This piece was originally published at Forbes. When you look at student loan debt statistics, the picture is pretty scary. With more than $1 trillion in outstanding student loans, it’s no surprise that millions of Americans feel trapped. You might be one of those graduates feeling trapped by student loan debt. The thought of that debt hanging over your head for years to come can have you looking for a solution that takes the stress away. The good news is that there are plenty of programs available to help you manage and repay your student loans. The bad news is that, like so many things in life, there are people out there looking to take advantage of your situation, too. As you consider how you can get a handle on your student loan debt, make sure you are working with a reputable company. Watch for these signs of a student loan scam: 1. Upfront payment required One of the biggest signs of a student loan scam is the requirement for upfront payment. Anyone who asks you to pay for student loan debt relief before any services have been performed is likely a scammer. There are plenty of resources that don’t charge you for student loan debt help. In fact, in some states, it’s illegal to charge fees for debt settlement services. If a company promises to settle your student loan debt or consolidate your loans for an upfront fee, hang up the phone immediately. 2. Promises of student loan forgiveness Another common student loan scam is the promise of student loan forgiveness through a private company. Examples include the “Obama Student Loan Forgiveness” program and the Student Loan Relief Center that gained attention earlier this year via Blac Chyna’s Instagram posts. Neither of these are legitimate federal programs that result in student loan forgiveness. In fact, no private company that advertises a “special program” to help you get forgiveness at a cost is legitimate... Read the entire article at Forbes…

This piece was originally published at MarketWatch. The kids still aren’t alright. Despite economic and stock market gains over the past nine years, many young adults are still struggling to get ahead in their financial lives and, in some ways, things may have actually gotten worse. Americans age 25 to 34 with college degrees and student debt have a median net wealth of negative $1,900, according to a report analyzing 2016 Federal Reserve data released Thursday by Young Invincibles, a young adult advocacy group. That’s a drop of $9,000 from 2013, YI’s analysis found. Though it’s likely that these young adults with college degrees will ultimately pay off their student loan burden, the report captures a moment in time when servicing student debt may pose an obstacle to this group’s other financial goals, like saving for retirement or a home. “The economy is supposed to be doing really, really well,” said Tom Allison, the deputy policy and research director at YI and the author of the report. “But these short term gains are barely making a dent on young people’s long term plans.” It’s hard to say exactly why the median net worth of young adults with college degrees dropped during this period, but Allison speculates that one reason may be that in 2016, student debt accounted for a larger share of overall debt for these young people than it did in 2013. And unlike other types of debt, such as a mortgage, student loans don’t come with an asset that could apply on the other side of the net wealth equation. A generation that entered adulthood during an economic downturn The paper is just the latest evidence of the financial challenges faced by a generation of people who came into young adulthood during a major economic downturn. Compounding the challenges of finding a first job amid stagnant wage growth — and, for some older millennials, a high unemployment rate — today’s young adults are the first cohort for which student debt is a necessity for most who pursue a college degree. About 70% of bachelor’s degree recipients graduate with student loans. Read the entire article at MarketWatch…

This piece was originally published at New York Post.Student debt has been a $1 trillion problem for at least six years. Six years ago, on April 25, 2012, activists took to the streets to mark the country’s outstanding student loan debt surpassing $1 trillion. And in the years since, many of the trends that pushed student debt levels to climb have persisted, and in some cases, they’ve gotten worse. Focusing on the $1 trillion mark is somewhat “arbitrary,” given that it doesn’t change the debt burdens individuals are managing every day, said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank. (Outstanding student debt reached $1 trillion during the second quarter of 2012, according to the Federal Reserve, which includes April.) Still, Huelsman said these kinds of “big round numbers” can help galvanize people around the issue. “Rising student debt has really happened over a 20-year period,” he said. A variety of trends are fueling that growth. At the same time that the cost of college has climbed — caused in part by state disinvestment in public higher education — a college degree has become more necessary to earn a decent living. That means that as more people are attending college, they’re increasingly relying on debt to finance their schooling, pushing the level of overall student debt up. Sluggish wage growth and the rising cost of other necessities, such as child care, also mean that families have less money to rely on to pay for school. And once students leave college, those stagnant wages can make it difficult for them to pay down their debt effectively... Read the entire article at New York Post…

This piece was originally published at CNBC. Student loan debt has become a major barrier to home ownership in America. Some 45 million people in the United States carry student debt. The average borrower owes more than $30,000, according to Student Loan Hero, a website for managing education debt. Almost a fifth owe more than $100,000, according to the National Association of Realtors. People's monthly student loan payments can eat up a large slice of their income, threaten to push down their credit scores and make saving nearly impossible — all huge impediments, of course, to landing in a house. For every 10 percent in student loan debt a person holds, their chance of home ownership drops between 1 and 2 percentage points during their first five years after school, according to the Federal Reserve. More than 80 percent of people ages 22 to 35 with student debt who haven't bought a house yet blame their educational loans, according to the National Association of Realtors. "Student loan debt holders do want to own a home, that's part of their American dream," said Jessica Lautz, managing director of survey research at the National Association of Realtors. "It's just really hard to get there right now."... Read the entire piece at CNBC...

This piece was originally published at New York. Late last year, congressional Republicans passed a $1.5 trillion tax cut, which delivered the lion’s share of its benefits to the wealthy and corporations. The GOP did not justify this policy on the grounds that all corporate shareholders and trust-fund hipsters deserved to have their wealth increased. Rather, the party argued that, however one felt about making the rich richer, the tax cuts would ultimately benefit all Americans by increasing economic growth and lowering unemployment. But what if we could have achieved those objectives, at roughly the same price, by forgoing tax cuts — and wiping out every penny of student debt in the United States, instead? A new research paper from the Levy Economics Institute of Bard College suggests this was, in fact, an option. In America today, 44 million people collectively carry $1.4 trillion in student debt. That giant pile of financial obligations isn’t just a burden on individual borrowers, but on the nation’s entire economy. The astronomical rise in the cost of college tuition — combined with the stagnation of entry-level wages for college graduates — has depressed the purchasing power of a broad, and growing, part of the labor force. Many of these workers are struggling to keep their heads above water; 11 percent of aggregate student loan debt is now more than 90 days past due, or delinquent. Others are unable to invest in a home, vehicle, or start a family (and engage in all the myriad acts of consumption that go with that). Thus, if the government were to forgive all the student debt it owns (which makes up more than 90 percent of all outstanding student debt), and bought out all private holders of such debt, a surge in consumer demand — and thus, employment and economic growth — would ensue... Read the entire piece at New York...

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Today's job market can be difficult, especially for those without a college degree. So, the question has grown; should employers help their workers pay back their student loan debt? Here's a deeper look at what is becoming the newest employee perk. This piece was originally published at Forbes. As young people continue to enter the workforce already weighed down by high amounts of student debt, some companies are taking notice. By offering initiatives to help their employees manage and pay back their loans, they relieve some of that strain (and become a more attractive place to work in turn).Here's why this matters, the benefits these programs can have for employees and their employers, and how some companies are currently offering student-loan-related benefits. Why Student Loan Assistance Matters In America, student-loan debt has reached critical levels in the past decade. "The average cost of a college education has increased by 1300% since 1971, far outpacing inflation or wage growth," says Leigh Gross, vice president of business development at CommonBond. "At the same time, the pressure to obtain a bachelor’s or graduate degree to achieve career success has only gotten stronger." For many, it's the classic "rock or a hard place" scenario: either take on debt to get an education and a well-paying job, or avoid debt and work in fields that don't require a degree but often have less career-advancement opportunities. Young people who choose the college route must “take out larger loans to pay for school and access job opportunities," Gross continues. "And these are loans that they often spend the better part of their careers paying off. The good news is, companies are increasingly becoming more cognizant of this student debt crisis and want to be part of the solution.” ... Read the entire piece at Forbes...

Discharging student loan debt in bankruptcy can be very difficult for most borrowers. That means that many Americans have no way out from under crushing student loan debt. The new chairman of the Federal Reserve discussed the issue and addressed opportunities to make it easier for people with unmanageable student loans to file bankruptcy, read more below. This piece was originally published at MarketWatch Congress has never defined 'undue hardship' for student debt. The new chairman of the Federal Reserve questioned why struggling borrowers can’t discharge their student loans in bankruptcy.“Alone among all kinds of debt, we don’t allow student loan debt to be discharged in bankruptcy,” Jerome Powell told members of the Senate Banking Committee Thursday. “I’d be at a loss to explain why that should be the case.” Powell’s comments came in response to a question from Senator Brian Schatz, a Democrat from Hawaii, about whether high levels of student debt create a drag on the economy. More than 40 million Americans hold nearly $1.4 trillion in outstanding student loans. While Powell noted that, in general, policymakers should foster the idea that Americans can borrow to invest in themselves, he said it’s important that borrowers understand the nature and risks of borrowing, and expressed concern about the treatment of student loans in bankruptcy. Congress has never defined ‘undue hardship’ for student debt Powell’s comments come as the Department of Education is looking for input on the way student loans are treated in bankruptcy. Congress passed a series of laws beginning in the 1970s that banned borrowers from discharging their student loans in bankruptcy unless they’re experiencing “undue hardship.” Congress never defined that phrase, but the courts have interpreted it to mean a relatively high standard... Read the entire piece at MarketWatch...

A House GOP proposal called the "PROSPER Act" would replace current income-driven repayment plans. The existing plans are designed to make payments affordable for millions of Americans with federal student loans. Additionally, the bill proposes the elimination of the Public Service Loan Forgiveness (PSLF) program. Congress created the forgiveness program in 2007 to help vital, but often underpaid, public service workers pay for college, but PSLF is on the chopping block. Here is a piece by The Washington Post covering the Congressional Budget Office's estimates and the impact this bill will have on the lives of Americans with student debt. This piece was originally published at The Washington Post. “The bill forces students to borrow more and then pay more to repay their loans.” College students would lose $15 billion in federal student aid over the next decade if House Republicans succeed in turning their higher education bill into law, according to a reportreleased Tuesday by the nonpartisan Congressional Budget Office. The Promoting Real Opportunity, Success and Prosperity through Education Reform Act, sponsored by Reps. Virginia Foxx (R-N.C.) and Brett Guthrie (R-Ky.), aims to overhaul the federal law governing almost every aspect of higher education. The 590-page bill cleared the House Committee on Education and the Workforce in December, without hearings and despite calls from the higher education community for more input and time to analyze the legislation. Democrats on the committee, who were cut out of drafting the bill, have slammed the legislation for slashing some student aid programs, while funneling more federal dollars to controversial for-profit colleges. “The CBO’s score confirms what we already knew to be true – this bill makes college more expensive for America’s students and working families,” said Rep. Bobby Scott (D-Va.), ranking member of the House Education Committee. “The bill forces students to borrow more and then pay more to repay their loans.” The legislation has garnered mixed reviews. Some policy analysts and student advocates have praised it for using grants to provide incentives for students to graduate in four years, for eliminating student loan origination fees and for expanding work-study opportunities for low-income students. “The reforms within the PROSPER Act are necessary to provide students with a high-quality education, and fix a system that has not been serving their needs,” said Michael Woeste, a House Education Committee spokesman. “Not only have we been able to put forward major reforms that improve the postsecondary education system for students like the expansion of Pell grants . . . but we have shown that those major reforms can be done while still being fiscally responsible.” But some worry the bill could raise the cost of college for students who can least afford it by no longer paying the interest on low-income students’ loans while they are in school and limiting their repayment options once they graduate... Read the entire piece at The Washington Post...

Under the federal government's Public Service Loan Forgiveness program, student loan borrowers who work in a qualifying public service career are eligible for student loan forgiveness after 10 years of repayment. The first round of qualifying borrowers could apply starting October, 2017. However, the Department of Education refuses to state the number of borrowers, if any, who have actually received student loan forgiveness under the Public Service Loan Forgiveness program to-date. Here is a piece by CNN that digs deeper. This piece was originally published at CNN.com The Public Service Loan Forgiveness Program turned 10 last year. So far, about 7,500 people have applied to have their student loans discharged, but fewer than 1,000 are expected to qualify this year, the Department of Education has told CNNMoney. The forgiveness program was created in 2007 under President George W. Bush. Borrowers who work for the government or a non-profit can apply to have their remaining debt wiped away after making 10 years of payments. It was meant to encourage people with student debt to remain in lower-paying jobs that serve the public -- like public defenders, social workers, and Peace Corps workers. October of 2017 was the first time anyone could have made enough monthly payments to qualify for debt forgiveness. About 7,500 people had applied for forgiveness as of January 5. But the Department of Education was "unable" to say whether any had been approved or rejected to date, a spokeswoman said in an email. If just 1,000 are deemed eligible over the first year as the department expects, that would represent about 13% of those who have applied. The low number is partly due to the limited pool of borrowers who were eligible for the program when it first launched, according to the Department of Education. Dozens of borrowers have told CNNMoney they believed they were making qualified payments when they weren't -- blaming their loan servicers for providing them with misinformation. Some say they planned their careers around the program, only to learn years later that their loan payments did not qualify... Read the entire piece at CNN Money

Every month, approximately 40 million Americans make payments to a corporation they know almost nothing about. There are just four major companies contracted by the federal government to process the nation’s student loan checks and after the just-completed merger of two of these firms — Nelnet Inc. NNI, -0.78% and Great Lakes Educational Loan Services Inc. — one company will handle more than 40% of all payments.While it might not seem to matter who processes the payments, these companies have an outsize role in the shape of America’s $1.4 trillion student-loan burden. Though the rising cost of college and stagnant wages are the most cited reasons for our nation’s student-debt problems, borrower advocates, law-enforcement officials and the Consumer Financial Protection Bureau have said the student-loan industry itself is also to blame. These processors can often make the difference for struggling borrowers between successfully paying down a debt and the nuclear option — default. In an ideal world, no federal student-loan borrower would default on his or her debt, thanks to the myriad of programs available through the government, but, in reality, roughly 1 million defaulted last year — a sign, advocates say, that student-loan servicers don’t work sufficiently in borrowers’ best interests. Read the entire piece at MarketWatch.com...

President Trump released his Fiscal Year 2019 Budget Proposal – a devastating blow to higher education funding that has created uncertainty for millions of Americans paying for college or managing their student loan debt. The plan cuts $200 billion from student aid programs over the next decade. It eliminates subsidized student loans that keep interest costs low for recent graduates. The proposed budget also replaces existing income-driven repayment plans, which millions of people currently use to lower their monthly payments. Even worse, President Trump’s budget completely eliminates the Public Service Loan Forgiveness program that has been promised to student loan borrowers for nearly a decade. Here is a piece by CNBC covering the administration's proposal. This piece was originally published at CNBC. Higher education faces massive changes in President Donald Trump's spending plan. The proposal unveiled would sharply curtail income-based loan repayment plans, scratch the Public Service Loan Forgiveness Program, embolden the government to go after students who don't pay their loans and cut funding for federal work study in half. Changes to loans would apply to borrowing after July 1, 2019, not including those loans provided to borrowers to finish their current education. The budget would eliminate subsidized loans. Some 5.7 million students had subsidized loans in the 2016-2017 academic year, according to Mark Kantrowitz, a student loan expert. The budget plan also would narrow the number of income-driven repayment plans — in which people pay back their loans at a rate that takes into consideration their income — from four to just one. Under that option, students' monthly payments would be capped at 12.5 percent. Students generally pay 10 percent of their discretionary income under current income-based repayment plans. However, undergraduate students would have their loans forgiven after 15 years, compared with 20 years now. So they'd be paying more per month, but less overall. Graduate students, meanwhile, would not have their loans forgiven for 30 years... The Public Service Loan Forgiveness Program is eliminated in the proposed budget. This program allows former students who fulfill certain public service positions — such as public school teachers or health researchers — to have their loans erased after 10 years of on-time payments. Nearly two-thirds of student loan borrowers who've shown interest in the Public Service Loan Forgiveness earn less than $50,000 a year... Read the entire piece at CNBC...