-state in order to afford college. Because of the lack of financial aid and my desire to do environmental work for non-for-profit, I had to forgo my dream school and stay in Maryland. But I was curious how FASFA actually works and where it gets it's numbers because when I filled out my form (and this goes for most of my friends as well), the number I got back as my EFC was about twice as much as what my parents could actually give. I know how the form works because I filled it out on my own, but where does the EFC come from?
QUESTION: What about students who have finished school already? I had to have my student loan refinanced so I could pay one lump monthly payment. I thought I was doing the right thing, but now I realize I am paying more than double what I really owe because of the astronomical interest. Does this bill help me at all??
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