student loans

There's a new book out about the student loan crisis, or what author Sandy Baum suggests is a "bogus crisis." Baum, a financial aid expert and senior fellow at the Urban Institute, claims it has been manufactured by the media in search of a spicy story and fueled by politicians pushing "debt free college" proposals.

We had a few questions for Baum about the book, Student Debt: Rhetoric and Realities of Higher Education.

We all know that American college education isn't cheap. But it turns out that it's even less cheap if you look at the numbers more closely.

That's what the Wisconsin HOPE Lab did. The lab, part of the University of Wisconsin-Madison, conducted four studies to figure out the true price of college.

To get a sense of student realities, researchers interviewed students on college campuses across the state of Wisconsin. But they also examined 6,604 colleges nationally and compared their costs with regional cost-of-living data from the government.

President Obama has increased college aid by over $50 billion since coming into office. And he's trying to do more.

Acting Education Secretary John King announced two new proposals today that would expand the Pell Grant program, the biggest pot of federal money for students with financial need:

  • Year-round Pell. Currently, students are only eligible for two semesters of Pell grants in a school year. Today's proposal would allow students to get extra money to cover a third session of, say, summer courses.

Even some of those seeking the nation's highest office have weighed in on college debt with payment plans and relief proposals. Voters and the media ask for details on the campaign trail. And that highlights a remarkable shift: Policymakers and politicians are paying attention to this issue like never before.

And it's not as simple or cynical as trying to woo the important student vote. The fact is, the student loan burden in America is second only to mortgages in consumer debt. The government estimates that some 41 million students together owe more than $1.2 trillion.

Here's what I remember about the beginning of the night: I'd planned to stay up late, for work. Later than usual, to watch President Obama's State of the Union address.

It was cold outside, January in D.C. A snowstorm was coming, and the digital antenna for my TV wasn't behaving. I was getting up often to adjust it.

I also remember the president had a lot of energy. It was 2014 and the economy was finally in shape. He wanted to make sure we knew.

About an hour into the speech, he got to the part about education, and said something that changed my life:

Look closely.

Buried deep in President Obama's 2016 budget (Page 41) is a proposal to cut up to 30 questions from the Free Application for Federal Student Aid, or FAFSA.

The Obama administration has already done a lot to make the FAFSA easier — if not shorter. Online technology now allows students to skip questions that don't apply to them.

Today the Education Department released long-awaited details on a plan to hold colleges accountable for their performance on several key indicators, and officials said they'll be seeking public comment on the proposals through February.

"As a nation, we have to make college more accessible and affordable and ensure that all students graduate with a quality education of real value," Education Secretary Arne Duncan said in a statement.

Kentuckians default on student loans at one of the highest rates in the U.S.

About 11,700 people had defaulted on student loans they were supposed to begin repaying in 2011 for attending a Kentucky college, according to data released Wednesday by the U.S. Department of Education. 

That puts Kentucky's default rate at 17.5.

midcontinent.edu

  Mid-Continent University students who are unable to finish their programs due to the institution’s closure may not have to pay their federal student loans.

The Department of Education says students who do not transfer and do not finish the program they started at Mid-Continent are eligible for discharges on direct and Federal Family Education loans. But Kentucky Higher Education Assistance Authority Executive Director Carl Rollins says getting a loan discharged isn’t necessarily the best option for Mid-Continent students.

The interest rate on government-backed student loans is going to jump from 3.4 percent to 6.8 percent Monday.

Republicans, Democrats and the Obama administration could not agree on a plan to keep it from happening. Lawmakers say a deal is still possible after the July 4 recess. But if they don't agree on a plan soon, 7 million students expected to take out new Stafford loans could be stuck with a much bigger bill when they start paying the money back.

It has been one of the more heated debates in Washington this year.

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