Stephen Burd: All Publications, Events and Press

Stephen Burd in St. Petersburg Times | 'Castor Seeks Checkups on College Lenders'

Communications — Wed, 18 Jun 2008 14:47:00 -0400

New America in the News:

Experts say Castor's proposed changes [to the federal student loan industry] are sorely needed, and could be made without putting an undue burden on government regulators...

Such fixes would be a "common-sense solution" to lax oversight by the federal government, said Stephen Burd, a senior fellow at the New America Foundation...LINK

Steve Burd in Reuters | "U.S. Student Loan Bill Advances, Bush Will Sign"

Communications — Thu, 01 May 2008 15:46:00 -0400

New America in the News:
. . . Stephen Burd, senior research fellow at think tank New America Foundation, said some lenders were having financing problems. "We just don't think the government should let the loan industry define the terms of the intervention." . . . For the complete article, go to Reuters.com.

Steve Burd in U.S. News | Look Twice at Loan Advice

Communications — Tue, 15 Apr 2008 07:13:00 -0400

New America in the News:

Look Twice at Loan Advice (U.S. News & World Report)

. . . Stephen Burd, a senior research fellow at the New America Foundation, says many colleges are affordable without the help of private loans at all. Plus, Burd adds, federal loans also are due only after graduation, and the subsidized ones don't accrue interest while students are still in school, as most private loans do—a fact not mentioned in the ads. . .

Steve Burd in CQ Weekly | "In Student Loan Market, A Direct Approach"

Communications — Sun, 06 Apr 2008 13:51:00 -0400

New America in the News:

In Student Loan Market, A Direct Approach (CQ Weekly)

. . . But private lenders who need help face a dilemma. "Lenders are sort of putting themselves in this weird spot, where on the one hand they're raising huge alarms on the viability of their program, and on the other hand are trying to make sure they don't scare schools into the direct loan program," said Steven Burd, a senior research fellow at the New America Foundation. more

Stephen Burd of New America Foundation's Higher Ed Watch.Org Blog Receives National Education Reporting Award for Investigating

Communications — Wed, 27 Feb 2008 17:11:00 -0500

Higher Ed Watch.Org's staff writer and a lead investigator on the 2007 student loan scandals, Stephen Burd, is the winner of a 2007 National Award for Education Reporting, the Education Writers Association announced on Monday. Burd is a Senior Research Fellow with New America Foundation's Education Policy Program and a former Senior Writer at The Chronicle of Higher Education. Burd's two award winning articles from April 2007 appear here on the Higher… more

Stephen Burd in Pittsburg Post-Gazette | 'Market Doubts Hit Private Student Loans'

Communications — Tue, 12 Feb 2008 18:29:00 -0500

New America in the News:
Market Doubts Hit Private Student Loans (Pittsburg Post-Gazette)

...Sallie Mae and others are experiencing a growing default rate. The sub-prime mortgage crunch has spilled over into the student loan area, too, with investors less willing to buy loans of different kinds, said Stephen Burd, senior research fellow at New America Foundation, a nonprofit think tank.

"It's just a question of securitization right now," Mr. Burd said. ...

Steve Burd in St. Louis Post-Dispatch | 'Loans Feeling Credit Crunch'

Communications — Sun, 03 Feb 2008 16:59:00 -0500

New America in the News:

Student loans feeling credit crunch, too (St. Louis Post-Dispatch)

Those students, though, paid interest rates of up to 20 percent to finance their educational dreams. Stephen Burd, senior research fellow at the New America Foundation who blogs about higher education, says the lending practices got out of hand. "We actually think that this is a positive development that subprime lending in for-profit education is being curtailed, because we don't think students should have been stuck with these high-interest, high-cost loans in the first place."

Subprime Mess Reaches Higher Ed

Education Policy — Thu, 31 Jan 2008 14:51:00 -0500

Policymakers and journalists, don't be fooled by the Career College Association's spin. Sallie Mae's decision last week to stop engaging in subprime student lending at some of the most scandal-ridden chains of for-profit colleges is good news for low-income and working class students, not bad.

For years, Sallie Mae and some other lenders have "partnered" with giant publicly-traded, for-profit higher education companies to provide high-cost private student loans, with interest rates and fees of more than 20 percent, to low income and minority students who normally wouldn't qualify for them because… more

Too Little, But Not Too Late

Education Policy — Tue, 15 Jan 2008 11:28:00 -0500

In approximately three weeks, the U.S. House of Representatives is expected to take up legislation that would impose new restrictions on the relationships between colleges and student loan companies. While the effort is to be applauded, the legislation could go much further in eliminating the types of "pay for play" conflicts of interest in the student loan program that have caused so much controversy over the last year.

Even more explicitly than current law's anti-inducement clause, both the House and Senate versions of the Higher Education Act reauthorization would bar lenders from providing, and colleges… more

Sallie Mae's Blame Game

Education Policy — Wed, 09 Jan 2008 14:50:00 -0500

When student loan giant Sallie Mae announced on Monday that it was removing Al Lord, the company's Chief Executive Officer (CEO), from his position as Executive Chairman of the board a little more than a month after he took the job, it went to great lengths to portray the move as business as usual. But investors, financial analysts, and the news media weren't buying it. The fact Sallie Mae had handed control of its board to an individual who has been touted as "a turnaround specialist" speaks volumes about the degree of… more

Rewriting History at the Department of Education

Education Policy — Wed, 05 Dec 2007 18:49:00 -0500

Top officials at the U.S. Department of Education continue to repeat the company line that they were ahead of the curve in coming to grips with and confronting the burgeoning "pay for play" student loan scandal -- despite all evidence to the contrary.

In an interview with Higher Education Washington Inc, (HEWI) a publication owned and run by a top student loan industry lobbyist, the Education Department's new Assistant Secretary for Postsecondary Education, Diane Auer Jones, takes issue with those who suggest that Department leaders have… more

Easing Restrictions on Trade Schools is a Mistake

Education Policy — Wed, 14 Nov 2007 11:39:00 -0500

Last month, federal agents raided the campuses of three for-profit colleges around Fort Lauderdale, including one owned by Corinthian Colleges, which is among the largest trade school chains in the country. The U.S. Department of Education's Office of Inspector General, which led the raids with the help of the FBI and local officials, would not comment on the investigation, but according to news reports, the agents carted away boxes of documents, including ones labeled "financial aid" and "student records."

The raids were hardly an isolated incident. Over the last several years, some… more

Questions Colleges Need to Answer

Education Policy — Wed, 07 Nov 2007 14:00:00 -0500

With Congress providing a significant increase in Pell Grant aid, federal lawmakers have some pressing questions to ask colleges about how they spend their institutional aid dollars. Will colleges use the influx of Pell Grant dollars to supplement their aid and insure that low-income students don’t have unmet financial need and therefore won’t have to take on unmanageable levels of debt? Or will they use the new federal funding to replace institutional aid dollars they would have spent otherwise, and shift dollar-for-dollar their own institutional financial aid resources toward non-need-based, "merit" aid programs, designed… more

USA Today Quotes Stephen Burd on Private and Federal Loans

Communications — Tue, 30 Oct 2007 07:16:00 -0400

New America in the News:

Student loans are often categorized as good debt, because a college education is considered a sensible long-term investment. ...

But it's important to understand that not all student loans are alike. Federally guaranteed student loans, known as Stafford loans, have fixed interest rates, now 6.8%, and flexible repayment terms. Any full-time college student, regardless of family income, can take out a Stafford loan.

Private student loans, which are often offered by the same lenders that provide federal loans, are more expensive. Interest rates are variable, so there's no limit on how high they can go. And repayment terms aren't as flexible as they are for federal loans.

Yet despite these drawbacks, private student loan borrowing has soared in the past decade. This year, private loans accounted for 29% of all loans taken out by undergraduates, according to a report released last week by the College Board. ...

The amount of federal money that students can borrow is limited, and those limits haven't kept up with increases in college costs. As a result, some students who attend high-cost schools rely on private loans to pay for expenses not covered by their federal loans.

But that doesn't entirely explain the growth in private loans. An analysis by the American Council on Education found that one in five undergraduates with private loans didn't first take full advantage of federal loans.

So why do borrowers take out higher-cost loans? Marketing probably plays a role. Many lenders advertise private loans on television and over the Internet. ...

In addition, recent cuts in government subsidies have made federal loans less profitable for lenders. Consequently, lenders may become even more aggressive in marketing their private loans, says Stephen Burd, senior research fellow for the New America Foundation, a policy institute. ...

For the complete article, please follow this link.

Private Loan Volume

Education Policy — Thu, 25 Oct 2007 06:22:00 -0400

The growth in private student loan borrowing slowed considerably last year according to the College Board, but that’s hardly reason to celebrate. Private loan borrowing continues to escalate at alarming rates for undergraduate students, and much of the debt is being taken on by students who can least afford it.

Overall, students borrowed $18.5 billion in private loans from for profit companies and state nonprofit lenders in the 2006-07 academic year, or six percent more than in the prior year, the College Board reports in the latest version… more

Selling Out Students to Sallie Mae

Education Policy — Wed, 17 Oct 2007 20:14:00 -0400

Yesterday, we praised colleges that have resisted lenders’ efforts to use open government laws to get personal data about their students for marketing purposes. Unfortunately, not all higher education institutions are as vigilant in protecting the privacy of their students’ information. Case in point: the University of Miami.

According to excellent reporting in the St. Petersburg Times, many University of Miami incoming freshmen were surprised this summer when they received pre-filled out master promissory notes from loan giant Sallie Mae even though they never actually applied for a loan.… more

Sallie Mae Scooped Us

Education Policy — Tue, 16 Oct 2007 13:27:00 -0400

Last week, Higher Ed Watch revealed that Sallie Mae had filed a New York Freedom of Information Law request asking community colleges in the State University of New York (SUNY) system to provide the company with contact information for their students. After posting that item, we learned that the loan giant -- which actively markets private loans directly to students -- had made a similar state open record request to public colleges in Pennsylvania [see request here], and we planned to report that fact this week.

But we… more

Stephen Burd in St. Petersburg Times on Univ. of Miami Sharing Data

Communications — Thu, 11 Oct 2007 05:06:00 -0400

New America in the News:

University of Miami officials have confirmed they sent students' private data to lender Sallie Mae last summer, even though students said they never applied for a federal loan from the company.

In the school's view, students did apply for a loan when they filled out the standard form all students submit to establish eligibility, financial aid director James Bauer said.

But national experts scoffed at that interpretation of federal privacy and lending laws, saying receipt of the Free Application for Federal Student Aid FAFSA does not by itself allow schools to share student data with a private company. ...

Federal law prohibits schools from sharing private student information, such as Social Security numbers or birth dates, without their explicit consent. And lenders can't send unsolicited federal loan applications to students who haven't previously received loans.

About 14-million students submit the FAFSA each year, often sending it to multiple schools during the application process, according to the federal Department of Education. ...

There is no space to indicate a lender choice. Stephen Burd, senior fellow at the New America Foundation, said some students fill out the FAFSA form as a hedge, even though they're not sure they'll need a federal loan.

"I would imagine that families would be extremely unhappy to find out their data is being used in this way," he said. "Having the Master Promissory Note filled out for you is obviously an effort to deny students a choice of lenders." ...

For the complete article, please follow this link.

NEWS SCOOP: Sallie Mae Demands SUNY Colleges Turn Over Students' Personal Data

Education Policy — Tue, 09 Oct 2007 23:34:00 -0400

Lenders that market private loans directly to students are increasingly using state open government laws to demand public colleges turn over personal data on their students.

Late last month, student loan giant Sallie Mae filed a New York Freedom of Information Law request asking community colleges in the State University of New York (SUNY) system to provide the company with the names, telephone numbers, and home mailing and e-mail addresses of "all admitted and enrolled students for academic year 2007-2008." The request, which came from the company's Direct Marketing division, also… more

Replace the SAT

Education Policy — Wed, 03 Oct 2007 16:01:00 -0400

In August, the College Board announced that for the first time since the early 1990s average SAT scores in reading and math had declined two years in a row. The announcement caused hand wringing in the news media and among pundits. Have students’ scores dropped because the new and expanded SAT exam is too lengthy and demanding? Could the decline be attributed to the increasing numbers of low-income and minority students taking the test, as the College Board claimed? Or as USA Today asked last year when the scores initially… more