Student Loans: Latest Articles

Student Loan Scandal

Articles — Mon, 25 Jun 2007 14:32:00 -0400

Student loan banks and their allies are trying to spin away the public’s outrage over the discovery that private lenders have been bribing college aid officials to steer student business their way. The banks want to change the subject by criticizing the government’s separate direct loan program instead of looking at where all that bribe money comes from: You.

The government spends billions each year on unnecessary subsidies to banks that make student loans. It’s these excess taxpayer subsidies to private student loan banks that are the root cause of the college loan scandal. They ought to be eliminated.

There are… more

When Student Lenders Compete, N.Y. Wins

adminn — Thu, 19 Apr 2007 13:16:00 -0400

Colleges and college aid officials have been funneling their students to big banks like Sallie Mae and Citibank in exchange for cash, gifts and in-kind benefits, according to a series of recent public investigations, the most energetic of which is being led by New York State Attorney General Andrew Cuomo.

Thus far, the investigations have resulted in the suspension of 10 higher education officials, including Columbia University's director of financial aid, the issuance of almost 100 subpoenas nationwide, and a series of financial settlements with several colleges and three student loan banks. The colleges have agreed to gift bans… more

Borrowing Trouble

Articles — Tue, 10 Apr 2007 23:39:00 -0400

After 15 years, of reporting on the student-loan industry, I didn’t think much could surprise me. But even I was shocked last week when I discovered Securities and Exchange Commission documents revealing that financial aid directors at three prominent universities -- as well as a senior official at the U.S. Education Department -- each had significant personal investments in a private student-loan company

What possibly could have motivated these officials to take tens of thousands of dollars in stock options from Student Loan Xpress? Has the whole student-loan business become so corrupt that they failed to see the conflict of interest?… more

Create a College Access Contract

Articles — Sat, 07 Apr 2007 01:01:00 -0400

America’s financial-aid system provides too much taxpayer support to banks that make college loans, asks too little of students who assume them, and burdens families with too much debt. We need to rethink the system in order to improve college access and affordability. Federal higher-education policy largely fails to reward rigorous college-preparatory work in high school. It penalizes students who hold jobs while in college. Lenders make extraordinary profits, while young people leave college burdened with debt and, more often than not, without the degree or skills necessary to repay it.

A new more

A Bid for Better Student Loans

Articles — Mon, 05 Feb 2007 21:58:00 -0500

The average graduate of a four-year college now sets off in life burdened by almost $20,000 in student loans. Among those graduating from four-year private schools, it is not uncommon to owe $40,000 or more. Responding to this unprecedented burden on Americans seeking to improve themselves, the House recently passed a bill that, on average, would reduce the loan interest paid by college students by about $30 a month.

That’s welcome relief. But by forcing banks to compete for the right to make government-guaranteed student loans, we can do much more to ensure that young Americans are not sunk by… more

Give Money to Students, Not Lenders

Articles — Thu, 12 Oct 2006 22:57:00 -0400

A new Education Department report could have dramatic implications for the Pennsylvania Higher Education Assistance Authority (PHEAA).

The report, from the department’s inspector general’s office, calls on the National Education Loan Network, known as Nelnet, to give up $278 million in improperly claimed taxpayer subsidies. An additional $882 million could still be counted as overpayment, according to the report. Nelnet disagrees with the findings, and it’s now up to the Department of Education secretary to accept or reject the report.

About two-thirds of PHEAA’s earnings in 2004 came from the same subsidy, and the nonprofit lender is now being audited.

How did Nelnet… more

Missouri's Catch 22

Articles — Wed, 20 Sep 2006 01:16:00 -0400

Missouri’s pending plan to sell its student loan non-profit’s assets in order to pay for $350 million in college construction is doomed to fail. What seems like a great arrangement for everyone has two major problems:

First, the deal depends on an illegal bribe. Second, it’s actually not that great for either students or taxpayers. Even so, there are ways to turn it into a good deal, if Washington and Jefferson City work together.

The plan calls for Missouri’s Higher Education Loan Authority to sell hundreds of millions of dollars’ worth of existing student loans -- most likely to the… more

With Three Smart Steps, Congress Can Make a Big Difference

Articles — Sun, 06 Nov 2005 00:00:00 -0500

I just paid off the last of my student loans. Today, I start saving for my children's college education, and I'm already behind. Like millions of Americans, by the time I retire, I will have spent over 75% of my life either paying or saving for college. It shouldn't be this hard.

The College Board recently reported that tuition and fees at public four-year colleges are up more than 37% in non-inflation-adjusted terms just since this year's senior class began college. At the current rate of tuition and fee increases, today's first-graders will be paying more than $341,000 for… more

The Tuition Crunch

Articles — Tue, 20 Jan 2004 00:00:00 -0500

A four-year college degree has become all but a necessity for getting ahead in the information age. Since the 1980s the average real income of workers with only a high school diploma has fallen, while salaries among those with at least a college degree have risen: they now earn 75 percent more than high school graduates. At the national level, having a highly educated work force is critical in order to sustain our technological edge in the global economy.

America's higher-education system ranks among its greatest achievements. But in the past two decades our commitment to equal opportunity in post-secondary… more