Student loans

What President Obama’s Re-Election Means for Education

The race to the White House came to an end Tuesday night. President Barack Obama will be serving a second term as the President of the United States. During his 2012 election campaign, he promised to help America build a better education system and wanted America to have the highest promotion of university graduates in the world by 2020.

A few months ago, President Obama proposed a one billion dollar effort to help students excel in math and science, known as the Master Teachers Program. A group of elite teachers will be a part of the program and their salaries will increase by $20,000 in an effort to put the best math and science educators in front of our students. “I’m running to make sure that America has the best education system on earth, from pre-K all the way to post-graduate,” said President Obama during a rally in July. Only time will tell if the program will be implemented in schools across the country or not.

As reported by the HuffingtonPost, Jeffrey Henig, a political scientist at Teachers College, Columbia University, said, “It’s clear the Obama administration will continue to make education a priority.” Henig predicts President Obama will look to improve how academic performance is measured, like designing new assessments students take.

Since being elected in 2008, President Obama has stopped student federal loan rates from doubling and increased funding for Pell grants for students that need financial aid. Additionally, he has adjusted the federal student loan system so that repayments are based on income rather the amount a student has borrowed.

Karen White, political director at the National Education Association (NEA), said during President Obama’s second term she will expect him to focus on early education and college affordability.

Imran Apollo, a student at Wichita State University, comments on why he supported President Obama’s education views, telling us, “Obama wanted to increase the budget for Pell grants, which would increase taxes. Romney wanted to decrease taxes by increasing the requirements to qualify for Pell grants, thereby reducing the overall amount of aid. Romney also stated that increasing aid only encourages colleges to increase tuition costs. While this may be true, I still felt that many families, middle class in particular, would have had significant trouble paying for tuition were they denied Pell aid, or if they received reduced aid.”

Another Wichita State University student, Courtney Seddon, weighed in on the re-election and how it will affect education, telling us, “I think Obama’s re-election will give a lot of educational opportunities to the younger generation; programs like “Pay as You Earn” and debt forgiveness make the financial burden of higher education so much easier.”

The Obama administration’s new program, “Pay as You Earn,” will reduce the payment cap on loan payments from 15% of the borrower’s income to 10%, which will accelerate loan forgiveness from 25 years to 20 years.

Education is a big issue for the country. Americans have high hopes for our education system. During the president’s first term in office he had created new policies and programs to better America’s education system. He has made college more affordable for individuals and eased the financial burden for graduated students.

Also Read:

How Your Grad School Selection Impacts Your Future

Obama Highlights Education in Nomination Acceptance Speech

Lack of Education Apparent in Unemployment Rates



President Obama Visits College Campuses and Jimmy Fallon to Support Higher Education

President Barack Obama is gearing up to visit several university campuses across the U.S., and after his most recent Internet and radio addresses, we can be pretty sure of at least one thing he is going to be telling students. In what could be seen as an attempt to win himself some votes come November, Obama is presenting Republicans as opponents to affordable higher education.

“This is a question of values,” Obama said. “We cannot let America become a country where a shrinking number of people really do well while a growing number of people struggle to get by.”

One of Obama’s plans to keep education attainable is by extending a current law concerning federal student loans for low- to middle-income undergraduates. The current law is set to expire of July 1, 2012. If it does, interest rates on these popular student loans will double, forcing students to pay 6.8 percent instead of the current 3.4 percent. On average, this will cause an increase of $1,000 that each student will have to pay back on their loans. Read the rest of this entry »



Students at the College of the Ozarks Graduate Debt-Free

For many students, earning a college degree has one big drawback: you are more than likely to graduate owing several thousand dollars in debt on student loans that you had to use to pay for your education. However, there is one school in the nation where not a single student has to worry about this problem. It’s not because the school has a ridiculously low tuition price or that it is free. Instead, students at the College of the Ozarks are expected to trade working hours for their education.

Students at the College of the Ozarks, or “Hard Work U,” as the Wall Street Journal nicknamed it in 1906, work for 15-hours each week during the semester and then work two 40-hour weeks during breaks. In return, they graduate without owing a single penny.

“We want to give you an opportunity to pay for your education as you go, rather than carry large debts into your future,” the school’s ‘Welcome’ materials tell new students. “Your 15-hour-per-week campus job will help you develop professional working skills in areas like agriculture, computers, business, child development, construction, and more.” Read the rest of this entry »



College Grad Protests Sallie Mae Fees

student loansStudent loan borrowers are furious at Sallie Mae. The largest provider of student loans in the U.S. charges a $50 forbearance fee to unemployed borrowers. Those who can’t pay the $50 are put into default.

The unemployment fee has college grads and students fighting the system with a popular petition. With 50,000 supporters in all 50 states, the campaign at Change.org has the country listening.

Stef Gray, a student loan borrower through Sallie Mae and a recent grad from a public college, heads the campaign at Change.org.

“What Sallie Mae is doing is wrong,” Gray said. “My loan already grows by more than $1,000 in interest every three months when it’s in forbearance, and I pay almost 10% in interest because my parents weren’t alive to cosign my loans.”

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5 Ways to Pay Off Your Student Loans Faster

Newly-minted graduates are probably on cloud nine after they finish college. That is, until they receive their very first payment voucher for their loans. I remember the day when I picked up that dreadful Sallie Mae envelop from the mail box. I immediately did the math. If I paid the requested amount every month, it would take 12 years to pay off my loan.

I had no intention of making payments for over a decade, so I devised a plan that would have them paid off in half the time.

Here are five tips that will vanish your debt in no time:

Live like you did in college: Chances are, you lived on next to nothing in college. Keep that same mentality for the next year or so. When you find that your disposable income increases, you can put that money towards your monthly payment.

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Sallie Mae Reduces Rates on Student Loans

At a time when student loan debt is steadily on the rise, it’s nice to know that Sallie Mae is giving its borrowers a break, even if it is a small one.

Sallie Mae is decreasing its rates to 9.875 percent plus LIBOR, the rate of interest that banks can charge each other when competing for loans, in hopes of generating more business. After LIBOR, the change is merely a .5 percent rate reduction. Consumer analysts say it is unlikely that the new rate will bring in more borrowers.

Sallie Mae’s private loans, which carry higher interest rates than subsidized federal loans, are considered a last resort after scholarships, grants and government-backed loans. “This private student loan company is cutting interest rates to help bridge the gap when students and their families use up all other financial aid resources,” said Sallie Mae executive Charlie Rocha.

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Government Sues for Student Loan Repayment

Rising college tuition costs force an abundance of students to rely on Federal student loans. When it comes to repaying those loans, American borrowers are defaulting at an increasing rate. The United States Department of Education is taking action to get their money by suing persons who owe large loan repayments to the government.

“Defaulting” on a loan occurs when a borrower fails to make payments as determined by the loan agreement. This is different from “deferring” a loan; an option used by many students to postpone the repaying of a loan. It is not uncommon for student loans to come with a deferment option for a certain period of time. When deferment time is up and the borrower does not pay, the loan becomes “delinquent”. After a period of delinquency, the loan goes into “default”. When a loan defaults the lender has legal power to obtain their money. In the case of federal student loans the lender is the United States Government.

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How Americans Paid for College in 2010

College is getting more and more expensive every year. Considering the current economy, how are Americans continuing to pay for a product that is constantly increasing in price?

The authors of How America Pays for College 2010 tired of asking this same question over and over again, so they decided to conduct a survey to find out. They interviewed 801 students and 823 parents from across the nation and asked them various questions about how they finance a college education.

A vast majority, about 73 percent, said that they had to reduce their spending habits in other areas to pay for a college education. This shows a 17 percent increase from the 2008-2009 school year to the 2009-2010 year. Luckily though, 82 percent said that they strongly believe that a college education is an investment in the future and worth the sacrifice.

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Wells Fargo Forgives Student Debt in Death

Wells Fargo will pardon any student loan debt where the beneficiary dies or becomes permanently disabled, according to their new student loan agreement, released on Friday.

“When a death or permanent disability occurs, their future ability to repay is compromised,” said Kirk Bare , the head of Wells Fargo Education Financial Services. “We believe it is important to be responsive to events that affect these unique customers, and their ability to obtain financial independence and repay their loan.”

Before this new agreement, the co-signer had to pay back the loan under the circumstances. The student loan forgiveness program will be an addition to both existing and future Wells Fargo student loans.

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Jeopardy Winner to Use Prize Money for Student Loans

A Boston University student defeated her two opponents, one student from Yale University and another from Southern Adventist University, in the “Jeopardy! College Championship,” which aired last Saturday.

This is the first time a BU student has won the college championship, and Erin McLean, a sophomore, couldn’t be more elated. “I couldn’t even believe it,” she said in an interview.

Her victory got her a trophy, which she proudly displays on her desk and a $100,000 cash prize. She plans to use the cash to pay off her student loans. “I’ll be able to graduate debt free from BU, which is pretty amazing,” McLean said.

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