Student-loan Straitjacket

Nelson did not even know her $22,000 loan had ballooned to more than $30,000 until FOX 4 sat down with her. She put her loan in deferment while working on her master's degree in criminal justice. "The interest here. is so high, it seems like I will be paying this until the day I die," Nelson said. Nelson may be right. She pays about $145 a month, but her loans are now about $66,000. With a 6 percent interest rate, even if she more than doubles her payment to $331, it will take her 98 years to pay it off, and she'll pay more than $300,000 in interest. Source:

Since younger households tend to be poorer, reduced rates and lower payments might translate into higher consumption levels, given their marginal propensity to consume relative to other households, Chopra said. Sen. Sherrod Brown (D-Ohio) and Sen. Kirsten Gillibrand (D-N.Y.) have introduced legislation that would allow borrowers with expensive debt to refinance into cheaper loans. Chopra's warnings about the student debt market come as legislators and the Obama administration begin negotiations on reauthorizing the nearly 50-year-old Higher Education Act, the federal law governing how tens of billions of taxpayers dollars are annually allocated toward higher education. With education-focused interest groups and policy experts set to debate key aspects in the coming months, Chopra urged financial regulators and bankers to make their views on student debt known if they wish to deal with what he described as a repayment problem, among other issues. Source:

The $41.3-billion profit Post to Facebook Government books $41.3 billion in student loan profits on Incorrect please try again A link has been posted to your Facebook feed. Sent! A link has been sent to your friend's email address. 161 To find out more about Facebook commenting please read the Conversation Guidelines and FAQs Government books $41.3 billion in student loan profits David Jesse, Detroit Free Press 1:32 p.m. EST November 25, 2013 Figures come as concerns mount about growing loan debt for students, graduates. Education Secretary Arne Duncan speaks at Malcolm X Elementary School in Washington. Source:

The mortgage-style loans, which were taken out by students who began courses between 1990 and 1998, have been sold to a debt management consortium for 160 million. Universities Minister David Willetts said the private sector was best placed to collect the outstanding debt Credit: PA Wire Universities Minister David Willetts said the move represents "good value for money", and would enable the Student Loans Company to concentrate on administering more recent loans. NUS president Toni Pearce said it was "extremely concerning" that the public would be subsidising a private company to make a profit from public debt. More top news Source:

In it, he urged the division to allow borrowers to keep making full payments on student loans through a loophole already used by a handful of judges and trustees. A spokeswoman for the U.S. Trustee Program declined to comment on his suggestion. Democratic lawmakers, including Mr. Durbin, earlier this year floated legislation to allow private student-loan debt to be discharged in bankruptcy. However, the proposal doesn't address federal loans, the bulk of outstanding student debt, and doesn't clarify Chapter 13's repayment rules. Source: