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Posts Tagged ‘loan forgiveness’

Student Loan Bubble?

November 6, 2011 Leave a comment

Here’s an interesting piece in the Huffington Post about whether student loans are really a bubble about to burst akin to the mortgage crisis.  I found this part particularly interesting:

First, one thing that’s important about the possible student loan bubble is that it poses much less of a threat than housing debt did to drag down the entire economy. Yes, many individual borrowers may find themselves in trouble. But total student loans probably amount to less than 10 percent of outstanding mortgages. Every single student loan could default and it still probably wouldn’t match total mortgage defaults during the recent downturn. More importantly, unlike mortgages, Wall Street isn’t knee-deep in securities comprised of bundled student loans, as it was with mortgages. (It also helps that it’s also harder to speculate in student loans; an investor can flip a house, but not a brain.)

If huge numbers of defaults on student loans would not significantly harm the economy, then, presumably, generous loan forgiveness would not either.  Read more…

CitiBank Offering 100% Loan Forgiveness on Silver State Helicopters Loans

November 14, 2008 3 comments

*Update – A commenter has provided a lot of additional information on this issue; I encourage readers of this post to check out the comments section. 

Michael Berger, one of the lawyers in the lawsuit against Silver State Helicopters Flight Academy, reported on his blog November 10th that one of the lenders in the case, Citibank, is now offering students 100% loan forgiveness on loans taken out to attend the now-bankrupt school in exchange for being released from future claims.  From his web-site:

On November 5, 2008, Citibank began offering 100% loan forgiveness of Citibank SSH student loans in exchange for an assignment of the student’s claims against SSH and against Citibank. We highly recommend that all of our clients with Citibank loans accept this offer. 100% Loan forgiveness has always been our highest goal for each and every one of our SSH clients. It is a complete victory for each and every one of our Citibank clients. It sets the bar high for KeyBank and Student Loan Xpress, the 2 other banks that wrote the majority of the SSH student loans.

I don’t know much about this case, but apparently Silver State had students pay tuition, approximately $70k, up front using loans that the school helped them arrange through private lenders.  The school wound up declaring bankruptcy in February of this year, leaving hundreds of students in the lurch.  Berger’s firm has been investigating whether there was collusion between the school and student loan lenders.

Jobs You Can’t Afford – Social Worker

November 10, 2008 Leave a comment

Social workers play extremely important roles in many sectors of society from working with abused children to counselling drug and alcohol abusers.  The pay isn’t great – over 20% of social workers make less than $30,000 a year – but social workers aren’t in it for the money; they’re in it to help people and to change lives. 

Unfortunately, the cost of the education necessary to become a social worker is rising even as salaries stagnate, making it increasingly difficult for caring people to choose this line of work.  In order to become a licensed social worker, most people must earn both an undergraduate degree and a two-to-three year graduate degree (MSW), which means significant debt.  Consider these statistics from the National Association of Social Workers:

  • Bachelor’s level social workers have an average loan debt of $18,609.
  • Master’s level social workers have an average loan debt of $26,777.
  • Doctoral level social workers have an average loan debt of $32,841. Read more…

Are You Eligible for the Public Service Loan Forgiveness Program? Who Knows?!?

November 4, 2008 Leave a comment

The Higher Ed Watch blog has a short discussion/analysis of the newly released Department of Education Final Regulations, which address the new Public Service Loan Forgiveness Program.  I’m still learning about this program myself, but from what I gather, the program does not make it clear up front who will be eligible for the loan forgiveness.  Borrowers could be working in low-paying jobs for up to TEN YEARS only to find out that they don’t qualify:

In its final rules, the Department did not commit to providing periodic confirmation notices to borrowers about their eligibility. Instead, the agency said that the onus will be on borrowers “to document” their eligibility over time. Department officials said that they do not want to provide borrowers “with a contractual right to the benefit,” as Congress may decide to eliminate the program in the future. Higher Ed Watch hopes that Congress will revisit this issue next year to insure that the program lives up to its promise.