In the News: Battle Lines Drawn on a Student Loan Alternative

June 13, 2019

By: Andrew Kreighbaum

Inside Higher Ed

Senator Elizabeth Warren and other congressional Democrats delivered a warning on Tuesday about the potential dangers of income-share agreements, an alternative form of college financing increasingly popular with some critics of student loans. The lawmakers’ primary target was the Trump administration — which has expressed interest in experimenting with the agreements — but the shot across the bow also aimed at colleges operating their own ISA plans.

Income-share agreements offer students financial support up front and in exchange require them to repay a portion of their income for a set number of years. They first caught on at coding boot camps and similar programs that don’t receive federal student aid. But a handful of four-year colleges have begun offering their own ISA plans and, last month, the Trump administration said it planned to pursue a federal experiment to offer income-share agreements to students.

Click link below to read more:

https://www.insidehighered.com/news/2019/06/05/democrats-take-aim-student-loan-alternative-and-colleges-offer-income-share

 

In The News: At HBCUs, crushing student loan debt is a symptom of even bigger problems

June 11, 2019

By Dartunorro Clark

MSNBC News

When Michael Sorrell became president of Paul Quinn College 12 years ago, he assessed the dire situation his school was in and made a bold choice: No more football.

“I mean, we’re in Texas. We’re an HBCU in Texas,” Sorrell said. “I got a little flak for that, OK?”

But to him, eliminating the program was the only way the historically black college in Dallas, which was founded in 1872 by a group of preachers from the African Methodist Episcopal Church to educate freed slaves and their children, could get back on track.

Football had cost the school roughly $600,000 to $1 million a year, he said, and scholarships went mainly to the players. Meanwhile, other students struggled, faculty and staff members were leaving, and buildings had fallen into disrepair.

“We were roughly 18 months to 24 months away from closing. We had financial problems. We had academic problems. We had morale problems, and it was the prototypical scenario for an institution that had been struggling for a long time and the end of the road was coming,” he told NBC News in a phone interview.

The challenges Paul Quinn College faced are not unique, experts said, even if its solution was one of a kind.

Click link below to read more:

https://www.nbcnews.com/politics/politics-news/hbcus-crushing-student-loan-debt-symptom-even-bigger-problems-n1014171

 

In the News: Education company Chegg is helping pay down its employees’ student loan debt. ‘They are creating value for us’

June 7, 2019

— CNBC’s Annie Nova contributed to this report.

https://www.cnbc.com/amp/2019/06/06/chegg-is-helping-pay-down-its-employees-student-loan-debt.html

Chegg has a new plan to help its employees deal with their student loans.

And its CEO wants other companies to follow Chegg’s lead.

The student-connected learning platform announced a new program Thursday that will give its entry- through manager-level workers up to $5,000 a year, if they have been with the company at least two years. Director- or vice president-level employees can get up to $3,000 annually to help pay down their student loan debt.

“Corporations need to play a role here,” Chegg CEO Dan Rosensweig told CNBC’s “Closing Bell” on Thursday.

“We are the beneficiaries of those people who have gotten an education — doesn’t matter if it is four year or two year or even if they completed it,” he added. “If they borrowed money and they are creating value for us, we want to help them.”

Student loan debt has hit record levels, with borrowers owing a total of $1.5 trillion. About 7 in 10 college graduates have education debt.

“We are taking our most vulnerable, least financially stable and we’re creating a burden on them that is unsustainable.” -Dan Rosensweig, Chegg CEO

Many also are unable to find ways to pay their bills. More than 1 million borrowers go into default each year. By 2023, its projected that 40% of borrowers may default on their student loans.

Chegg’s latest benefit is in addition to the $1,000 cash that its employees with student debt already receive each year. To pay for the program, called Equity for Education, Chegg created an equity pool from its existing stock.

“We’ve got a mess and it’s probably the biggest economic crisis facing this country. And we don’t deal enough with it,” Rosensweig said.

The Santa Clara, California-based company certainly isn’t the only business helping workers with some sort of student loan debt assistance.

Student loan debt

Getty Images

Last year, Fidelity began to offer companies a way to contribute to their employees’ education debt with its Student Debt Employer Contribution program. It now has more than 65 companies that are offering, or in the process of offering, the benefit.

“A growing number of companies are increasingly aware that helping their employees take on the issue of student debt can help improve their overall financial wellness, which can in turn have a positive impact from a business perspective in a host of ways,” said Asha Srikantiah, head of Fidelity’s Student Debt Employer Contribution.

In fact, Fidelity has already seen an improvement in attracting and keeping top talent since it started offering the program to its own employees in 2016.

“For eligible Fidelity employees from 2016-2018, we’ve seen an approximate 75% reduction in turnover in the first year of program participation,” Srikantiah said. “And, according to a recent internal survey, it’s among the top two reasons people decided to join Fidelity.”

Still, the companies that offer this type of benefit remain the minority. About 4% did so in 2018, according to the Society for Human Resource Management.

Chegg’s CEO said his company thought long and hard about how to come up with a program that other companies can copy.

“We wanted to see if we could set an example and create a dialogue,” Rosensweig said.

He’s also hoping the government and colleges take notice of Chegg’s plan and do their part to help with the crisis.

“We are taking our most vulnerable, least financially stable and we’re creating a burden on them that is unsustainable,” Rosensweig said.

 

It’s Spring Break, Not Spring Broke: $63,971.03 Paid, $21,337.04 Till Payoff

Dear Parents, Friends, and Loved Ones,

Please pass this along to the college students in your life. Spring break is upon us, and they are being tempted to jump on planes and make it rain with tuition refunds.

Remind Them They Are Students:
Don’t ignore your college work over Spring Break. Use the week to relax from the regular grind, but stay in the habit of studying for school.

I think a lot of us dream of spending Spring Break on a beach with friends. Whatever your plans, use the time to continue being a student.

Encourage to Think Beyond Spring Break:
When I was a student, I found keeping this balance let me enjoy my break while also helping me stay caught up with the schoolwork to come. I was also less stressed when the break was over.

I’m not suggesting you lock yourself in your room and do nothing but school work. That will lead to burnout. Remember, balance is the key. Use the week to relax, but also keep up the routine of having study time:
• Continue doing classwork each day on your regular schedule.
• Schedule time to have fun and catch up with friends.

Prepare for The Next Academic Year & Career:
Besides the no-brainers of exercising and eating healthy, here are a few other things to do during Spring Break. The suggestions below will take time, so extend yourself some grace. For help, visit your college’s Career Services office when it reopens.
• Start working on a generic cover letter.
• Find a summer internship or job.
• Apply for scholarships.

Assess Your Finances:
If you can’t afford to jet set with classmates, just don’t go. Just imagine yourself in your career after graduation taking paid vacations from work. You will soon be a working professional who can afford multiple international trips a year-if you practice good money habits today.

Remind Them of Possible Financial Ruin:
For the last 7 years and 9 glorious months, I’ve been paying back student loans. Do you really want this in your future? Do yourself a favor, sacrifice what you want now for a future that’s a little more comfortable. Below is my balance update. Until next time everyone! Stay strong, fight on, and let’s help the youth have no debt but love.

Student Loans Are Stressful!/I’m Going Bald: $60,548.56 Paid, $24,759.51 Till Payoff

We have all read the nightmare stories of student loans wreaking havoc on the personal finances of the young and old.  Here’s another thing student loans may cause… HAIR LOSS! DUN-DUN-DUUUUN!!! Haha.  Life isn’t meant to be lived seriously all the time, so I decided to post about my male patterned baldness haha.

Going bald is a pain for me, as I have placed a bit of my identity in the strength of my hairline.  Yeah… kind of silly.   This past November, I stressed tremendously about my son starting daycare with his sister.  I was on paternity leave at the time and the stress wasn’t about missing my son per se… it was the pressure to provide for two kids in daycare lol.

Yet the Lord provided and continues to provide.  My nights became sleepless as I wondered how we would make it with my student loans, regular monthly expenses, and now daycare for 2.  I was prepared to reduce my student loan payment to make things work.  I grew frustrated thinking about all the progress made in reducing the debt to only watch it creep back up.

I was literally going bald at the top of my head due to stress, check out the picture.  

The elders in my family with wrinkly, low-hanging, bubbled lips would say, “Boy, the Lord is never surprised”.  To which I would immediately exhale audibly and roll my eyes.

Soon everything became too much, I broke down and decided to challenge the Lord with Psalm 127:3-5 (NIV), “Children are a heritage from the Lord, offspring a reward from him.  Like arrows in the hands of a warrior are children born in one’s youth.  Blessed is the man whose quiver is full of them”.

I didn’t feel blessed at the time. After I decided to relinquish control as Proverbs 3:5-6 instructs, “Trust in the Lord with all your heart and lean not on your own understanding; in all your ways submit to him and he will make your paths straight”.

My family follows a strict budget and my wife isn’t too thrilled about it.  However, there is more than enough every month.  The provision doesn’t make any sense, as we should be in the negative.  We may not have always have we want, but we always have what we need.

My hair even grew back, check out the waves HAHA.  Hair is a trivial matter in the grand outlook of life, my razor is ready to “Come On Home” and join the pantheon of bald greats-Dwayne Johnson, Michael Jordan, and Vin Diesel

Below is an update on my student loan balance.  I have no choice but to give thanks to the Lord, for he is good!  His faithful love endures forever. -Psalm 136:1

Impostor Syndrome-The Progress Continues

I didn’t intend to write and post on a holiday break from work.  However, it weighs heavy on me.  Today, the United States commemorates the life and accomplishments of Dr. Martin Luther King Jr.  He was a man who stood firmly for what he believed in, that we are all created equal by a holy and sovereign God.  His dream was for a united America, not just for unity’s sake but under a righteous God.

It’s interesting to recount how little regard I have placed for the sacrifices of the nation’s founders and my forefathers.  In my ignorance I have failed to understand the significance of the freedoms enjoyed today.  In my freedom, I believed it gave me license to ignore, disrespect, and berate.

You are seen as hateful if you have a different opinion.  Dr. King had a radical difference of opinion.  The truth is what guided him were the traditions of Judeo-Christian values, he was a Baptist minister.  Today, these values are under attack.

Politicians and their constituents are believing that the United States isn’t “that great” or ever “great” to begin with.  If that were so, what were tears shed, blood spilled, and lives lost for?  Besides every day people suffering and dying for ideals, Presidents have paid with their lives as well,

This country has a long standing tradition of seeking to improve the lives of our fellow brothers and sisters.  Let us not fall victim to…

There are days I want to give up.  There are even more days doubt sets in about my capabilities, but then I remember the following.

We can’t correct the hurts and harms of yesterday, but we can enjoy today’s freedoms.