studentaid

Education Department review clears loan companies of overcharging military members

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A year after U.S. prosecutors accused Navient of overcharging members of the military on student loans, Education Department review largely clears loan servicers of wrongdoing.

Democratic Bill on Pell for Prisoners

A group of six Democratic members of the U.S. House of Representatives on Thursday introduced legislation that would reinstate Pell Grant eligibility for incarcerated college students. Congress in 1994 banned the use of Pell Grants by prisoners in state and federal prisons. However, the U.S. Department of Education is expected to announce an limited waiver of the ban under the experimental sites program, sources have said. If that experiment is successful, it could help advocates make the case that Congress should drop the ban.

Representative Donna F. Edwards of Maryland led the group of Democrats in introducing the Restoring Education and Learning (REAL) Act on Thursday. Several advocacy groups support it, including the American Civil Liberties Union and the National Association for the Advancement of Colored People Legal Defense Fund.

County in Ohio Will Abandon College Savings Effort

Many experts on paying for college say it's essential to encourage families to start saving while their children are young. But Cuyahoga County, in Ohio, is moving to abandon a two-year-old program under which every kindergarten student received a $100 savings account, Northeast Ohio Media Group reported. Officials said too few families added to the accounts, so many felt the program wasn't working.

In San Francisco, where a similar program is based on a match of family contributions, CNN Money reported that low-income families have saved $1 million for college in the last four years.

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Education Department inspector general slams agency’s estimates of erroneous Pell Grant and student loan payments

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The Education Department's inspector general accuses department officials, in effect, of fuzzy math in calculating the rate at which Pell and student loan dollars were erroneously awarded.

Obama administration to propose new rules for campus financial products

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The Obama administration proposes new restrictions on campus financial products, sparking another round in the battle with banks and the financial services industry. 

Interest Rates on Federal Student Loans Will Drop

Millions of students and families will now pay less to borrow money from the federal government to finance college in the coming academic year.

Interest rates on federal student loans are set to drop by more than one-third of a percentage point following the U.S. Treasury’s sale on Wednesday of 10-year notes. Rates are reset each year based on the yield of the note set by that auction.

The interest rate on new loans for undergraduate students will drop to 4.29 percent from the current 4.66 percent. The cost of new direct loans for graduate students will fall to 5.84 percent from 6.21 percent.

Rates on PLUS loans for graduate students or parents paying their children’s college costs will also tick down to 6.84 percent from 7.21 percent.

The new interest rates for the 2015-16 academic year take effect on July 1. The changes do not affect borrowers with older loans. 

 

 

Current Rate

2014-15

New Rate

2015-16

Undergrad Direct Loans

Subsidized & Unsubsidized

4.66%

4.29%

Graduate Direct Loans

6.21%

5.84%

PLUS Loans

Grad PLUS & Parent PLUS

7.21%

6.84%

 

 

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Obama, Tom Hanks Push Free Community College

President Obama on Friday showered attention on community colleges and his plan for free community college. As graduation speaker at Lake Area Technical Institute, in South Dakota, he said he picked the institution to highlight its success in graduation rates and job placement rates, and related those statistics to the care of the faculty, quoting students about the support and guidance they receive. And President Obama plugged his proposal for free community college, arguing that Congress could easily endorse the concept and pay for it.

"If folks in Congress decided to make this a priority, we could do the next best thing and make community college free for an entire generation of young Americans, as long as they’re willing to work, keep their grades up, be responsible, graduate on time," President Obama said. "And we could pay for it by closing just one loophole for millionaires and billionaires. Just one. Just one tax loophole enjoyed almost entirely by very few at the top, we could offer a quality education to millions of middle-class Americans. It’s in everybody’s interest." The full text of the president's remarks may be found here.

Also on Friday, the White House released an email from the actor Tom Hanks, a community college graduate and already a supporter of the president's plan, describing how Chabot College changed his life, crediting specific faculty members and endorsing the free community college plan.

"I produced the HBO miniseries John Adams with an outline format I learned from a pipe-smoking historian, James Coovelis, whose lectures were riveting," wrote Hanks. "Mary Lou Fitzgerald's Studies in Shakespeare taught me how the five-act structures of Richard III, The Tempest and Othello focused their themes. In Herb Kennedy's Drama in Performance, I read plays like The Hot L Baltimore and Desire Under the Elms, then saw their productions. I got to see the plays he taught, through student rush tickets at the American Conservatory Theater in San Francisco and the Berkeley Repertory Theater. Those plays filled my head with expanded dreams…. Here's my bottom line, and it's simple: More kids (and adults, for that matter) should have this chance."

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$30M for Scholarships for Undocumented Students

Two gifts of $15 million each were announced last week to TheDream.US Foundation, which supports financial aid for students who lack the legal documentation to live permanently in the United States, The New York Daily News reported. The $30 million is believed to be the largest infusion of funds ever to help such students. The foundation works closely with the City University of New York, whose students have received half of the scholarships from the foundation. Financial aid is particularly important to undocumented students, as they are ineligible for federal aid. The donors are Donald Graham, former CEO of The Washington Post, and Bill Ackman, a hedge fund manager.

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Is Clinton Preparing to Propose Debt-Free College?

For weeks, there has been speculation that Hillary Clinton was preparing a plan to promote debt-free college. That speculation really took off Wednesday when Robby Mook, Clinton's campaign manager, referenced the idea in an interview with CNBC. Asked about how Clinton would appeal to younger voters, Mook said, “What voters are looking for in this election is someone who’s going to be a champion for everyday people. For young people that’s debt-free college, that’s finding that job after you graduate.” Representatives of Clinton's campaign declined to say to Politico that Mook's statement represented an official campaign endorsement of the policy, but said that Clinton would be releasing detailed proposals on paying for college.
 

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U.S. charts new debt relief process with implications beyond Corinthian

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A guide to the Education Department and Corinthian borrowers.

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