Results tagged “student loan” from EdLabor Journal

The USA Today highlighted some of the July 1st changes to the federal student loan program that lowered rates and made repayment easier.

But before you even think about a private loan, make sure you have maxed out on your federal student loans. Federal student loans have fixed interest rates and more flexible repayment terms than private loans. If you have trouble making payments after you graduate, the federal government offers several programs that provide relief (more on this later). Private lenders aren't required to do anything to help troubled borrowers.

All PLUS loans (Parent Loan for Undergraduate Students) are now issued through the Direct Loan program. Like Stafford loans, these loans were previously offered by private lenders, as well as through the Direct Loan program. The rate for Direct PLUS Loans is 7.9% vs. 8.5% for FFEL PLUS Loans. Parents can use PLUS loans to pay for any college costs that aren't covered through Stafford loans and financial aid. Graduate students are also eligible to borrow through the PLUS program.

Rates for subsidized Stafford loans, which are available to borrowers who demonstrate economic need, fell to 4.5% from 5.6%. This new rate will apply only to subsidized Stafford loans issued between July 1, 2010, and June 30, 2011, says Robert Murray, spokesman for USA Funds, a non-profit company that services loans. Rates on subsidized loans issued before July 1 won't change, he says. The rate for unsubsidized Stafford loans, which are available to all students, remains at 6.8%.

Origination fees for Direct Stafford loans dropped to 1% from 1.5% on July 1. Because the cost of the fee is deducted from the proceeds of the loan, the reduction will increase the amount of money available to pay your college costs, Murray says.

Additionally, the maximum Pell Grant increased to $5,500.

But current students aren't the only ones who benefit. There is help for graduates, too.

Other changes that took effect July 1 could provide relief for graduates who aren't making enough money to afford their loan payments.

The income-based repayment program allows federal student loan borrowers to have their loan payments reduced, based on income and family size. For most eligible borrowers, loan payments will be less than 10% of their income. Two updates to the program could lower payments even more for some borrowers:

Married couples will no longer be penalized. Previously, when couples filed a joint tax return, the program assumed that both spouses could use 100% of their combined income to make loan payments. In cases in which both spouses had student loans, the minimum payments were much higher than the minimum for unmarried borrowers with the same debt and income, says Lauren Asher, president of the Institute for College Access and Success. The new formula will take into account married couples' combined income and their combined debt to calculate minimum payments, Asher says.

Eligibility for income-based repayment will be based on the balance when the loan went into repayment or the current loan amount, whichever is greater. This will primarily benefit borrowers who have gone into forbearance or deferment, Asher says. These programs allow borrowers to temporarily suspend payments, but if interest accrues during the period, they end up with a larger loan balance.

Learn more about the July 1, 2010 federal student loan benefits.

Michelle Singletary at the Washington Post has an excellent column today about how students can be trapped in private student loans with no way out.

She writes:

"This was not a decision I made lightly," [Valisha Cooks] said. "Filing for bankruptcy was expensive and, most of all, humiliating. I was raised to work hard, pay my bills and be responsible." About $10,000 in other debt was erased. But not her student loans.

"Now, even though I have a good job, I can't afford to pay all my bills in any one month," Cooks told the [House Judiciary] subcommittee. "I go to food banks to feed my son, and I will never be able to afford a house." Like child support and tax debt, student loans are nearly impossible to eliminate in bankruptcy. You have to prove "undue hardship." That's a high hurdle to jump.

Before, the only loans that couldn't be canceled by filing for bankruptcy were federally backed student loans, as well as loans where nearly all the funds came from a nonprofit institution, according the National Association of Student Financial Aid Administrators. In the case of the federal loans, this made sense. The government backs the loans, and defaults are a direct hit to the federal budget, meaning we all pay for those who can't.

But in 2005, during a major overhaul of the bankruptcy code, private student loans were given an elevated status and thus couldn't be discharged. This didn't make sense. If we are going to have a fair bankruptcy system, private education loans should be treated the same as other private consumer debt. That's the risk lenders take, similar to the risk borne by providers of loans for cars, homes or other consumer purchases.

Lenders and opponents of this legislation argue that if people can erase their education debt, private loans for college will be tougher to qualify for and harder to get. There's a concern that people will get an education and immediately run to bankruptcy court to shed their loan obligations before they make big money.

I covered bankruptcy for years, and seldom did I see bankruptcy petitioners gleefully sitting in the corridors of a courthouse eagerly waiting to shirk their financial responsibility. People usually seek bankruptcy protection as a last resort. Besides, there is a test in place to prevent people from scamming the system.

Chairman Miller agrees with Ms. Singletary, which is why he's called for Congress to end special treatment for private student loan providers. "In 2008, the Democratic Congress took important steps to provide long overdue consumer protections for students when borrowing financially risky private student loans, but more needs to be done. Private student loans remain far more expensive for borrowers than federal student loans, and often carry tricky terms and conditions. Especially in this economy, private student loan borrowers deserve the same basic protections consumers receive when using their credit cards, buying a car, or paying their electric bill."

Gregory Cendana, President of the United States Student Association, wrote an op-ed in today's Hill about the overwhelming support for the Student Aid and Fiscal Responsibility Act by students:

Students overwhelmingly support the proposal. During the 2009 National Student Congress, student aid reform was unanimously passed as a top legislative priority for the United States Student Association, which represents over 4.5 million college students. Hundreds of student governments have subsequently adopted resolutions supporting the Student Aid and Fiscal Responsibility Act, and hundreds of thousands of students have contributed to a national “wall of student debt” with paper “bricks” exhibiting their personal and financial struggles to pay for college.

Those who are using the lending services to finance their education see the wisdom investing in the next generation rather than subsidizing banks.

We encourage you to read Cendana's entire op-ed as well as learn more about the Student Aid and Fiscal Responsibility Act as well as other groups that support the legislation.

The Washington Post editorial yesterday highlighted the value of the Student Aid and Fiscal Responsibility Act, calling it better student loans than the current option.

They fact checked two myths opponents are peddling and made a strong case for passage of SAFRA:

First, it's no government takeover. Opponents would make it appear as though Democrats want bureaucrats to destroy a functioning private market for federally backed student loans. In fact, the only reason any private company is in the business of originating such loans is because of government support, and propping up that artificial market is expensive. In the end, it's a better deal for taxpayers to have the government lend money directly to students. Private lenders, who want to preserve some role for themselves in the loan origination business, counter that they provide better services to students. But the government plans to farm out loan servicing to them through a process of competitive contracting.

Second, reconciliation, which removes the filibuster as an option and allows legislation to pass with a simple majority, has been on the record as an option for student loan reform for months. Since there can be only one reconciliation bill per budget year, the Democrats' move to add the education measure to health-care reconciliation should be no surprise. If there is a proposal tailor-made for reconciliation -- a procedure originally intended to help Congress rationalize the budget -- it is this plan to end a wasteful program of subsidies for private lenders.

Learn more about the Student Aid and Fiscal Responsibility Act.

Former Secretary of Education and current Senator of Tennessee, Lamar Alexander, published an op-ed in Sunday's Washington Post about the Student Aid and Fiscal Responsibility Act. Unfortunately, in his effort to explain why he is against something where "students are helped," Sen. Alexander gets his facts wrong.

The Wonk Room notes:

The op-ed has plenty of scaremongering about Washington takeovers and long lines for student loans, but it doesn’t acknowledge the simple fact that the government already makes millions of loans every year, in a process that does not look anything like waiting in line at the DMV. In fact, under SAFRA, student loan companies will still service and administer the loans, they just won’t take federal money and originate them. That money, instead of going to the compensation, advertising, and overhead of private companies, will be reinvested in Pell Grants and other education initiatives.

And Kevin Carey at the Quick and the Ed goes so far as to say Senator Lamar Alexander is Making Things Up regarding this bill.

In reality, getting a student loan through the Federal Direct Loan Program isn’t going be any different than it is for the millions of students who are already getting loans through the Federal Direct Loan Program, which involves filling out the same forms you use to get loans under the “give-banks-billions-of-free-taxpayer-dollars” program that Alexander is defending.

Alexander also alleges that the administration has been less than forthcoming about what’s really going on here:

Here is what they haven’t told us: The Education Department will borrow money at 2.8 percent from the Treasury, lend it to you at 6.8 percent and spend the difference on new programs. So you’ll work longer to pay off your student loan to help pay for someone else’s education — and to help your U.S. representative’s reelection.

It’s not a secret that the government will be lending money for more than that money costs. All lending programs work this way. The difference is that currently the money left over after paying people to administer the program is used to line the pockets of bank shareholders and executives whereas under Obama’s plan it will be used for Pell grants that benefit low-income students. Alexander’s contention that “you’ll work longer to pay off your student loan to help pay for someone else’s education” ignores the fact that many borrowers also receive Pell grants. Or attend the colleges that will receive grants to improve graduation rates, or have small children who will benefit from new investments in early childhood education. Alexander concedes that most people think such programs are a good idea. Otherwise, they wouldn’t help U.S. representatives get re-elected! He suggests that instead of subsidizing Pell grants, the federal government should use its unique ability to borrow cheaply to lend at extremely low rates, thus undercutting the private market for loans from companies that can’t raise money by issuing Treasury bonds. This, of course, would immediately be denounced as “socialism.”

Learn more about the Student Aid and Fiscal Responsibility Act and as well as some of the facts surrounding other myths about this bill.

Last night Chairman George Miller was on the ED show to talk about the Student Aid and Fiscal Responsibility Act.

Chairman Miller wrote the following letter to the editor in Sunday's New York Times.

“Industry Lobbying Imperils Obama Overhaul of Student Loans” (front page, Feb. 5) didn’t tell the whole story. In truth, lenders are fighting to save a system that allows them to reap billions in profits at the expense of students.

President Obama’s proposal would save taxpayers $87 billion — and redirect those funds to students instead of banks. It would make college more affordable without costing taxpayers a dime.

Lenders’ claims about job losses have proved overblown. This legislation would allow lenders to continue servicing all federal loans — ensuring high-quality customer services for borrowers and preserving jobs.

Lenders would compete for these contracts based on the quality of service they offer, including default prevention. In fact, two of the five performance criteria for current direct loan servicers — including Sallie Mae — are tied to default prevention.

It’s not news that lenders don’t like this bill, but college students overwhelmingly do. We can’t let their voices, or the points above, get drowned out by well-heeled lobbyists.

George Miller Washington, Feb. 8, 2010

The writer, a California Democrat, is the chairman of the House Education and Labor Committee and the author of the Student Aid and Fiscal Responsibility Act.

Learn more about why the original NY Times article was inadequate, as well as the Student Aid and Fiscal Responsibility Act.

Although today's hearing with the Secretary of Education, Arne Duncan, had to be postponed due to a blizzard in the Washington, DC area, that hasn't stopped him from making a persuasive case for passing the Student Aid and Fiscal Responsibility Act.

In the Washington Post:

Education Secretary Arne Duncan on Tuesday urged the Senate to overhaul student lending, asserting that the banking industry has had "a free ride from taxpayers for too long" and that executives with lending giant Sallie Mae have enriched themselves as borrowers rack up college debt.

"Working Americans pay while bankers get rich," Duncan said in a prepared statement. "Sallie Mae executives have paid themselves hundreds of millions of dollars in the last decade while teachers, nurses, and scientists -- the backbone of the new economy -- face crushing debt because of runaway college tuition costs."

In an interview with Huffington Post:

Duncan called the administration's plans to overhaul the student loan program by ending government subsidies for private lenders "a once-in a generation, maybe once-in-a lifetime" opportunity that Congress would be foolish to let slip away.

and in that same article, Chairman Miller said:

"I haven't found one [argument from Sallie Mae's lobbyists] that made sense yet," said Rep. George Miller (D-Calif.), chair of the House Education Committee. "We are now providing 88 percent of all the capital and over the next ten years we can save 85 billion dollars doing it a different way. And that money can be used to enhance the educational opportunities of millions of students in this country. It is a no brainer."

The Student Aid and Fiscal Responsibility Act (H.R. 3221) passed the House with a bipartisan vote of 253 to 171 on September 17, 2009 and is waiting in the Senate.

Reuters reports today that student loan demand is at a record high.

Unprecedented growth in student loans over the past two years is raising questions about whether a generation will be saddled with debt before it has even entered the workforce, according to data that the Equifax Inc credit bureau provided exclusively to Reuters.

The number of U.S. student loan accounts has risen 29 percent to 69 million over two years, according to Equifax, while balances have jumped by $105 billion to $527 billion.

"We've never seen this high student loan activity," said Dann Adams, president of Equifax's U.S. Information Systems.

The demand for student loans results from college graduates pursuing advanced degrees because of high unemployment. Also, parents' depleted savings mean more college-age children are forced to take on debt.

With this increase in student loans, students should know their loans are reliable and not subject to the whims of a volatile market. The Student Aid and Fiscal Responsibility Act would do just that for federal loans.

It would convert all new federal student lending to the stable, effective and cost-efficient Direct Loan program beginning July 1, 2010. All new federal student loans would be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy.

Given the Reuters' report it is rather unsurprisingly that the Chronicle of Higher Education reported today that the cost of college is a big worry of freshmen according to a national survey. The Chronicle on Higher Education says:

Financial concerns, from paying for college to job prospects, dominated the new-student experience in 2009, according to an annual survey on freshman attitudes.

About two-thirds of freshmen said they were either somewhat or very worried about their ability to finance their college educations. Those citing "some" concerns about money increased about two percentage points, to 55.4 percent, while students citing "major" concerns remained at 11.3 percent, about the same as in 2008.

The Student Aid and Fiscal Responsibility Act would invest the bill’s savings in making college affordable and helping more Americans graduate. It would invest $40 billion to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $6,900 by 2019. Starting in 2011, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index plus 1 percent. It would also strengthen the Perkins Loan program, a campus-based program that provides low-cost federal loans to students, by providing the program with more reliable forms of credit from the federal government and expanding the program to include significantly more college campuses. Finally, it would keep interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012.

Today Secretary Arne Duncan published an editorial in the Wall Street Journal stating that banks don't belong in the student loan business. He starts by considering if every program within the Department of Education helps students learn and if it is a good use of taxpayer dollars. He says that in the case of the Federal Family Education Loan Program (FFEL), the answer is no.

He says:

Under the current FFEL program, banks make loans to students. While those students remain in school, the federal government pays the interest on their loans; otherwise the interest accrues. Once the borrowers leave school or graduate, the lending agency collects on the loans. But if the student defaults, my department pays back the loan—plus the interest owed. The FFEL program, in short, is a great deal for bankers but a terrible one for taxpayers.

Secretary Duncan goes on to explain how the Department of Education would originate the loans, but private banks would service them. That is how roughly 80% of student loans are done today. He notes that those colleges who have already moved to the Direct Loan program report that it was quick and easy. With the $87 billion in savings, the reform would substantially increase scholarships in the Pell Grant program and other financial aid for low-income students. Additionally the reforms would start new programs to raise college graduation rates and strengthen our community colleges.

We encourage you to learn more about the Student Aid and Fiscal Responsibility Act and to read Secretary Duncan's editorial.

Unlike the Wall Street Journal Op-Ed, which completely missed the perspective of students, about the Student Aid and Fiscal Responsibility Act, OregonLive.com, Oregon's leading online news source, published a student's opinion.

Getachew Kassa, a student government officer at the University of Oregon and a USSA board member, wrote about how his university and state would be positively impacted by SAFRA in this editorial.

Mr. Kassa wrote:

Here in Oregon, the Legislature has severely cut funding for higher education over the last decade, and the Oregon Opportunity Grant received a reduction of over $10 million. Mitigating economic shortfalls on the backs of students by shifting the cost of college away from the state and onto working families is a shallow solution to a deep financial problem. Instead, the government should be investing in students, ensuring that Oregon helps meet President Barack Obama's goal of having the United States produce more college graduates than any other country by 2020.

The U.S. Congress is doing its part to meet this ambitious aim by passing the Student Aid and Fiscal Responsibility Act, a landmark bill that makes the greatest higher education investment in American history. This legislation, which was passed by the House of Representatives on Sept. 17, eliminates the Federal Family Education Loan Program, a wasteful government program that subsidizes private lenders to issue student loans. By cutting out banks as the unnecessary middle man, the federal government will save an estimated $87 billion over the next 10 years that will be allocated to student-friendly, need-based aid and essential access and retention programs at no new cost to taxpayers.

Learn more about the Student Aid and Fiscal Responsibility Act and read what others are saying about this necessary reform.

Pittsburgh Post-Gazette ran a favorable editorial yesterday about the Student Aid and Fiscal Responsibility Act. Unlike the Wall Street Journal's editorial yesterday, the Pittsburgh Post-Gazette focused on how this bill will make college more affordable for students.

This bill would take the middle man - banks and private lenders - out of federally guaranteed student loans. Right now, the U.S. Education Department makes some student loans directly, but the rest - worth millions of dollars each year - are made by private lenders, who then receive government subsidies for doing so. Eliminating those payments will save $87 billion over 10 years, according to the Congressional Budget Office, so the bill will pay for its other provisions.

More help then will be available to more students. Over the next 10 years, $40 billion would be invested in building up the government's Pell grants, need-based scholarships that do not have to be repaid, so the maximum award available could go up annually, to keep pace with rising college costs.

The bill also would allow an additional $6 billion for Perkins low-cost, low-interest loans, thus reducing the number of students who would have to take out private educational loans, which have higher interest rates.

Investing savings into increasing Pell grants and Perkins loans is only one part of this reform. Learn more about additional investments in community colleges, early learning, energy efficient schools and deficit reduction in the Student Aid and Fiscal Responsibility Act.

Today the Wall Street Journal Opinion section missed the boat about the bipartisan effort to transform the way federal student loan programs operate via the Student Aid and Fiscal Responsibility Act. For example, they claim that this reform is a government takeover of student lending. The fact is that the federal student loan programs are already a federal program, established and subsidized by the federal government.

CLAIM: “The pending bill, which has passed the House but is stalled in the Senate, would ban private lenders from making federally guaranteed loans after July 1, 2010.”

FACT: The financial crisis has already caused many lenders to leave the federal student loan programs, leaving many students in a bind. The Direct Loan program provides the same low-cost loans to students as FFELP, with the added benefit of complete reliability, even in an economic crisis. And the bill will foster competition among lenders by allowing private companies to compete for bids to service these loans – ensuring that contracts are awarded to lenders who offer the best customer service and innovations for borrowers. This is competition that will help students and build on the best of what private industry can offer to borrowers.

The Philadelphia Inquirer ran an editorial earlier this week highlighting the increasing debt students take on while paying for college. They singled out the reforms under the Student Aid and Fiscal Responsibility Act passed by the House of Representatives in September as being key to reducing that debt.

The Philadelphia Inquirer said:

The bill that was passed by the House in September would provide about $80 billion over 10 years for President Obama's education initiatives. About $40 billion would go to the federal Pell grants program, which provides scholarships for low- and moderate-income students.

...

Community colleges would get as much as $12 billion to help prepare a more skilled workforce. At a time when many two-year colleges have seen their funding slashed, the additional funding would provide for job training and capital projects on campuses.

Nationally, community colleges enroll more than six million students. Many, including those in the Philadelphia region, have seen tremendous enrollment growth during the recession and also need additional funding.

Obama's education plan would also pour about $8 billion into early childhood programs, which in recent years have taken a backseat on the public-education agenda. America's historically black colleges and universities would also get $2.5 billion.

We encourage you to read the entire editorial, learn more about the Student Aid and Fiscal Responsibility Act and join the Facebook page.

Today, the Project on Student Debt released a report, “Student Debt and the Class of 2008,” providing state-by-state data on the amount of debt college students amassed. Overall, it found that "student debt continued to rise even as it got harder for recent graduates to find jobs, and that debt levels vary considerably from state to state and college to college. Nationwide, average debt for graduating seniors with loans rose from $18,650 in 2004 to $23,200 in 2008, or about six percent per year. State averages for debt at graduation in 2008 ranged from highs near $30,000 to a low of $13,000. High-debt states are concentrated in the Northeast, while low-debt states are mostly in the West. At the college level, average debt varied even more, from $5,000 to $106,000. Colleges with higher tuition tend to have higher average debt, but there are many examples of high tuition and low average debt, and vice versa."

As Committee Member, Dina Titus of Nevada, says, “A higher education is vital to the future success of our nation’s young adults, and in order to attract good jobs of tomorrow to Nevada, we must have an educated workforce that is prepared to get the job done. The actions the House has taken this year will go a long way toward lowering the cost of college and reducing the burden on our students and their families.”

So far this year, the House of Representatives has taken a number of steps to bring down the cost of a college education and reduce the amount of debt students and their families face. In September, the House passed the single largest investment in aid to help students and families pay for college. The Student Aid and Fiscal Responsibility Act reforms the federal student loan system, saving taxpayers $87 billion. Of that savings, $10 billion goes toward deficit reduction and $77 billion goes toward making college more affordable through investments in Pell Grants, college access and completion support programs, and community colleges.

On July 1, a number of new benefits took effect to make college more affordable. Interest rates on subsidized federal student loans decreased from 6 percent to 5.6 percent. This was the second of four annual cuts to this rate, and it will continue to drop until it reaches 3.4 percent in 2011. Under the Income-Based Repayment program, borrowers’ monthly loan payments can be capped at 15 percent of their discretionary income.

Finally, as part of the American Recovery and Reinvestment Act passed by Congress in February, the maximum Pell Grant Award was increased by $500 to $5,350 for 2009-2010 and to $5,550 for 2010-2011.

CNN highlights a report (PDF) by The Project on Student Debt that found "an increasing number of college students are turning to private loans -- one of the riskiest ways to pay for schooling." Additionally, "of those who borrowed privately, [they] did not take full advantage of what it called safer and more affordable federal loans."

Private loans are often riskier because they have variable interest rates and cannot be discharged via bankruptcy. Nor are they eligible for payment deferments, loan forgiveness programs or income-based repayment options, like those that began on July 1, 2009.

Americans need affordable, quality education opportunities to help make our economy strong and competitive again. President Obama has identified an opportunity to make historic investments in our economic future by improving early education opportunities and making college dramatically more affordable – and all at no cost to taxpayers.

The Student Aid and Fiscal Responsibility Act would do just that:

• Invests $40 billion to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $6,900 by 2019. Starting in 2011, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index plus 1 percent.
• Strengthens the Perkins Loan program, a campus-based program that provides low-cost federal loans to students, by providing the program with more reliable forms of credit from the federal government and expanding the program to include significantly more college campuses.
• Keeps interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012.
• Converts all new federal student lending to the stable, effective and cost-efficient Direct Loan program. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy.
• Provides all federal student loan borrowers with upgraded, modern, state-of-the-art customer service. Rather than force private industry out of the system, the bill will forge a new public-private partnership that provides all borrowers with the highest-quality customer service when repaying their loans and maintains jobs. It will establish a competitive bidding process that allows the U.S. Department of Education to select lenders based on how well they serve borrowers, educate them financially, and prevent loan defaults. It will provide a role for non-profits to continue servicing student loans.

We encourage you to learn more about the Student Aid and Fiscal Responsibility Act, read CNN's article and The Project on Student Debt's report (PDF).

While highlighting some of the other benefits that started yesterday, both the Washington Post and the Daily Texan pay specific attention to the public service loan forgiveness program under the College Cost and Reduction and Access Act.

The Washington Post explains how this benefit works:

Under the Public Service Loan Forgiveness Program, the Obama administration announced yesterday [although this provision was enacted 2 years ago by Congress], people with student loans can have their debts erased after 10 years of public service. Let's say Dr. Feelgood graduates from medical school with a mountain of student loan debt. Her heart, and a little angel on one shoulder, tell her to work in a clinic serving a low-income community on tribal lands, but that little devil on her other shoulder says to become a plastic surgeon in Beverly Hills. And the little devil is holding her empty pocketbook as evidence to back his case.

If the doctor follows her heart and makes 120 payments -- one a month for 10 years -- on her student loan, Uncle Sam will tell her to forget the rest of the money she owes.

and the Daily Texan speaks to a student who will benefit from the new provision because she is entering public service.

Elisheba Evans, a former UT English student who transferred to the University of North Texas, is paying off her UT-Austin student loans.

She said the program’s forgiveness clause will benefit her in her career choice as a science teacher.

“It’s good that there is a system in place to reward people going into [public service] because you aren’t making that much at all,” Evans said.

Learn more about public service loan forgiveness (pdf) and read other blog posts on the benefits from the College Cost Reduction and Access Act.

Today new benefits go into effect that will make monthly student loan payments more manageable and affordable for millions of students and borrowers struggling to stay afloat in this tough economic climate.

These benefits were enacted as part of the College Cost Reduction and Access Act, a law I sponsored in 2007 that made historic investments to help more Americans earn a college degree. With the economy against this year’s college graduates, this relief couldn’t come at a better time.

Jonathan Glater has an article in today's New York Times about the good news for college students and graduates starting on July 1st. The new benefits include lower interest rates on federally student loans and an option to lower monthly payments based upon one's income (see video below).

“These benefits are guaranteed, no matter what happens in our economy, and are kicking in at exactly the right time for millions of Americans,” said Representative George Miller, Democrat of California and chairman of the House education committee.

See Chairman Miller's complete statement here.


Source: IBRinfo.org

Today's Bangor Daily News has an excellent editorial about the Obama administrations efforts to simply the FAFSA (Free Application for Federal Student Aid) form. Some changes will be immediate, while others will be phased in over the next several years. Rather than wait weeks, students will now be able to see estimates of Pell Grant and other student loan eligibility immediately. The number of questions will be reduced by about 20% to 150 and starting in January, for students who choose, they will be able to import relevant tax information from the IRS.

“Confusing paperwork shouldn’t stand between qualified students and a college degree,” said Rep. George Miller, a California Democrat who is chairman of the House Committee on Education and Labor. A law passed last year helped, creating a two-page form for some low-income families.

We encourage you to read the entire editorial and to learn from the Department of Education.