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Student Debt/Credit Cards

For-profit school ads mislead mothers Marketplace July 26, 2010 The ads often have distracting animations and the promise of an education program from the Obama administration specifically for single moms. Untrue, but the ads aren't necessarily the faults of the schools that they advertise for, but the "lead generators" that they employ to advertise for them.

A boom in for-profit colleges may be a bust for taxpayers and students Los Angeles Times July 25, 2010 For-profit colleges are booming as the unemployed turn to education, but some members of Congress and Obama administration officials say they are growing at the expense of taxpayers and that students are often exploited.  Investigators believe a high proportion of students drop out, and those who do graduate find their money wasted because their programs are not accredited. Students at for-profit colleges borrow more and are more likely to default on their loans, furthering taxpayer losses.

Why Do You Think They're Called For-Profit Colleges? - Commentary Chronicle of Higher Education July 25, 2010 For-profits fill a void left by traditional institutions that once believed their world was constant. Fast-developing methods of teaching students over the Internet have given the velocity of change a turbo boost. In such a volatile situation, all kinds of unexpected people make their way into the picture. And once they get there, they tend to stick around. Traditional institutions hoping that Congress will rid them of for-profit competition will very likely be disappointed.

Obama Cracks Down on For-Profit Colleges, Links Loans to Income Bloomberg.com July 23, 2010 Today the U.S. government relaxed a proposal governing the industry's access to federal student aid.The rules proposed today would give companies the option of showing that at least 45 percent of students are paying down principal on their loans, and, under some circumstances, would allow them to go on a "restricted" status rather than becoming ineligible for grants.

Splitting the Difference on Gainful Employment Inside Higher Ed July 23, 2010 The U.S. Department of Education today released its long-awaited proposed regulations to define "gainful employment," the mechanism that makes non-liberal arts offerings at for-profit colleges eligible for federal financial aid. Striking a middle ground between aggressively attacking for-profit higher education and backing down under the sector's intense lobbying pressure, the rule creates multiple paths to eligibility and takes aim at only the most egregious of bad actors.

New graduates grapple with mounting debt load, weak economy Scranton, Pa., Times-Tribune July 17, 2010 With employment prospects bleak, wages stagnant and student loan burdens larger than ever, new graduates are finding debt payments tough to manage.  The average U.S. student graduated with $25,000 in debt, according to the United States Student Association. That's about double the debt burden of just 12 years ago. A combination of flat wages and spiraling tuition has made student borrowing commonplace, with some graduates of private schools facing six-figure debt.

Senate Passes Legislation That Includes Oversight of Private Loans, Debit-Card Fees Chronicle of Higher Education July 16, 2010 In a victory for students and college bookstores, the U.S. Senate gave final approval Thursday to a sweeping financial reform bill that will lower the fees colleges pay when students use debit and credit cards and increase oversight of private student loans.  One of the biggest components of the bill is the creation of the Consumer Financial Protection Bureau in the Federal Reserve that will have authority over most consumer lending, including private student loans. The bill also creates an ombudsman position to oversee private student loans.

Grads not making enough to pay off loans Marketplace Radio July 13, 2010 Enrollment at for-profit colleges has spiked since the economy's gone south. State and federal regulators have been eyeing low graduation rates and heavy debt.  So the Obama Administration is set to propose some new rule for career colleges to make sure graduates end up in jobs that pay well enough to cover their student loans.  From the Marketplace Education Desk, Amy Scott reports.

Government Vastly Undercounts Defaults Chronicle of Higher Education July 12, 2010 According to unpublished data obtained by The Chronicle, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions.  The data also show that the government's official "cohort-default rate," which measures the percentage of borrowers who default in the first two years of repayment and is used to penalize colleges with high rates, downplays the long-term cost of defaults, capturing only a sliver of the loans that eventually lapse.

Have they no decency? Philadelphia Inquirer - Editorial July 8, 2010 The Christopher Bryski Student Loan Protection Act recently introduced by Rep. John Adler (D., N.J.) would require more disclosure about options such as credit insurance, which pays off loans in the event of death. The Adler bill is a good step, but there are others Congress must take to make a college education more affordable. At the top of the list, Congress needs to end federal subsidies to private lenders and let the government directly disburse guaranteed loans to students without a middleman.

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