February 7, 2020
By Ryan Lane, NerdWallet
Multiple studies have shown that student debt can cause borrowers to delay getting married. For some borrowers, though, marriage could actually be a gateway to paying less.
You can save money by refinancing student loans, but not everyone qualifies. If your better half has a better financial profile, you can share the benefits of refinancing in two ways:
— REFINANCE TOGETHER. You combine your student loans with your partner’s into one spousal loan with a lower interest rate.
— CO-SIGN FOR YOU. Your spouse co-signs a loan refinancing your debt, getting you a lower rate on the back of his or her finances.
If you’re considering getting hitched to your partner’s loans, here’s how to decide if you should.
REFINANCING ‘FOR BETTER’
Refinancing makes the most sense to save money on higher-interest private and graduate school loans.
For example, by refinancing a $60,000 loan from 7% interest to 5%, you’d save roughly $7,200 over a 10-year term.
Typically, you’ll need robust finances and a good credit score to qualify and get the best rate.
Spouses may “increase (their) chances at getting a better rate together,” says Andrew Zoeller, digital program director for Purefy, which refinances loans for Pentagon Federal Credit Union, or PenFed.
For joint spousal loans and loans that spouses co-sign, PenFed evaluates the couple based on their combined income and counts shared debts, like mortgages, only once. This allows more individuals — such as stay-at-home parents with good credit — to meet PenFed’s lending criteria.
Other lenders may evaluate spouses separately. Ask a lender about its policy before applying.
In 2019, 67% of co-signed PenFed student loan refinances were spousal loans, according to Zoeller.
“It’s something our program is known for,” he says.
REFINANCING ‘FOR WORSE’
If you co-sign a refinancing loan or combine debts with your spouse, you’re equally responsible for repaying the balance — even after a divorce.
“There is no exit ramp,” says Joshua R.I. Cohen, a lawyer in West Dover, Vermont, who operates TheStudentLoanLawyer.com.
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January 30, 2020
By Elizabeth Hernandez, The Denver Post
A bill in the works for Colorado’s upcoming legislative session would mandate the state pay for the first two years of student loans for new graduates of the state’s public colleges who commit to stay in Colorado and enroll in an income-based repayment program.
Students who qualify would have their monthly payment — determined by an income-based repayment program — paid in full by the state for their first two years out of college, relieving them of the financial responsibility as they get introduced to the workforce.
Senate Majority Leader Steve Fenberg, a Boulder Democrat, Rep. Leslie Herod, a Democrat representing District 9, and Rep. Julie McCluskie, a Democrat representing District 61, plan to sponsor the “Get On Your Feet” bill, modeled after a program established a few years ago in New York.
“Students are graduating with so much debt that it’s, frankly, overwhelming,” Fenberg said. “People are going down a path or a career that isn’t what they even went to college for to start paying these off. They don’t have a chance to take a breath and figure out what they want to do. The concept is to give them two years of breathing room to actually be able to pursue the career they want to pursue.”
More than 761,000 Coloradans are repaying $27.7 billion in student loan debt, according to household debt statistics from the Federal Reserve Bank of New York.
In 2018, 56% of Colorado graduates with a certificate or associate degree left school with debt — the average debt amounting to $13,300. For a bachelor’s degree during the same time frame, 69% of graduates ended their academic career with debt, averaging $25,500, according to statistics from the Colorado Department of Higher Education.
Gov. Jared Polis’ budget earmarked $14 million to advance-fund the program for three years, “serving approximately 5,300 Coloradans who graduate from a state institution of higher education, live in Colorado and participate in a federal income-based repayment plan.”
Charley Olena, an advocacy consultant with the left-leaning organization New Era Colorado, is helping with the “Get On Your Feet” bill this session.
“One of the reasons why this is so exciting for Colorado and the reason why the governor’s office has been so enthusiastic is because students’ loans are depressing entrepreneurship,” Olena said. “The total percentage of people under 30 who own their businesses has fallen about 65% since the 1980s. Millennials were overwhelmingly citing student loan debt as the thing holding them back from starting their own business. As Colorado’s economy continues to grow, entrepreneurship is something we want to be able to foster.”
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My God is so big, so strong and so mighty
There’s nothing my God cannot do
These are the lyrics to one of my daughter’s favorite worship songs. This past holiday season was tough for me. I refused to delight in the Lord and trust that he would give me the desires of my heart as found in Psalm 37:4-5.
We had our first born after our fifth year of marriage and I wouldn’t have it any other way. To be frank, I miss the alone time we had, and our uninterrupted sleep. We are approaching 9 years of marriage; diaper changes and potty visits rule the night. Praise the Lord for our son’s healthy lungs and daughter’s early taking to potty training. I understand this is just the season we are in.
With all these blessings, I was still unhappy. Dear Lord, I am sorry. I complained about the daycare costs, the cost of diapers, and rising medical bills. There are people out there who literally impersonate medical staff to kidnap newborns. Check out a story of such catch provided through the link below.
Blessed, Just Not Always Feeling Like It
I’ve been blessed with two little lives who share my DNA. Now comes the desire to leave property and wealth for my children in the event I pass. My belief is we are all going to die if the Lord doesn’t come get us first. It would be unfortunate to leave my children empty handed; with the parting gifts of funeral and burial expenses. So off to work I go to pay off debt, and to have something to invest after what remains after monthly expenses.
I’m fortunate to have made it this far in my student loan debt repayment. I do wonder what I could’ve done with $85,308.07. The total amount is $106,811.84 when accounting for interest. This is INSANE. Below is an update of my Fedloan and Nelnet accounts.
I hope to have this saga of debt completed by the end of April this year. As a society we must stop buying into the lie that if you grew up poor, then getting an education at all costs will get you out of poverty. My financial situation was made worse after college graduation than after high school graduation. Be wise parents in what decisions you allow your children to make.
Chasing After Something Else
An education will NOT get you out of poverty alone. It takes discipline, sacrifice, and being okay with going without for a period of time-contentment. What got me in this whole student loan mess was wanting what others had (houses, cars, fancy clothes). Not knowing that, “Resentment kills a fool, and envy slays the simple” -Job 5:2.
My true desire is peace in my household. I refuse to sell myself for things others say I must have. I’m only chasing what God has for me. He doesn’t want me to worry, I trust him with my future. On a lighter note, the Lord can take our mistakes and work it out to bring Him glory. But please everyone, let’s be obedient haha. There’s nothing our God cannot do!
Until next time everyone! Stay strong…💪fight on…🥊💥🥊 and have no debt but love! Peace and Blessings.
January 16, 2020
By Zack Friedman, Forbes
Can you now discharge your student loans in bankruptcy?
Here’s what you need to know.
Student Loans: Bankruptcy
A Navy veteran will have $220,000 of his student loans discharged, even though he is not unemployable, not disabled or wasn’t defrauded. A U.S. bankruptcy judge in New York, Cecilia G. Morris, ruled that Kevin J. Rosenberg will not have to repay his student loan debt because it will impose an undue financial hardship.
According the Wall Street Journal, Rosenberg borrowed $116,500 of student loans between 1993 and 2004 to earn a bachelor’s degree from the University of Arizona and a law degree from Cardozo Law School at Yeshiva University. He filed for Chapter 7 bankruptcy in 2018 and asked the court last June to discharge his student loan debt, which had grown to $221,400, including interest. At the time of filing, Rosenberg’s annual salary was $37,600, and after living and debt expenses, his monthly net loss was $1,500.
Traditionally, unlike mortgages or credit card debt, student loans cannot be discharged in bankruptcy. There are exceptions, however, namely if certain conditions regarding financial hardship are met.
The Brunner Test: Financial Hardship
Those conditions are reflected in the Brunner test, which is the legal test in all circuit courts, except the 8th circuit and 1st circuit. The 8th circuit uses a totality of circumstances, which is similar to Brunner, while the 1st circuit has yet to declare a standard.
In plain English, the Brunner standard says:
- the borrower has extenuating circumstances creating a hardship;
- those circumstances are likely to continue for a term of the loan; and
- the borrower has made good faith attempts to repay the loan. (The borrower does not actually have to make payments, but merely attempt to make payments – such as try to find a workable payment plan.)
There are variances across federal districts, but that’s the basic framework. To discharge student loans through bankruptcy, an Adversary Proceeding (a lawsuit within bankruptcy court) must be filed, where a debtor claims that paying the student loan would create an undue hardship for the debtor.
So, Can You Now Discharge Student Loans In Bankruptcy?
This is only one legal ruling. That said, federal judges and Democrat and Republican members of Congress are open to changing the law to make it easier for borrowers to discharge their student loans in bankruptcy. While these tactics may be welcomed by some student loan borrowers, critics may question whether judges should actively try to circumvent the existing law (suggesting that Congress, and not judges, should make the law.
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December 12, 2019
By Scott Olson, NBC News
The University of Phoenix and its parent company have agreed to pay $50 million in cash and cancel $141 million in student debt to settle allegations of deceptive advertisement brought by the Federal Trade Commission.
The deal, announced Tuesday, settles a dispute over an ad campaign the for-profit college launched in 2012 touting partnerships with companies including Microsoft, Twitter and Adobe. It suggested the school worked with those companies to create job opportunities for students, even though there was no such agreement, investigators found.
The Federal Trade Commission said the settlement is the largest the agency has ever obtained against a for-profit college.
“Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist,” said Andrew Smith, director of the Federal Trade Commission’s Bureau of Consumer Protection.
The University of Phoenix said in a statement that much of the dispute focused on a single ad campaign that ran from 2012 to 2014. It said it agreed to the deal “to avoid any further distraction from serving students.”
“The campaign occurred under prior ownership and concluded before the FTC’s inquiry began. We continue to believe the University acted appropriately,” the company said.
Apollo Education Group owns the University of Phoenix. The Arizona-based for-profit college chain has 55 campuses across the nation and teaches thousands of students through its online programs. It’s the nation’s largest recipient of GI Bill tuition benefits for military veterans.
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December 2, 2019
By Aarthi Swaminathan
Student debt isn’t just a student problem. Across the U.S., many parents also struggle with the burden of student loans.
A recent survey by Freedom Debt Relief found that 37% of 1,506 American adults said their children’s college education cost has made them feel financially overwhelmed. And 20% said that the stress has contributed to mental or emotional health issues.
More than 40% said education costs impacted their retirement plan, with 31% indicating that they had “given up retiring when they initially desired.”
Yahoo Finance spoke with one parent in a particularly difficult student loan situation: a 60-year-old factory worker from Scranton, Pa., who had cosigned a loan for his son. (The man, whom we’ll call Frank, asked for anonymity to protect his son.)
‘It’s not nice for a hard-working middle class family’
Frank’s student debt experience began when his son got into a college. As a “middle-class working family” that brings in about $75,000 a year, Frank and his son started borrowing.
The son fell seriously ill after attending the school for one-and-a-half years and dropped out. After his health improved, the son decided to resume his education at a different school. All the while, both father and son continued to borrow.
The expenses began mounting: The family had a refinanced mortgage and credit card debt, as well as home and car insurance to pay. On top of that, they had recurring medical bills. And there was the possibility of more kids going to college.
“[With] some of my bills, I was in no position to barely help myself,” Frank said.
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