Before, During, and After College: Know Where the 2020 Candidates Stand on Student Loans!

Are you one of the 42.6 million Americans owing over $1.5 billing in federal student loans? Is there a chance you’ll need to join these ranks in the next few years because you need to borrow such loans for your postsecondary education? If so, understand that November’s “election may be the most consequential election in history for student loan borrowers.” But don’t take our word for it. Read this article from Forbes Senior Contributor Adam Minsky:

For Student Loan Borrowers, The 2020 Election Has Unprecedented Implications

Minsky is correct — federal student debt is today’s biggest college affordability issue, and much is riding on the outcomes of this year’s election for what you have or will borrow from your government. So you need to know where the candidates for President, the U.S. Senate, and the U.S. House of Representatives stand on issues of postsecondary debt.

How do you find a candidate’s positions? A good place to look is the candidate’s campaign website. It’ll probably have an “issues” link to the candidate’s positions on different matters, hopefully including student loans. So, first, Google the candidate by name.

If the campaign website doesn’t address student loans, look at the candidate’s official government website if he or she’s an incumbent. You can find the White House website here, your Senator’s website here, and the website for your current Representative in the House here.

Still can’t find anything on student loans? Send the candidate an email or call the candidate’s office, whether it’s the official government office of an incumbent or the campaign office of a challenger. The same websites you use to research their positions should also have their email addresses and phone numbers.

Make sure you’re registered to vote, and vote in the November 3 election. But do so after you study up! There’s so much going on in this country right now, and it’s OK if you don’t want to select the candidates for which you’ll vote based solely on student loan issues. Still, you have every right as an American to support candidates who’ll work in your best interests. Exercise that right!

College Affordability Solutions will return to its regular, every Wednesday publishing schedule again on August 19. But if you need information or guidance on an issue related to paying less for high-quality postsecondary learning, feel to contact us at (512) 366-5364 or collegeafford@gmail.com. And remember, we never charge future, current, or past students — or their parents — for consultations.

Before, During, and After College: Urge Congress to Pass More Generous Student Loan Repayment Rules to Improve Our Economy!

Congress is negotiating about another economic stimulus bill. This one may include something far beyond anything previously done — widespread student loan debt forgiveness.

When it became law in March, the federal CARES Act postponed interest charges and monthly payments on every student loan debt any American owes to the U.S. Education Department (ED) through this coming September 30. But many were disappointed that it didn’t include a plan to forgive $10,000 of what each borrower owes ED, and that it was silent on private student loan debt relief.

Of course, address those issues would be great for 45 million borrowers owing $1.6 trillion in student loan debt — shrinking what they owe, allowing them to eliminate college debt faster, and giving them have more money to spend each month. But helping 45 million consumers have more to spend would also be an economic stimulus benefitting all Americans in these troubled financial times.

So the U.S. House of Representatives passed the HEROES Act, another stimulus bill. This Act would eliminate $10,000 in student loan debts owed to both ED and private lenders.

The HEROES Act would also:

  • Expand the postponement of interest charges and required payments to all federal student loans, including those not currently owned by ED; and

  • Extend the end date for the postponement of interest charges and required payments on federal student loans to September 30, 2021.

Almost all House Democrats, but just one House Republican, voted for the HEROES Act. But bottled up in the U.S. Senate, just like over 500 other bills the House passed in the last 18 months. Still, Democrats and Republicans keep trying to negotiate a new stimulus bill that both parties could support. To pass the House, this bill may have to include some kind of student loan forgiveness.

And while he hasn’t specifically endorsed student loan forgiveness, Senate Majority Leader Mitch McConnell has reportedly said he’s for anything that would help the economy recover. McConnell also says the next stimulus bill will be the last stimulus bill considered by this Congress. He’s probably right, since a month-long August recess plus fall campaigns are fast approaching.

Now’s the time to exercise your right to call and email your U.S. Representative (here) and Senators (here) to express your views. You can also sign a MoveOn.org petition (here) that already has a million signatures urging Congress to stimulate the economy by canceling student debt.

Whether you support student loan forgiveness and other HEROES Act provisions to help yourself, to help stimulate our nation’s economy, or both, now is the time for you to act!

Need help managing your college debt? Put 42 years of student loan expertise to work for you by arranging for no-charge consultations with College Affordability Solutions. Call (512) 366-554 or email collegeafford@gmail.com.

During College: Courses at Your Nearby Community College Can Enrich an Otherwise Lost Summer

This summer, many university students are taking classes at their local community colleges. You may want to join them so you, too, can make the summer a plus instead of a minus.

Maybe that dream summer internship you were offered got cancelled because of coronavirus. Perhaps your experience-building, well-paying job from last summer fell through for similar reasons. Possibly you’ve been aggressively seeking summer work, but can’t find any in this, the greatest economic crisis since the Great Depression of the 1930s. Or maybe you canceled plans to attend your 4-year college or university this summer after a frustrating spring of online classes taught by instructors who struggled to digitize teaching they’d been doing face-to-face for decades.

Whatever the reasons, you face a choice this summer — sit around until your university classes resume, or salvage something positive out of what could otherwise be the “lost summer” of 2020. Taking classes at your local community college is a way to do this. Here’s how:

  • Cost Savings: You may not qualify for financial aid as a summer-only community college student but, hey, on average, community college tuition and fees are just 37% of those at public universities and only 10% of what private universities charge. And by attending your local community college while at home, you’ll probably avoid room and board expenses, too.
  • Transferable Courses: Don’t pay for anything that doesn’t help you make progress toward your bachelor’s degree. So carefully scrutinize available classes and consult with academic advisers at your community college and university, then take classes that’ll be accepted in transfer by the university. These may not fulfill requirements for your major because universities are sometimes reluctant to graduate students whose career-specific courses weren’t taught by their own faculty. But if you still need classes to fulfill your institution’s general degree requirements, or to complete prerequisites, take them at your community college and transfer the credits.
  • Online Courses: Are your community college’s courses online? Don’t let this put you off. These schools have provided distance education to almost 25% of their students since 2007-08, and they’ve long had heavy commitments to developing their online faculty and infrastructures, unlike some universities that went online as an emergency in March.
  • It’s Not Too Late: But your community college’s already started teaching summer classes. OK. Most community colleges divide summer into at least two terms, so register for two or three courses in the second of those terms.

Don’t let this summer go to waste! Use classes at your community college to get your bachelor’s degree cheaper, faster, and maybe even with higher-quality learning experiences than you’d otherwise enjoy.

Use the Topical Index on the College Affordability Solutions website to find a wide variety of strategies for before, during, and after college to help make your postsecondary educational costs more manageable.

Before and During College: Federal Direct Loan Interest Rates To Be Lower for 2020-21

More than 87% of all postsecondary student loans come from the Federal Direct Loan Program (FDLP), and interest rates on these loans will soon be lower. FDLP interest rates on loans made for enrollment periods beginning on or after July 1, 2020 and through June 30, 2020 will be:

Undergraduate Students

  • FDLP Subsidized Loans = 2.75%
  • FDLP Unsubsidized Loans = 2.75%
  • FDLP Parent PLUS Loans = 5.30%

Graduate and Professional Students

  • FDLP Unsubsidized Loans = 4.30%
  • FDLP Graduate and Professional Student Loans = 5.30%

FDLP Loan interest rates are fixed for the life of each loan, meaning you’ll never pay a higher or lower interest rate as long as you still owe any portion of the loan. For example, if you have FDLP Loans for enrollment periods beginning July 2019 through June 2020, those rates will continue to be 4.53% for undergraduate student Subsidized and Unsubsidized Loans, 6.08% for graduate and professional student Unsubsidized Loans, and 7.08% for PLUS Loans.

FDLP interest rates are set annually based on formulas in federal law. College Affordability Solutions will keep you posted as they get reset each year.

Follow the College Affordability Solutions website for weekly articles such as this and about financial strategies for you to use before, during, and after college.

Before College: If You Must Borrow For Your Education, Don’t Do So To Attend For-Profit Schools!

We recently warned you to be careful regarding for-profit postsecondary schools. Now another warning — if you need loans to pay your postsecondary expenses, we believe you should not go to for-profit schools. Here’s why . . .

Some for-profit schools are good, ethical businesses. But most students found to have been swindled by postsecondary schools attended for-profit schools. In fact, banks and states generally won’t make student loans at for-profit schools at least in part because their fraudulent practices undermine debt repayment. Therefore, your only option for borrowing to attend for-profit schools is usually the Federal Direct Loan Program (FDLP).

The U.S. Education Department (ED) decides which schools get into the FDLP. It then oversees those schools to protect students and taxpayers. But ED sometimes does these jobs poorly, especially in the for-profit sector, which many believe is also poorly regulated by states.

Therefore, Congress passed a law many years ago requiring ED to cancel FDLP debts owed by students who were suckered by postsecondary schools, and holding schools owners liable for the government’s losses from such cancellations. The law also empowers ED to make regulations regarding such cancellations.

Last September, under Education Secretary Betsy DeVos, ED published regulation changes that have been criticized for undermining your ability to have your FDLP debts cancelled if your school conned you. These changes affect FDLP Loans with first disbursements on July 1, 2020 or later.

Specifically, FDLP cancellation will become harder and maybe even impossible to get because the regulatory changes will require students to:

  • Prove schools knowingly misrepresented the students’ educational programs, costs, or outcomes — something that’ll never happen without sworn statements from school employees;
  • Prove misleading school acts financially harmed them in ways going beyond their FDLP debts;
  • Provide individualized proof that schools mislead them — ruling out proof state attorneys generals and others obtain about schools misleading groups of students — even though few students can afford their own individual attorneys and investigators to get such proof; and
  • Apply for loan cancellation within three years of leaving their schools — instead of whenever they realize their schools ripped them off.

Both houses of Congress passed a joint resolution that even 20% of Senate Republicans supported to stop these changes. But President Trump, who in 2016 reportedly spent millions to settle lawsuits brought for 6,000 students who’d attended his for-profit school, vetoed the resolution last Friday. And there aren’t enough votes for Congress to override Mr. Trump’s veto.

So, student loan borrowers, College Affordability Solutions must advise you to skip for-profit schools no matter how good they sound. Instead, attend community colleges, state technical schools, or traditional public or private nonprofit universities with good, long histories.

Comparing different postsecondary schools? Want some help analyzing and matching up their costs? Contact College Affordability Solutions at (512) 417-7660 or by emailing collegesfford@gmail.com to arrange a free consultation!