2016 Report on the Real Cost of Student Loans

2016 Report on the Real Cost of Student Loans

By: GoodCall Introduction Student loan debt now stands at more than $1.35 trillion, a figure that has nearly tripled over the past decade. With more than 43.3 million Americans holding student loan debt, according to the Federal Reserve, understanding the true cost of student loan debt has become more important than ever before. Estimates for the average student loan debt held by each borrower vary widely. The Institute for College Access & Success estimates average student loan debt at $28,950 per student, while other experts have reported that the average figure for the class of 2016 is now along the lines of $37,172.80 per borrower. For student borrowers, however, the cost of student loans is much higher than just the sum of principal and interest. GoodCall conducted an analysis on the true cost of student loan debt to reveal how much student loans are really affecting college graduates, from delays in homeownership and lower retirement savings to lifestyle sacrifices and lessened financial security overall. GoodCall’s study encompasses three life areas: Homeownership, Retirement, and Lifestyle. Each section contains unique findings and insight into the real cost of student loans for borrowers. GoodCall’s research is based on a 23-year old graduate with a bachelor’s degree who starts earning the current average starting salary of $50,651[1] after graduation. The analysis compares four debt scenarios: A graduate who has no student loan debt A graduate who has $12,000 in student loans A graduate who has $28,950[2] in student loans A graduate who has $50,000 in student loans Before diving into the cost of student loans for college graduates, here’s what student loans look like today at the national and state levels:...
Report: For-Profit College Students Earn Less After Graduation Than They Did Before

Report: For-Profit College Students Earn Less After Graduation Than They Did Before

For-profit college chains often market themselves to non-traditional students — single parents, lower income individuals, military servicemembers — as a viable path to better job prospects and more money. However, a new report suggests that enrolling in of these sometimes costly schools may not help students reach their goals. A study recently published by the National Bureau of Economic Research found that most students who enroll in certificate, associate and bachelor’s programs at for-profit colleges and universities generally see a decline in earnings five or six years after attendance, when compared to how much they earned before attending classes, Inside Higher Ed reports. “Analysis of degree-seeking students suggests that on average associate’s and bachelor’s degree students experience a decline in earnings after attendance, relative to their own earnings in years prior to attendance,” the report states. The study is based on Dept. of Education and the Internal Revenue Service data on 1.4 million students who enrolled in for-profit schools between 2006 to 2008. Authors of the study suggest that the finding of negative economic impact of enrolling in for-profit colleges could be partially due to a large number of students who never graduate, but still acquire loads of student loan debt… Continue Reading at Consumerist… By: Ashlee...
Elizabeth Warren presses the Education Department to rein in Navient

Elizabeth Warren presses the Education Department to rein in Navient

Sen. Elizabeth Warren (D-Mass.) is ratcheting up pressure on the Department of Education to cut ties with Navient Solutions, one of the companies that collects and applies federal student loan payments on behalf of the government. The progressive leader sent a letter to the department’s chief operating officer, James Runcie, this week, raising concerns about the student loan servicer’s “extravagant and increasing lobbying expenditures.” Warren said her staff found that in addition to the $710,000 that Navient spent lobbying Congress on its own, the company paid outside firms an additional $155,000 to lobby on its behalf in the first three months of the year. Navient, she said, has spent a total of $3.7 million on lobbying since 2015, and almost $24 million since 2010. “I am mystified by the scope of these expenditures,” Warren wrote. “Navient should be focused on and investing in improving its abysmal student loan servicing operations, not lobbying Congress and the administration in search of sweetheart deals.” Officials at Navient say the lobbying expenses Warren lists are inaccurate, and the money the company spent on lobbying has actually declined by 30 percent year over year. They say Navient has been lobbying Congress to streamline student loan repayment options and default rehabilitation, among other things to help borrowers… Continue Reading at The Washington Post… By: Danielle...
Black College Graduates Holding More Student Loan Debt Compared to Their White Peers

Black College Graduates Holding More Student Loan Debt Compared to Their White Peers

There’s more involved than you might expect when it comes to predicting who has the most student loan debt. New research shows that Black students, even in middle-income families, are taking on more debt to earn a degree in comparison to their white peers. Combined with the race gap in graduationand earnings, where even when students earn the same degree from the same school, black Americans are getting paid less yet on the hook for more student loan debt. The journal Children and Youth Services Review recently published a study led by Michal Grinstein-Weiss of the Center for Social Development at Washington University in St. Louis. In it, researchers report “Low-to-moderate income (LMI) black students and graduates accrue on average $7,721 more student debt than their white counterparts.” This was the result even when accounting for other factors like socioeconomic status in families of origin. That additional debt has long-term consequences for growing wealth over the long term, as other research has found that middle-class white households have ten times higher wealth than their black peers. Even levels of employment are unbalanced between white and black graduates, with significantly higher unemployment among black college graduates… Continue Reading at GoodCall… By: Eliana...

Veterans Groups, Student Advocates Stand Up Against Partnership between The Ellen DeGeneres Show and The University of Phoenix

             FOR IMMEDIATE RELEASE May 6, 2016 CONTACT: Natalia Abrams natalia@studentdebtcrisis.org 310-365-1069 RELEASE: Veterans Groups, Student Advocates Stand Up Against Partnership between The Ellen DeGeneres Show and The University of Phoenix Higher Ed, Not Debt Partners Launch Petition Asking Host Ellen DeGeneres to Drop Partnership with For-Profit College Under Investigation by the Federal Trade Commission Washington, D.C.— Veterans groups and student advocacy organizations are speaking out after The Ellen DeGeneres Show awarded a stay-at-home mom a $25,000 scholarship to the University of Phoenix, a heavily-scrutinized for-profit college currently under investigation by the Federal Trade Commission and the California Attorney General. The veterans and student advocacy organizations, part of the Higher Ed, Not Debt coalition, are voicing their opposition to the promotional partnership, which will also provide ten additional scholarships of $25,000 each to participating entrants. The partnership is widely perceived as an egregious departure from the progressive positions DeGeneres typically champions, and another example of the University of Phoenix preying on vulnerable Americans with predatory and misleading marketing tactics. Promotional posts of the partnership on DeGeneres’ social media accounts have been removed in the wake of the public outcry, but neither DeGeneres nor representatives of her show have issued a public comment addressing the partnership, or confirmed whether or not DeGeneres was paid to air the segment. Veterans groups, many of which have called out University of Phoenix for abusing billions of GI Bill dollars to aggressively recruit returning veterans, were equally outraged that DeGeneres would lend support to a school that the federal government placed on probation for unlawful recruiting practices targeting veterans....