The 20-Day Money Challenge: How to Set Up Your Financial Future

We picked 20 truly essential money lessons, paired with simple tasks for you to take on.

#personal-finances, #student-loans

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Federal PLUS College Loans Can Trap Parents in Debt

The popular parent PLUS loans are made without regard to the ability of borrowers to repay, and have fewer protections when they can’t.

#colleges-and-universities, #content-type-service, #credit-and-debt, #financial-aid-education, #personal-finances, #student-loans

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Advocate of Revamping Student Loan System Will Head Federal Aid Office

Richard Cordray, who led the federal Consumer Financial Protection Bureau under President Obama, was appointed on Monday as chief operating officer of federal student aid in the Education Department.

#colleges-and-universities, #consumer-protection, #cordray-richard, #financial-aid-education, #student-loans, #united-states-politics-and-government

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A Novel Way to Finance School May Penalize Students from HBCU’s, Study Finds

Income-share agreements are gaining popularity, but a new analysis highlights how calculations of what borrowers owe can disadvantage minorities.

#black-people, #chopra-rohit, #colleges-and-universities, #consumer-behavior, #consumer-financial-protection-bureau, #consumer-protection, #frotman-seth, #income-inequality, #national-assn-for-the-advancement-of-colored-people, #student-loans

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Left in the Lurch by Private Loans From For-Profit Colleges

The loans have ensnared hundreds of thousands of students, who aren’t protected by the same government safeguards carried by federal loans.

#consumer-protection, #financial-aid-education, #for-profit-schools, #regulation-and-deregulation-of-industry, #student-loans, #vocational-training

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Struggling With Mounting Student Debt

Readers discuss an Op-Ed by a woman “drowning” in debt and whether there should be loan forgiveness.

#colleges-and-universities, #income-inequality, #interest-rates, #student-loans

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Student Loan Forgiveness Program Made Decisions in 12 Minutes, Documents Say

Education Dept. documents filed in federal court describe a process that denied 130,000 claims from borrowers who say schools misled them.

#alsup-william-haskell, #cardona-miguel-a-1975, #colleges-and-universities, #devos-elizabeth-1958, #education-department-us, #for-profit-schools, #frauds-and-swindling, #student-loans, #suits-and-litigation-civil, #sweet-theresa, #united-states-politics-and-government, #vocational-training

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I’ve Spent $60,000 to Pay Back Student Loans and Owe More Than Before I Began

Millions of Americans were forgotten when Congress extended protection for student loan holders. I’m one of them.

#biden-joseph-r-jr, #coronavirus-2019-ncov, #coronavirus-aid-relief-and-economic-security-act-2020, #pell-grants, #student-loans

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Congress Closes Loophole That Made Veterans a Target of For-Profit Schools

The new economic stimulus package makes a tiny change that military veterans pushed for in hopes of stemming aggressive recruiting tactics.

#american-public-education, #american-rescue-plan-2021, #colleges-and-universities, #corinthian-colleges-inc, #for-profit-schools, #itt-technical-institute, #student-loans, #united-states-defense-and-military-forces, #united-states-politics-and-government, #veterans

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Should Biden Cancel Student Debt?

It’s a trillion-dollar crisis that’s crippling the economy and dooming millions of college graduates. So what’s the fairest way to fix it?

#biden-joseph-r-jr, #colleges-and-universities, #credit-and-debt, #federal-state-relations-us, #student-loans, #united-states-economy, #urban-institute

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More Consumers Complain About Errors on Their Credit Reports

Complaints doubled last year, federal data shows. Some problems may be related to pauses in mortgage and student loan payments in the pandemic.

#consumer-financial-protection-bureau, #consumer-protection, #content-type-service, #coronavirus-2019-ncov, #coronavirus-aid-relief-and-economic-security-act-2020, #credit-scores, #equifax-inc, #experian-plc, #fair-isaac-corporation, #mortgages, #student-loans, #transunion-llc

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Should Student Debt Be Canceled?

Readers discuss fairness and the racial wealth gap in debating whether this would be the right move.

#biden-joseph-r-jr, #colleges-and-universities, #income-inequality, #race-and-ethnicity, #student-loans, #united-states-politics-and-government

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What Canceling Student Debt Would Do for the Racial Wealth Gap

A solution to the debt crisis would help all borrowers. But it could also begin to address a history of discriminatory policies affecting Black graduates.

#biden-joseph-r-jr, #black-people, #discrimination, #income-inequality, #student-loans, #united-states-politics-and-government

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Clearing the Wreckage at the Education Department

The institution lies in ruins right when it’s needed most.

#appointments-and-executive-changes, #biden-joseph-r-jr, #cardona-miguel-a-1975, #coronavirus-2019-ncov, #devos-elizabeth-1958, #education-k-12, #education-department-us, #financial-aid-education, #for-profit-schools, #shutdowns-institutional, #student-loans, #united-states-politics-and-government

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A Parent Trap? New Data Offers More Dire View of College Debt

In a separate loan program, more parents are loading up on debt, often in greater amounts than their children.

#colleges-and-universities, #content-type-service, #financial-aid-education, #parenting, #student-loans

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Student Loan Cancellation Sets Up Clash Between Biden and the Left

Democratic leaders are pressing the president-elect to cancel $50,000 in debt per student borrower by fast executive action, but he wants Congress to pass more modest relief.

#biden-joseph-r-jr, #colleges-and-universities, #democratic-party, #presidential-election-of-2020, #presidential-transition-us, #stimulus-economic, #student-loans, #united-states-economy, #united-states-politics-and-government

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Education Department extends student loan forbearance through January.

The move avoids a cliff at the end of the month that borrowers and loan servicers feared would cause a messy disruption.

#biden-joseph-r-jr, #coronavirus-2019-ncov, #devos-elizabeth-1958, #education-department-us, #student-loans, #united-states-politics-and-government

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We Owe One Another Student Loan Forgiveness

People who want others to suffer will be mad. Who cares?

#biden-joseph-r-jr, #colleges-and-universities, #stimulus-economic, #student-loans

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What About Tackling the Causes of Student Debt?

Pros and cons of loan forgiveness aside, there’s a more fundamental problem.

#biden-joseph-r-jr, #colleges-and-universities, #credit-and-debt, #for-profit-schools, #graduate-schools-and-students, #student-loans, #tuition

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What Biden’s Election Could Mean for Student Loans

The incoming administration has proposed a series of changes that could affect more than 42 million student loan borrowers. Here’s what to expect.

#biden-joseph-r-jr, #colleges-and-universities, #corinthian-colleges-inc, #democratic-party, #devos-elizabeth-1958, #education-k-12, #federal-aid-us, #for-profit-schools, #law-and-legislation, #obama-barack, #personal-bankruptcies, #personal-finances, #presidential-election-of-2020, #student-loans, #warren-elizabeth

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In a Divided Washington, Biden Could Still Exert Economic Power

If Republicans control the Senate, a Biden administration could take a cue from President Trump and find ways to act unilaterally on some economic issues.

#biden-joseph-r-jr, #consumer-financial-protection-bureau, #cordray-richard, #coronavirus-aid-relief-and-economic-security-act-2020, #corporate-taxes, #federal-reserve-system, #federal-taxes-us, #international-trade-and-world-market, #kraninger-kathy, #minimum-wage, #presidential-election-of-2020, #quarles-randal-k, #regulation-and-deregulation-of-industry, #stimulus-economic, #student-loans, #tiktok-bytedance, #trump-donald-j, #united-states-economy, #united-states-politics-and-government, #wechat-mobile-app

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For Millions Deep in Student Loan Debt, Bankruptcy Is No Easy Fix

It’s an extremely difficult debt to discharge, and only a few hundred people a year even try. Here are the stories of some who succeeded — mostly.

#colleges-and-universities, #credit-and-debt, #education-department-us, #educational-credit-management-corp, #federal-aid-us, #personal-bankruptcies, #student-loans, #united-states-politics-and-government

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Why 2020 Is Different for Student Loan Payments

Recent graduates usually have to start repaying in November. But because of the pandemic, payments on most federal loans have been suspended until January.

#colleges-and-universities, #content-type-service, #coronavirus-2019-ncov, #institute-for-college-access-and-success, #national-consumer-law-center, #student-loans

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ITT Tech Students Will Get $330 Million in Loan Relief

Borrowers have defaulted in overwhelming rates on loans that were sometimes fraudulently signed without their knowledge by ITT employees, government prosecutors said.

#consumer-financial-protection-bureau, #credit-and-debt, #deutsche-bank-ag, #education-department-us, #itt-technical-institute, #student-loans

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Consumer Groups Take PayPal to Task Over Student Loan Credit Line

The payment platform, in partnership with Synchrony Bank, offers a way to pay tuition at for-profit schools — at terms that are being called “predatory.”

#consumer-protection, #content-type-service, #financial-aid-education, #for-profit-schools, #paypal, #paypal-credit, #personal-finances, #student-loans, #synchrony-bank

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Will Trump’s Executive Directives Provide Relief?

Because Congress controls federal spending, at least some of the measures will almost certainly be challenged in court. Or they may become moot if Congress reaches a deal.

#coronavirus-aid-relief-and-economic-security-act-2020, #cuomo-andrew-m, #evictions, #executive-orders-and-memorandums, #federal-emergency-management-agency, #federal-taxes-us, #internal-revenue-service, #layoffs-and-job-reductions, #mnuchin-steven-t, #payroll-tax, #pelosi-nancy, #personal-finances, #states-us, #student-loans, #treasury-department, #trump-donald-j, #unemployment-insurance, #united-states-politics-and-government, #wages-and-salaries

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States Sue Education Dept. Over Relief for Cheated Students

The lawsuit, filed by the attorneys general for 22 states and the District of Columbia, says the department broke federal law and imposed standards that are impossible for defrauded students to meet.

#devos-elizabeth-1958, #education-department-us, #itt-technical-institute, #law-and-legislation, #new-york-legal-assistance-group, #student-loans, #suits-and-litigation-civil

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Student Loan Relief Denied in Some Fraud Cases

Education Secretary Betsy DeVos is denying huge batches of relief requests from students whose schools defrauded them. Even those who aren’t denied are getting very little — or sometimes nothing.

#colleges-and-universities, #corinthian-colleges-inc, #devos-elizabeth-1958, #education-department-us, #for-profit-schools, #frauds-and-swindling, #itt-technical-institute, #student-loans, #united-states-politics-and-government, #university-of-phoenix

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Joe Biden and Bernie Sanders Deepen Their Cooperation

Allies of the onetime presidential rivals revealed expansive joint policy recommendations, in a sign of tentative collaboration between the Democratic Party’s wings.

#biden-joseph-r-jr, #democratic-party, #health-insurance-and-managed-care, #presidential-election-of-2020, #sanders-bernard, #student-loans, #tuition, #united-states-economy, #united-states-politics-and-government

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Billions in College Aid Hiding in Plain Sight

Students often have little help finding and applying for financial assistance, and miss out on opportunities for affordable higher eduction.

#colleges-and-universities, #federal-aid-us, #financial-aid-education, #scholarships-and-fellowships, #student-loans

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House Fails to Override Trump’s Veto Limiting Student Loan Debt Relief

Stringent new rules by Education Secretary Betsy DeVos are set to take effect on July 1 after the attempt to reverse them was defeated.

#colleges-and-universities, #devos-elizabeth-1958, #for-profit-schools, #house-of-representatives, #student-loans, #united-states-politics-and-government

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How the Coronavirus Crisis Makes the Best Case Yet for Free College Tuition

College was already a financial house of cards. Then coronavirus hit.

#colleges-and-universities, #coronavirus-2019-ncov, #education, #financial-aid-education, #student-loans, #tuition

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Over Veterans’ Protests, Trump Vetoes Measure to Block Student Loan Rules

President Trump sided with Education Secretary Betsy DeVos over veterans groups, vetoing a measure that would have blocked new regulations that tighten access to student loan forgiveness.

#devos-elizabeth-1958, #for-profit-schools, #frauds-and-swindling, #student-loans, #trump-donald-j, #united-states-politics-and-government, #veterans, #vetoes-us

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LeverEdge wants to get you and your friends a volume discount on student loans

Student loans are both a trillion-dollar debt category and also one of the most popular mini-verticals out there in fintech startup investing right now. There are dozens if not hundreds of companies in the space, and they all mostly do one of two things: either they help students think through their student loan options before choosing one (acting as a financial advisor to avoid mistakes) or they help students after they finish school figure out how to optimize their repayments or acquire loan forgiveness.

And so when I heard the pitch for LeverEdge, I was intrigued, because it really doesn’t fit either bucket.

Rather than approaching each user individually and trying to optimize their own financial decision independently, LeverEdge proposes helping students band together as a group and negotiate reduced student loan rates by essentially acting as a collective bargaining unit with banks.

For founders Chris Abkarians and Nikhil Agarwal, the idea came as they were entering Harvard Business School.

The two connected with some other HBS students through online new admit groups on Facebook and came up with the idea of trying to work together to lower their interest rates. The annual cost of attendance at HBS is $111,102 right now (annually!), so multiplied by two for the two-year MBA and you are looking at potentially massive cost savings if you can lower your interest rate.

There was just one problem: banks loved the idea, but no one knew how to actually negotiate interest rates at individual branches. As Agarwal explained, “So after work we would try to leave at a reasonable time to get to the bank branch before it closes and then pitch the branch manager on this. They were super excited, but then they’d be like, well, I don’t know what to do with this, I can’t change interest rates for you.”

So Abkarians started sending cold emails to bank CEOs with the same proposition, and also got a positive response, but was told that he would need much more volume to make a negotiated deal worthwhile for banks. At the time, the two only had 50 to 70 people working together, but they spread the option around more heavily with their classmates and students at other business schools and eventually got to 700 students with $26 million in loan volume over the next 10 days.

With that scale, the two were able to negotiate a competitive rate with a bank that saved each student an average of $15,000 in fees over the full life of their loans according to their calculations.

They did all this entirely virtually too. Abkarians and Agarwal eventually met for the first time in person at Harvard in the fall, still with a whirl of excitement over what had transpired over the summer. They started asking for feedback from their users about the process, and Agarwal said:

The number one negative feedback we got was you closed the deal on July 26, [but] I couldn’t use it because my tuition due date was before that day. And then every other piece of feedback — even for this haphazardly run group — was incredibly amazing. And that really convinced us [… that] we owe it to our members and really the future generation of classes to make this a thing.

LeverEdge is taking that one-off experience and systemizing it for more students in more contexts. The startup, which was officially founded in May 2018, targets the private student loan market outside of federal programs typical for most undergrads. That loan market typically has higher (and sometimes dramatically higher) interest rates than traditional federal student loans, and lenders also has the flexibility to negotiate interest rates unlike with federal loans.

Today, LeverEdge has more than 15,000 students on its platform and has financed $100 million in student loans according to the startup. It also raised a $2.5 million seed round led by NFX along with Global Founders Capital and founders from fintech companies Earnest and SoFi.

The company spends most of the year aggregating students for the next school year, and then “we spend around two months in this auction process between different lenders,” Abkarians said. The company currently has nine employees, and “our staff is focused on partnership building,” he said.

The new version of a startup team photo. LeverEdge Team, photo via LeverEdge

As for business model, LeverEdge takes a pre-set referral fee from lenders upfront for each tranche of loans that they negotiate between students and the lender. That fee is “non-negotiable” according to Agarwal, and all lenders participating in the auction agree to pay it if they have the winning bid. The company varies the fee based on the loans that are grouped together (Agarwal said that, for example, refinance loans have a lower referral fee than other student loans). He believes this approach ensures that LeverEdge always has the right incentives to get the best prices for students.

Importantly, no student is obligated to take the final loan as negotiated by LeverEdge. But, if the company is doing its job, then the offered loan should be competitive with any alternative loan on the market. “We still encourage people to compare it against other things and if they find anything that is better than what we’ve found to please just let us know. No one has yet,“ said Abkarians.

The big question now is what will happen this coming school year given COVID-19. On one hand, students may avoid campuses knowing that schools are moving heavily toward virtual classes due to social distancing policies. On the other hand, economic recessions and greater concerns around costs may lead more students to seek out cheaper student financing options: exactly the customers that LeverEdge wants to find.

Overall, it’s an interesting play on the student loan space and one of the more interesting fintech startups I have seen in some time.

#debt, #finance, #funding, #fundings-exits, #global-founders-capital, #nfx, #startups, #student-loans

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In Financial Trouble? Track Everything Companies Tell You

Call centers are short staffed, and employees are scattered. Mistakes are inevitable. Document any changes and offers of relief, just to be safe.

#banking-and-financial-institutions, #capital-one-financial-corporation, #consumer-protection, #coronavirus-2019-ncov, #foreclosures, #mortgages, #personal-finances, #student-loans, #wiretapping-and-other-eavesdropping-devices-and-methods

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Fact Check: Trump’s Claims About His Response to the Coronavirus

The president inaccurately described travel restrictions he had announced, falsely blamed his predecessor for testing shortages and misstated the role Google was playing in mitigating the outbreak.

#centers-for-disease-control-and-prevention, #centers-for-medicare-and-medicaid-services, #computers-and-the-internet, #coronavirus-2019-ncov, #epidemics, #europe, #food-and-drug-administration, #google-inc, #medicine-and-health, #student-loans, #swine-influenza, #telemedicine, #tests-medical, #travel-warnings, #trump-donald-j, #united-states-politics-and-government

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Senate Rejects DeVos Rule Restricting Debt Relief for Bilked Students

The rule, struck down by a bipartisan majority, sought to rewrite Obama-era debt relief measures, which allow students misled by schools to request that their loan debts be forgiven.

#colleges-and-universities, #devos-elizabeth-1958, #education-department-us, #for-profit-schools, #frauds-and-swindling, #senate, #student-loans, #trump-donald-j, #united-states-politics-and-government, #veterans

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