Student Loans: Publications, Events and More

Jason Delisle in San Antonio Express | 'College aid law offers partial relief for students'

Communications — Mon, 30 Jun 2008 11:58:00 -0400

New America in the News:
...In addition to financial aid, the law will also dole out matching grants aimed at boosting the number of first-generation and low-income college students, and will give $510 million to Hispanic, black and other minority-serving institutions.

Overall, the measures will relieve some pressure on students and families — but not too much, said Jason Delisle, an education researcher at the New America Foundation, a nonpartisan think tank in Washington, D.C. Lawmakers would have liked to do more, but they had a limited pot of money available after cutting the lender subsidies.

“Basically, they did that because they couldn't afford to do it any other way,” Delisle said... 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.

Michael Dannenberg in APM's Marketplace | Student Loans Are Getting Whacked

Communications — Thu, 17 Apr 2008 11:50:00 -0400

New America in the News:

APM's Marketplace | Student Loans Are Getting Whacked

Bank of America and a unit of Citigroup have joined a growing list of lenders cutting back on student loan programs. At the same time, the House passed an emergency bill that would enable lenders to have more cash to keep making loans. John Dimsdale reports.

TESS VIGELAND: OK, here's another side-effect of the credit crunch: Student loans are getting whacked. Today Bank of America and a unit of Citigroup joined a growing list of lenders cutting back on student loan programs. Also today the House passed an emergency bill to give the Education Department more authority to buy up student loans. That way, presumably, lenders would have more cash to keep making them. John Dimsdale reports from Washington.

JOHN DIMSDALE: Today the Bank of America joined the dozens of lenders who've recently withdrawn from the federally-guaranteed student loan business. Yesterday, the nation's largest student lender, Sallie Mae, announced a $133 million loss in the first quarter of this year. That compares to more than $100 million in profits last year. But the editor of HigherEdWatch.Org, Michael Dannenberg, isn't worried yet.

MICHAEL DANNENBERG (Director of the Education Policy Program at the New America Foundation): There are a couple thousand student loan providers -- federal student loan providers. There are two fail-safe systems in place. There's definitely a crisis for some individual lenders, but that's different from actual students. Theoretically, something very bad could happen down the road, but we're not there yet. . .

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

Michael Dannenberg in Inside Higher Ed | 'Hedging Bets on Student Loan Availability'

Communications — Thu, 13 Mar 2008 13:02:00 -0400

New America in the News:

Hedging Bets on Student Loan Availability (Inside Higher Ed)

. . . “I think he’s doing the right thing in seeking to calm fears of parents or financial aid officers scared by newspaper headlines, and by demonstrating that Congress is ready to act should there be widespread problems for students themselves, as opposed to some lenders,” said Michael Dannenberg, director of the Education Policy Program at the New America Foundation. Dannenberg said that Kennedy’s plan should be viewed not as opening the door to students’ borrowing more but as allowing them to shift their borrowing to less-costly federal loans rather than more expensive private ones. . .

New America Foundation in Inside Higher Ed | 'A Student Loan Credit Crunch — But for Whom?'

Communications — Wed, 12 Mar 2008 08:34:00 -0400

New America in the News:

A Student Loan Credit Crunch — But for Whom? (Inside Higher Ed)

. . . “Students with poor credit ratings, particularly those at trade schools whose graduates have poor repayment track records, might be unable to find a willing private student loan provider,” the New America Foundation’s Education Policy Program wrote on its blog this month. “All students, however, who apply for a private student loan with a creditworthy co-signer should be able to obtain a loan and obtain it at a lower interest rate than they otherwise would receive. Private student loan borrowers who don’t have a creditworthy co-signer and who are pursuing academic programs at schools with dubious job placement and loan repayment track records should consider lower cost education options.”

The idea suggested in the New America post — that the credit crunch isn’t a major problem because it is affecting mostly students at for-profit colleges, and should actually prod students who take out costly private loans at for-profit schools to enroll instead in community colleges or other lower-cost institutions — has been a subtext of some of the discussion surrounding the credit crunch, and reveal just how differently the crisis is perceived in various quarters. . . .

Michael Dannenberg in University Wire news | "Student Loan Field Takes Defense"

Communications — Wed, 05 Mar 2008 15:55:00 -0500

New America in the News:

Student Loan Field Takes Defense (University Wire)

. . . Michael Dannenberg, director of the education policy program for the New America Foundation, a nonpartisan think tank investigating the student loan crunch, said the media had merged private student loans and federal student loans' susceptibility to the housing crisis, noting federal loan recipients won't be affected. He scolded the press for creating a sense of fear. "The bigger danger is that the fear, if not panic, could depress college access for students who think they can't get a loan," Dannenberg said. . .

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

Michael Dannenberg in Minneapolis Star Tribune | 'Students Pinched by Credit Markets'

Communications — Thu, 21 Feb 2008 17:09:00 -0500

New America in the News:

Students Pinched by Credit Markets (Minneapolis Star Tribune)

..."There is zero danger that federal Stafford loans will not be available in the foreseeable future. Zero danger," said Michael Dannenberg, director of education policy at the New America Foundation in Washington.

Only about 10 percent of all college loans come from private lenders, he said. Many of those students could turn to federally backed loans if other sources of cash dry up, in Dannenberg's view.

Michael Dannenberg in New York Times | 'As Lending Tightens, Education Could Suffer'

Communications — Tue, 19 Feb 2008 14:12:00 -0500

New America in the News:

As Lending Tightens, Education Could Suffer (New York Times)

...Not everyone believes that retrenchment in commercial education would be bad. “High-risk borrowers with low academic achievement who are pursuing post-secondary training should not go to expensive, low-quality proprietary schools,” said Michael Dannenberg, director for education policy at the New America Foundation in Washington. “They would be better off going to community colleges, which are lower cost and open enrollment, for the most part.”

Michael Dannenberg in Cox News | 'House Democrats to Vote on Cutting Student Loans'

Communications — Thu, 14 Feb 2008 14:17:00 -0500

New America in the News:

House Democrats to Vote on Cutting Student Loans (Cox News Service)

...Michael Dannenberg, director of the Education Policy Program at the New America Foundation, said the federal government has wasted "billions of dollars" each year on excess lender subsidies. "Financial aid should be helping students, not banks," he said.

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."

Michael Dannenberg in AARP Bulletin | 'What An Outrage!'

Communications — Mon, 28 Jan 2008 15:34:00 -0500

New America in the News:

What An Outrage! The Money That Got Away (AARP Bulletin)

Nelnet denies it broke any laws. Still, "for a good number of years, Nelnet had a river of dirty money flowing through it," says Michael Dannenberg, director of the education policy program at the New America Foundation in Washington.

Michael Dannenberg in NY Times | 'U.S. Ignores Finding on Lender'

Communications — Sat, 26 Jan 2008 16:26:00 -0500

New America in the News:

U.S. Ignores Finding on Student Lender (The New York Times)

Michael Dannenberg, director of the education policy program at the New America Foundation in Washington, sharply criticized the department’s decision to seek less than the amount identified in the audit.

“The department’s going after less than half of a fraction of the larger amount of improper billing that the Pennsylvania lending agency engaged in,” Mr. Dannenberg said. “The Department of Education’s failure to aggressively police the student loan industry has hurt taxpayers and students, and this is the latest example.”

Michael Dannenberg and Jason Delisle in CQ | "Student Aid: Will many low-income students be left out?"

Communications — Fri, 25 Jan 2008 11:55:00 -0500

New America in the News:

Student Aid: Will many low-income students be left out? (available for purchase from CQ Researcher online)

...The idea that having more lenders in the program improves customer service through competition doesn't make sense, says Jason Delisle, research director for education policy at the New America Foundation. The Loans are an identical commodity offered under government rules, so lenders have little room to customize loans or services, he says. In addition, lenders generally hold the loans on their own book for only a few months before selling them. ...

... The large number of lenders competing for student-loan business is evidence that private lenders have long received "excess subsidies," according to Michael Dannenberg, director of education policy at the New America Foundation. "There are reasons Sallie Mae's [Student Loan Marketing Association's] stock has increased by 2,000 percent in teh last decade, and those reasons are a government garantee against risk and very large government subsidies." ...

AP Quotes Michael Dannenberg on Student Loans and Higher Ed Costs

Communications — Sat, 22 Dec 2007 14:04:00 -0500

New America in the News:

The Assosciated Press published a review of the surge in loan elimination in private schools for middle- to upper-class income students, and quoted Michael Dannenberg, Education Program Director with the New America Foundation.

... Michael Dannenberg, a scholar at the New America Foundation, notes that's also approximately the figure Congress spent this year to cut student loan interest rates from 6.8 percent to 3.4 percent -- for the whole country. ...

Ultimately, however, other factors will play a much bigger role in college affordability for most people than Harvard's policies for its 6,600 undergraduates.

For instance, maximum Pell Grants -- the main federal aid program for low-income students -- are set to rise from $4,310 to $4,731 this year under a spending bill passed Wednesday by Congress -- though that's a $69 cut from what students had been promised.

But the biggest factor is the economy, says Dannenberg of the New America Foundation. Historically, when the economy falters, state funding for higher education is first to take a hit, and public college tuition soars.

"You could have this coming phenomenon where higher education at the elite colleges is becoming more affordable for the talented elite students who are accepted, but education for the masses to attend state and community colleges could become less affordable." ...

For the complete article, please follow this link.

Student Loan Auctions - The Missing Story

Education Policy — Wed, 31 Oct 2007 23:40:00 -0400

Last week, National Journal ran an article on the recently enacted student loan auction program filled with criticisms. According to lenders, bankers, Bush political officials at the Education Department, college aid administrators' association (NASFAA), and "most" Congressional Republicans, the taxpayers' representatives should not use the market to set student loan company subsidy rates, because it is "unworkable." Their alternative is to pull a subsidy number out of thin air. Really.

The special interests referenced in the National Journal article who criticize the newly enacted student loan auction subsidy setting program… 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.