Income Based Repayment Plans on Student Loans

[BlueRaiderFan]

are a scam.

http://www.aacrao.org/resources/res...wers-fall-out-of-income-based-repayment-plans


Hundreds of Thousands of Borrowers Fall Out of Income-Based Repayment Plans
Posted on April 2 2015

Over half of direct student loan borrowers enrolled in income-based repayment (IBR) plans fell out of the program after failing to file their annual income documentation on time, Education Department officials revealed during a rulemaking session on Wednesday. Nearly 700,000 borrowers who enrolled in the IBR program – 57 percent of the total – missed the deadline to certify their income. The lapse sent them into standard repayment, where their monthly loan bills were higher, sometimes significantly so, The Chronicle of Higher Education reported.

A third of the lapsed direct loan borrowers re-enrolled in IBR plans within six month, another third went into a hardship-related forbearance or deferment, and some 15 percent became delinquent on their debt, according to officials. Borrowers with loans made under the former bank-based lending program missed the deadline approximately 40 percent of the time, according to loan servicers on the rulemaking panel.

Experts assume that so many borrowers are missing the deadline because they are ignoring or overlooking the renewal notices that servicers are required to send 60 to 90 days before the paperwork is due. While some servicers send out letters with brightly colored warnings like "time-sensitive" and "rush," others send generic emails that give little indication of the urgency of the task.


See link for the rest

 

[BlueRaiderFan]

How do 700,000 people fall out of a program that keeps their payments low?

 

[BlueRaiderFan]

A good video on the student loan issue. Also, drop by StudentLoanJustice.Org and sign up to help!

 

[BlueRaiderFan]

 

[BlueRaiderFan]

When I first started researching the student loan issue over a decade ago, it quickly became obvious that there was one Congressman the student lending industry loved more than anyone else: John Boehner. Sallie Mae (the nation's largest student loan company) and it's PAC gave Boehner's PAC and Campaign more money than anyone else. Boehner enjoyed trips to Boca Raton on Sallie Mae's jet to play golf. At a meeting of the Consumer Banker's Association, Boehner told the crowd "Know that I hold you in my trusted hands. I've got enough rabbits up my sleeve...". Boehner even got one of his family members a job at a student loan collection company over a game of golf!

Looking at legislation passed while Boehner was Chairman of the House Committee on Education and the Workforce, it becomes clear why the student loan industry were so generous to him. He was instrumental in killing the ability of borrowers to refinance their loans with competitors of Sallie Mae at lower interest rates. He fought hard to preserve hugely generous subsidies to lenders who assumed zero risk for the loans they made to begin with.

Most significantly, however, Boehner was instrumental in removing bankruptcy protections from private student loans in 2005. This shocking move was couched in promises from the private banks that removing bankruptcy protections would allow them to lend to more needy students and at better rates. After Boehner and friends successfully pushed this through Congress, the banks not only broke that promise, they actually began demanding cosigners (with assets to come after) for over 90% of the private loans they made. This crushed alot of people financially, and tore apart untold thousands (probably hundreds of thousands) of families.

Whatever Boehner's motivations for destroying long-standing, fundamental, free-market protections for student loans, the facts are very clear: When Boehner took leadership of the House Education Committee, the nation owed about $100 Billion in student loans. When he passed the baton in 2006, the amount had risen to over $400 billion. John Boehner will be leaving office with the nation owing close to $1.5 Trillion in student loan debt. Those numbers speak for themselves.

Boehner leaves behind a Department of Education that is just about the worst, big-government monstrosity that I can think of. It is immune to the bankruptcy protections that every other lender, whether public or private, must contend with. There are no statutes of limitations on its entire portfolio. It has a completely captive market of more than 44 million citizens, more than half of whom are currently unable to pay on their debt. It actually makes a healthy profit on defaulted loans. This should make all conservatives, and all citizens very, very worried.

John Boehner says he is not concerned with his legacy, but millions of citizens of all stripes have suffered by his handiwork, and millions more are queued up for decades of financial misery at the hands of both government and banks if, at a minimum, the standard bankruptcy and other free-market protections that should never have been removed from any lending instrument are not returned to student loans.

If I were John Boehner, I would be very worried about legacy. At least on this issue.

-Alan Collinge

 

[BlueRaiderFan]

This will effect your children and grandchildren, people. Call your reps.