It's no secret that interest rates are rising.That includes the cost of college and graduate school as well. That's one reason that college and graduate school are about to get more expensive. Here's what you need to know. Undergraduate Student Loans Interest rates for federal undergraduate student loans will rise from 4.45% to 5.05% - an increase of 0.60 percentage points, or 13.5% - starting July 1 for the 2018-2019 school year.Graduate Student Loans Graduate students will also pay more for school. The cost for a federal direct unsubsidized graduate student loan will rise from 6.00% to 6.60% - a 10% increase.PLUS Loans PLUS Loans, which both graduate students and parents of undergraduate students can use, will rise from 7.00% to 7.60% - an 8.6% increase.The Financial Impact Each year, Congress sets the fixed interest rates for federal student loans. This rate is based on the May auction of U.S. Treasury notes, and applies only to federal student loans disbursed from July 1, 2018 - June 30, 2019. This is the second consecutive year that rates have increased. Read the entire piece at Forbes...

This piece was originally published at The Washington Post. The U.S. Department of Education on Wednesday released more informationabout a temporary program to help social workers, teachers and other public servants at risk of missing out on federal student loan forgiveness because they enrolled in the wrong repayment plan. Congress included a measure in the fiscal 2018 budget for a limited expansion of Public Service Loan Forgiveness, a program that cancels federal student debt after 10 years of on-time payments for people who take jobs in the public sector. Public servants must be enrolled in specific repayment plans, primarily those that cap monthly loan payments to a percentage of their income. However, some borrowers say the loan servicing company that collects their payments led them to believe they were in the appropriate plan when they were not. Many of those borrowers can now apply to have their ineligible payments counted toward loan forgiveness. But there a few hoops to jump through. To qualify, a borrower’s most recent monthly payment and the one made a year before applying for forgiveness must be as much as they would have paid in a correct plan. Public servants must have had their loan forgiveness application rejected because some or all payments were not made under the appropriate plan. They must have at least 10 years of full-time employment certified by a qualifying employer and approved by FedLoan Servicing, the company overseeing the loan forgiveness program. The Education Department will reconsider eligibility using an expanded list of repayment plans: graduated repayment, extended repayment, consolidated standard repayment and consolidated graduated repayment. None of those plans would typically qualify under the loan forgiveness program. Borrowers must have made 120 payments under those plans while working full-time in the public sector. Lawmakers created a $350 million fund to cover the cost of canceling more loans, but once the money runs out, so will the offer. Forgiveness under this temporary program is being offered on a first-come, first-served basis. People who meet the criteria must email FedLoan at TEPSLF@myfedloan.org to request their case be reconsidered. The servicing company will contact applicants if more documentation of their income is needed. Read the entire piece at The Washington Post...

This piece was first published at The Washington Post. The Education Department plans to stop using private debt collectors to handle overdue student loans, a practice that had drawn scorn from activists who said the companies stop at nothing in pursuit of tardy loans. The decision emerged this week in a legal filing, in which attorneys for the department implored the U.S. Court of Federal Claims to dismiss a lawsuit filed by collection agencies vying for a federal contract. The attorneys say the case is no longer relevant because the Education Department is revamping the collection and resolution of overdue student debt. Instead of having private collection agencies solely dedicated to recouping past-due education loans, the department will add those duties to the responsibilities of companies that service loans. Those companies will try to help borrowers who fall behind on their payments before they end up in default. The strategy is part of a broader overhaul of the federal student loan program, a project dubbed the Next Generation Financial Services Environment, or NextGen. While the Federal Student Aid office implements its new approach, the 13 private debt-collection companies already under contract will absorb new accounts until the transition is completed. The department has yet to set a completion date. “Federal Student Aid’s need for private collection agency services as a function separate from the work provided by the enhanced servicer(s) will diminish rapidly in the coming months and ultimately become nonexistent,” the attorneys said in the court filing. The private collection agencies involved in the case could not immediately be reached for comment. The Education Department’s use of collection agencies has long been a point of contention among liberal lawmakers and advocacy groups. Critics say the private firms pursue collection at all costs, with no consideration for providing borrowers with sustainable solutions to managing their debt... Read the entire piece at The Washington Post...

Paying student loans for the first time? Here's what you need to know Borrowers can’t erase their federal student loans in bankruptcy unless they can prove that repaying them would cause an “undue hardship” — a standard created, but never defined, by Congress. Instead, the courts have defined the standard. In order to have their debt discharged in most jurisdictions, those struggling borrowers must prove they can’t maintain a minimal standard of living if they pay down the debt, that the situation won’t change in the future, and that they’ve made some effort already to pay down the loan.It’s relatively rare for borrowers to even attempt to have their loans discharged in bankruptcy. That’s in part because they may struggle to afford a lawyer. But the government may also take a tough approach... Read the entire piece at MarketWatch...

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This was originally published at the New York Times. Homeownership among Americans in their 20s and 30s is hovering near a three-decade low. Just 35 percent of households headed by someone younger than 35 owned a home in 2017, down from 41 percent in 1982, according to census data. Now, they are much more likely to be living at home with their parents or elders. At the same time, the nation’s student loan bill has soared to $1.4 trillion, surpassing credit cards to become the largest source of personal debt outside mortgages. A broad set of headwinds is holding millennials back from buying homes. Underwriting standards have become stricter in the last decade, making it more difficult to get a mortgage. Many young people are moving to cities where they can only afford to rent — a problem that has been compounded as home prices have soared while wages have barely outpaced inflation. And recent research suggests that the explosion in tuition costs and student debt is another significant force keeping many millennials out of the home buying market. An analysis published by the Federal Reserve Bank of New York last year suggests that student debt was responsible for up to 35 percent of the decline in homeownership among people between the ages of 28 and 30 from 2007 to 2015. (Homeownership for people under 28 tends to be low.) If student debt levels had stayed where they were in 2001, more than 360,000 people in that age group would have owned a home in 2015, according to those findings. “If people had the same levels of student debt as about 20 years ago, they probably would be buying a lot more homes than they are buying now,” said Wilbert van der Klaauw, an economist at the New York Federal Reserve and an author of the study. Read the entire piece at The New York Times...

This piece was originally published at Glamour. Graduation season is upon us, and it's a time of celebration across the nation. But a new report revealed that seven out of 10 women will leave school this month not just with a diploma: Over 70 percent will also have to pack up student debt as well. New data released this month by the American Association of University Women finds that women owe around $2,700 more than men do at graduation. Crunch the numbers, and arrive at this stunner of a statistic: Women hold two thirds of the $1.4 trillion in student loans in the United States. That’s $890 billion—still more than the GDP of Austria and Norway combined—and $400 billion more than men. For at least the last decade, candidates for elected office have touted plans to make higher education more affordable, and progressive politicians have put forth bold policies to address the problem. But few have been explicit about its gender breakdown. Women bear a disproportionate brunt of the national student debt, and that has and continues to cost them billions in lost wealth and missed opportunities. Of course, some of that burden stems from the fact that more women enroll in American universities than men do. At the undergraduate level, women account for 56 percent of all students. But even that number doesn’t explain the share of debt women owe. As AAUW senior vice president of public policy and research Deborah Vagins notes, just one factor can explain the the stark differential: the wage gap. We’ve insisted for decades now that women pursue advanced education, the better to secure good salaries and more skilled work. And that’s great, Vagins adds. But after graduation and at the federal level, the nation hasn't done enough to ensure that those women are compensated at the same rates as men. The wage gap kicks in as soon as women enter the job market, which means that, from the start, they have fewer resources to pay back loans.. Read the entire piece at Glamour...

submitted the Public Service Loan Forgiveness (PSLF): Application for Forgiveness(PSLF application) and had that application denied only because some or all of your payments were not made under a qualifying repayment plan for PSLF; had at least 10 years of full-time employment certified by a qualifying employer and approved by FedLoan Servicing, ED’s federal loan servicer for the PSLF Program; and made 120 qualifying payments under the new requirements for TEPSLF while working full-time for your qualifying employer or employers.TEPSLF is available only to Direct Loan borrowers. Borrowers with loans made under the Federal Family Education Loan (FFEL) Program are not eligible for the opportunity. Your eligibility for PSLF will be reconsidered only if you send an email request for reconsideration. Please be aware that the TEPSLF opportunity is temporary, has limited funding, and must be evaluated on a first come, first served basis. Prepare an email to FedLoan Servicing requesting that ED reconsider your eligibility for PSLF. Include the same name under which you submitted your PSLF application and your date of birth in the email. Send the email to TEPSLF@myfedloan.org.Here’s a model you can follow: To: TEPSLF@myfedloan.orgSubject: TEPSLF request  I request that ED reconsider my eligibility for public service loan forgiveness. Name: Date of Birth:   Thank you. You are being considered for TEPSLF because you applied for PSLF and had your application denied. FedLoan Servicing will contact you again once the review is complete or if they need additional information. You have a PSLF application under review and if you are not determined to be eligible for loan forgiveness under the PSLF Program, your eligibility for the TEPSLF opportunity will be evaluated automatically because you have already sent your email request for reconsideration. FedLoan Servicing will contact you again once the review is complete or if they need additional information. You are not eligible for TEPSLF at this time because you have not applied for PSLF and had your application denied.To be eligible for PSLF, you must have made 120 qualifying payments on Direct Loans while being employed full-time by a qualifying employer. If you receive this message and believe you are eligible, you should fill out the PSLF application. Visit StudentAid.gov/publicservice for information about PSLF eligibility requirements and how to apply.

Public Counsel (Los Angeles) Public Law Center (Orange County) Housing and Economic Rights Advocates (Nor Cal) East Bay Community Law Center (Nor Cal) Bay Area Legal Aid (Nor Cal) Legal Aid of San Diego (San Diego) Harvard Law School Project on Predatory Student Lending (Massachusetts) New York Legal Assistance Group (New York)

This piece was originally published at USA Today. Thousands of U.S. student loan borrowers who work as teachers, police officers, nurses, or in other public service jobs may soon benefit from a $350 million one-time expansion of a federal program that could forgive their remaining debt. A compromise in the $3.1 trillion federal spending billsigned Friday by President Trump includes a one-time reprieve for borrowers who feared they'd missed the chance to get out from under often-crippling student loan debt that makes it hard to buy a home, start a family, or pay day-to-day bills. "I'm very glad that, for the first time, we got some money to help public servants unfairly trapped under a mountain of debt," said Sen. Elizabeth Warren, D-Mass., who fought for the reprieve. But she stressed that fight for a "permanent fix" to the estimated $1.4 trillion in U.S. student loan debt goes on. Created in 2007, the program was designed to help student loan borrowers in public service jobs get their remaining debt forgiven if they made 120 repayments, roughly 10 year's worth, under a qualifying repayment plan. Each repayment must be made in full and on time. The borrowers must work full-time for a qualifying employer, such as a federal or local government agency, or an eligible non-profit organization. The program is limited to student borrowers who took out direct loans from the federal government. Private loans and non-direct government loans don't qualify. However, borrowers may qualify if they consolidate their existing debt into direct loans. Their repayment clocks start when they do. Borrowers must be enrolled in a qualifying repayment program. There are nine student loan repayment options. Some qualify; others don't.. Read the entire article at USA Today...

This piece was originally published at CNBC.It may be getting easier for some disabled veterans to erase their student loan debt. The Department of Education announced Monday that it will partner with the Department of Veteran Affairs to identify disabled student loan borrowers who are eligible for debt forgiveness. Such borrowers will be notified of their potential eligibility in the mail and will also receive a Total and Permanent Disability Discharge application, the avenue though which borrowers with severe physical impairments are approved to erase their debt. Such outreach is needed: Many disabled veterans are currently unaware that they can be eligible for student loan debt forgiveness, said Carrie Wofford, president of Veterans Education Success, a nonprofit advocacy group. "It's horrific," Wofford said "There are disabled veterans who served their country who are financially struggling — and sometimes destitute — who are legally entitled to have their student loans forgiven but it's not happening." Indeed, there are likely "tens of thousands" of severely disabled veterans who aren't aware of their federal student loan forgiveness options... Read the entire article at CNBC...

Graduate students, alongside other people with education debt, were also up in arms over a proposal to eliminate the student loan interest deduction. The deduction lets people repaying student loans reduce their tax burden by as much as $2,500. Because borrowers can claim the deduction even if they choose not to itemize, the tax benefit is available to anyone paying interest on education debt. The higher the interest payments, the greater the deduction, which is why the benefit is especially valuable to people with large loan amounts, such as graduate students... Read the entire piece at The Chicago Tribune...