The newspaper obtained documents it said were described as a “near-final” version of the forthcoming budget by a Department of Education employee. The department’s spokeswoman Liz Hill told the Washington Post that the budget numbers were “preliminary” until officially released next week.
“Too many struggling borrowers fall through the cracks in a broken, outdated student loan system”, CFPB Director Richard Cordray said.
The legislation introduced in the Senate and House would allow those with outstanding student loan debt to refinance at the interest rates offered to new federal borrowers in the 2016-2017 school year.
A program that forgives the debt of government and non-profit workers after 10 years would be eliminated, as Trump hinted at in a campaign speech last October.
Under the program, the first set of student borrowers will be eligible to get their loans waived towards the end of 2017. But the Government Accountability Office has estimated that as many as a quarter of USA workers could qualify based on the definition of eligible jobs. At this point it’s unclear if the Trump Administration could affect the program for those who are already enrolled or if it would only shut down the program moving forward. A lawsuit filed in December claims four borrowers were misled into believing they qualified for the program.
Currently, the interest rate for undergraduate students is 3.76 percent.
The motive behind encouraging the public schools to adopt a more choice-friendly policy, as Trump has said, time and again, is to reduce the role of government and increase the participation of parents when it comes to choosing their children’s schools.
As long you don’t qualify for some form of forgiveness, it’s better to pay off the federal PLUS loans first to save yourself from throwing more money at interest than at principal. Student loans, however, are not free money and frequently, the college years go by much quicker than students anticipate. Almost 1.2 million borrowers defaulted in the past year.
As mentioned above, if you have federal student loans, you need to apply for a Direct Consolidation Loan via the Federal Student Aid website. Her legislation to reinstate year-round Pell Grants for college students in MI and across the country was recently signed into law as part of the government spending bill.
The new rates track closely with projections from the Congressional Budget Office, which anticipated rates to top 6 percent on undergraduate loans, 7.5 percent on graduate loans and 8.5 percent on PLUS loans by 2018. That way, students can take a full load of courses year-round, earn a degree faster and avoid taking on a lot of student debt.
The biggest and sometimes costliest mistake is trying to pay off student loans immediately.
Some private loan rates will start out very, very low to convince you to sign on, but in the years after, the loan rate could double or even triple.
The consumer bureau says slipshod loan servicing-the business of counseling borrowers on their options and sending them monthly bills-is largely to blame.
In addition to the cessation of the Public Service Loan Forgiveness program, the proposed budget also slashes or completely eliminates funding for college work-study programs, mental health services in schools, after-school programs, arts education programs, programs for gifted students, worldwide language programs, organizations that provide childcare to parents in school, career and technical education, and Special Olympics education programs, among many others. While money for subsidized and Perkins loans will be reduced, the proposal calls for additional money for unsubsidized loans.