This Week in Financial Aid | 07.24.12
This week has seen some interesting news in the financial aid community. From a new private loans report to a college shopping sheet unveiling, here are some of the hot topics in financial aid right now:
CFPB’s “Private Student Loans” Report Released
Last week, the Consumer Financial Protection bureau released a 131 page report on the state of private student loans. This is the first time a report like this has been issued and it has produced some interesting findings. Read the full report or check out some highlights of the report below:
- 90% of all student loans in 2011 were cosigned and required school certification
- In 2008, 42% of undergrads at for-profit schools received private loans, compared to 14% of all undergrads – Less than 15% of all outstanding loans are from private student loans
- More than 40% of students don’t exhaust their federal aid before seeking private loans
- The mean interest rate for private loans in 2011 was about 8.5% (down from about 10% in previous years)
- Requiring school certification of private student loans could reduce over-borrowing and lead to better product choices
- Determine whether changes are needed to the treatment of private student loans in bankruptcy proceedings
- Consider modernizing and clarifying the definition of a private stunt loan under the Truth-in-Lending Act
- Provide mechanisms for borrowers to understand a complete picture of their student loans
- Determine whether additional data is needed to enhance consumer decision-making and lender underwriting
New College Shopping Sheet Unveiled
One difficulty for many students in the college hunting process is comparing college expenses. What is considered self-help at one school, may be lumped in with your loans at another. Today, a new college “shopping sheet” was unveiled based on consumer feedback from last fall. This new comparison sheet will allow families to better compare their college options financially. Check out the example shopping sheet.
NASFAA 2012 is Underway
The National Association of Student Financial Aid Administrators conference is happening in Chicago as I write this. Financial aid administrators across the county have come together to discuss the state of financial aid, changes to the programs, and ways to better serve the students they are so dedicated to.
As part of this conference, Secretary of Education Arne Duncan addressed attendees, speaking on the state of federal aid programs. Here’s what he had to say:
Additionally, it wouldn’t be a presidential election year without some bi-partisan talk of education. Justin Draeger, President of NASFAA, recently mediated a discussion with Obama and Romney representatives where the topic of the day was college access and affordability. The video below is a long one (50 minutes) but it touches on some really interesting points. If education is an important issue to you for the upcoming election, you may want to spend a few minutes to hear what the two sides have to say.
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