Educational loan : Reforms Could Combat Rising Student Loan Defaults - PowerPoint PPT Presentation

Loading...

PPT – Educational loan : Reforms Could Combat Rising Student Loan Defaults PowerPoint presentation | free to download - id: 803413-MjI1Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Educational loan : Reforms Could Combat Rising Student Loan Defaults

Description:

However, there are other means of ensuring accountability. The Educational Loan feels the president's plan to tie college financial aid to performance should be pursued with vigor. – PowerPoint PPT presentation

Number of Views:5

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Educational loan : Reforms Could Combat Rising Student Loan Defaults


1
Educational loan
2
Reforms Could Combat Rising Student Loan Defaults
3
  • The most recent student loan default rates
    released by the Department of Education show that
    sadly, but not surprisingly, default rates rose
    for the sixth year in a row.
  • Each default is not an abstraction, but a person
    experiencing personal distress and real financial
    hardship.
  • Much of this is needless, because small tweaks to
    already existing programs could go a long way
    toward eliminating it, in the Student Loan.

4
  • The cohort default rates measure the percentage
    of a school's borrowers who default on their
    loans over a specified period of time.
  • The two-year rates measure the percentage of
    borrowers who enter repayment on their federal
    student loans during a particular federal fiscal
    year and default prior to the end of the next
    fiscal year.
  • The more accurate three-year rates which
    Congress mandated as part of the Higher Education
    Opportunity Act of 2008 calculate the
    percentage of defaults prior to the end of the
    second fiscal year after borrowers enter
    repayment.

5
  • Starting next year, only the three-year rates
    will be calculated. But in the meantime, the
    Department of Education is releasing both sets of
    rates.
  • Both indicate that borrower distress is still
    rising, with the two-year rate rising from 9.1
    percent in fiscal year 2010 to 10 percent in 2011
    and the three-year rate rising from 13.4 percent
    in fiscal year 2009 to 14.7 percent in 2010.
  • The department's rates also put numbers on the
    human toll. The three-year default rates indicate
    that 600,545 borrowers who entered repayment in
    2010 defaulted before the end of 2012.
  • That's more than half a million borrowers who are
    facing some of the consequences of defaulting on
    federal student loans, including seizure of tax
    refunds, garnishment of wages and the partial
    taking without a court order of Social
    Security payments.

6
  • The Student Loan argues it is imperative that
    Congress take affirmative steps to end this
    needless misery.
  • It should begin, as President Barack Obama has
    requested, by allowing all borrowers to enroll in
    Pay As You Earn, the new income-driven repayment
    plan that caps payments at 10 percent of a
    borrower's income and provides for forgiveness
    after 20 years.
  • Congress should then require all federal student
    loan servicers to personally contact borrowers
    who are delinquent, in a hardship deferment or in
    forbearance and offer to enroll them in Pay As
    You Earn.
  • This should help greatly reduce the number of
    defaults.

7
  • However, there are other means of ensuring
    accountability.
  • The Educational Loan feels the president's plan
    to tie college financial aid to performance
    should be pursued with vigor.
  • And the Department of Education's revised gainful
    employment rules, under which career-oriented
    programs would lose the ability to receive
    federal student aid if graduates' debt-to-income
    and debt-to-discretionary-income ratios are too
    high, should be extended to all institutions of
    higher education.
  • These could increase accountability for
    institutions while providing much needed
    protections for millions of suffering borrowers.
  • Source http//bit.ly/YH6LcY

8
Follow us on
https//www.facebook.com/AvanseEducationLoan
https//www.linkedin.com/company/avanse-financial-
services
https//twitter.com/avanseeduloan
https//plus.google.com/AvanseFinancialServicesLt
dMumbai
https//www.youtube.com/channel/UCcsuUx1EH1C08XmX2
embpug
9
Read more on Education Loans
http//www.avanse.com/avanse-education-loans/
Thank You..!!!
About PowerShow.com