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President Obama will issue an executive order today that is designed to protect veterans, servicemembers, and their families from deceptive marketing practices by educational institutions that target them for their federal education benefits, the White House announced.
KeyBank will now take a case-by-case approach in deciding whether to collect when a student loan debtor dies, almost certainly a response to a Change.org petition that criticized the lender for not forgiving tens of thousands of dollars in loans made to a late Rutgers University student.
Inane politics aside, what's frustrating about this issue is how little it matters in the scheme of college affordability. Yes, a few million students might have to pay more on their college debt if Congress doesn't act. Given the state of the economy, and how particularly unkind it has been to young graduates, it's probably worth it to give students a break, at least for another year. But whether or not it happens, this is a sideshow, a distraction from the deeply ingrained problems influencing college costs.
When students get into college, they often don't know how much they're paying or where exactly the money is coming from. They're in the dark. What do institutions do about this? Well, that's where it gets a little strange. The world of higher education is a sort of twilight zone where institutions can choose to explain or not explain their real price versus their sticker price, or disclose all the combinations of government and institutional loans, scholarships and grants that students can receive to pay for it.
Today's twentysomethings hold an average debt of about $45,000, which includes everything from cars to credit cards to student loans to mortgages, according to a PNC financial independence survey released last month. Unemployment for those 18-29 is 12.4%, well above the national rate of 8.2%; and young people face an increasingly complex global economy that is credit-driven and puts more responsibility on individuals to plan for and manage their retirement accounts.
A growing number of public universities are charging higher tuition for math, science and business programs, which they argue cost more to teach — and can earn grads higher-paying jobs.
For years and decades, the Department of Education knew that on average, federal student loans were being defaulted at a rate of about 1 in 4. Yet, the Department never bothered to issue so much as a warning to the public. In fact, examining year after year of press releases from the Department reveals quite the opposite. Instead of sounding alarm bells about the default rate, the Department chose to release only pleasant sounding “cohort default rate” data which vastly undercounts the true, lifetime default rate.
Every few weeks now a petition pops up in my Facebook newsfeed urging the government to forgive all student debt. The comment from the person posting the petition usually goes something like this, “Guessing this will never happen, but can’t hurt to sign on!”
President Obama's tuition tax-credit program has benefited more upper-middle class families than previous programs did, says a new report from Education Sector, a nonpartisan think tank for education reform.
After defaulting on her federal student loan, Karla De La Torre entered into a "rehabilitation" agreement with the collection agency and made the required nine on-time payments toward the debt. According to the agreement, her loan was supposed to be restored to good standing last September.
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