Student loans – Informare Wissen Und Koennen

Student Loans: What Rising Interest Rates Mean for Your Debt HELP

Judith J. George — Wed, 18 May 2022 06:59:53 +0000

HELP-HECS debt is rising to reflect rising interest rates, but what does this mean for you?

Another consequence of rising interest rates is increased HECS-HELP debt. While this may send you into a panic, it may not be the worry you think it is.

HECS-HELP debt will be indexed by 3.9% on June 1 this year. These interest-free loans are indexed each year – which adjusts with interest rates – but won’t be the same number you hear about on the news.

“It’s the average of the quarters of the last two years”, retired financial adviser, host of the my millennial money podcast and author of Sort your money and investGlen James told news.com.au.

“They don’t just say, ‘Oh, the inflation rate in March 2022 is 5.1%, so in June HECS-HELP will be pegged at 5.1%. They’ve smoothed it over the last two years, so it’s not unfair if there’s a spike in inflation for just one quarter.”

Either way, 3.9% sounds like a big jump – and it is. In fact, it’s the biggest increase we’ve seen in over a decade. However, James says overall there is still no cause for alarm.

“There’s no reason to panic if you have HECS/HELP debt,” he said. “You have to remember that if you look at the last 10 years of indexation – including the indexation amount of 3.9% this year – the average annual indexation rate is still only 1.97% .

James also explained that while the index may rise, the amount you must legally repay from your paycheck won’t necessarily change much, if at all.

“The house didn’t catch fire, but it’s always a good time to assess our financial goals each year,” he said.

Should you pay off additional HECS-HELP debt?

While many seem to be panicking and suggesting people with these loans prioritize paying off more before June 1, James disagrees.

“Do you have to pay extra on your HELP debt given the rate increase?” he said. “The answer is probably no, because you probably have other financial goals.

“You can if you want,” he continued, “but you have to do the math and make a balanced judgment with other financial goals in your life.”

Despite the increase in the index, HECS-HELP remains a debt that dies with you, meaning that your family or estate will not have to repay it if you die. Because of this, James still thinks it can often be better to place him lower on your list of financial priorities.

“I think if you have extra money in your life, you might be better off investing it in a superannuation, or in your own stock fund, or paying off your mortgage,” he said. he suggested.

“At least if you have a family and you died prematurely or unexpectedly, that extra refund wasn’t wasted.”

That said, James recognizes a caveat to this general rule – and it comes in when you’re considering buying a home.

“You might consider clearing your HECS-HELP debt if you’re looking to get a mortgage,” he said.

“Banks and lenders don’t care how much HECS/HELP debt you have – whether it’s $200,000 or $5,000 – but they do consider the percentage repayment rate your employer withholds each year to repay the debt,” he continued.

“So you could wipe it out as part of a strategy to increase your service to get a mortgage.”

Overall, however, James suggests keeping in mind “there is never much harm in paying off a debt”.

That doesn’t mean there aren’t problems

While in general the rise in the index shouldn’t cause you to panic, it is part of a wider trend that is troubling, particularly for young Australians.

Earlier this month, National Union of Students President Georgie Beatty spoke after the first two days of a strike at the University of Sydney, stressing that rising tuition fees in general are a another burden for young people when the cost of living is higher than ever. .

“It’s not just that our fees are based on a much higher rate of inflation than our salaries,” Beatty said. “It’s that Scott Morrison’s ‘Graduate Ready’ tuition has also driven unprecedented fee increases, with arts degrees rising 113%.

“Students are wondering how we’re going to afford these extra fees when we’re dealing with rising costs of living, precarious work and haven’t seen significant wage growth for most of our life.”

Reviews | Biden shouldn’t have the legal power to forgive student loans

Judith J. George — Wed, 04 May 2022 12:03:19 +0000

Staying consistent when it comes to constitutional law is not easy, as dramatically illustrated by the leak of a Supreme Court draft opinion that would destroy 49 years of abortion rights doctrine.

Another example: President Biden could soon order a wholesale remission of student debt, despite his earlier doubts — and those of other leading Democrats — about his legal authority to do so.

This potential executive overreach is even more troubling than the actual impact of a policy that, on average, would favor the wealthiest Americans at the expense of everyone else, overstimulate an already inflationary economy, and do nothing to improve the future affordability of universities.

“No money shall be taken from the Treasury, but accordingly from the appropriations created by law”, says the Constitution. If this provision were designed to prevent anything, it would be a taxpayer-funded write-off of $321 billion in government obligations, based on little more than presidential statements. (That’s roughly the cost of a $10,000 rebate plan per debtor similar to what Biden would have considered, according to the Federal Reserve Bank of New York.)

This Constitutional 180, if it happened, would take place not after 49 years but just 441 days since February 16, 2021, when Biden said, “I don’t think I have the authority to do it by signing with a pen, and 279 days since the July 28 press conference in which House Speaker Nancy Pelosi (D-California) said, “People think the President of the United States has the power to cancel the debt – he doesn’t. He can postpone. He can delay. But he doesn’t have that power – it has to be an act of Congress.

(Pelosi spokeswoman Joy Lee acknowledged the White House is reviewing its policy and told me the speaker is “generally supportive of the administration’s efforts.”)

The current, often extended pause in loan repayments was authorized in two pandemic-fighting laws – the Cares Act of March 2020 and the Heroes Act of December 2020. It expires on August 31. There has been no new legislation and the midterm elections are fast approaching. Therefore, Biden is under pressure to act unilaterally.

Proponents of forgiveness of executive loans deny that it would be a usurpation. They argue that Congress possesses delegated the necessary powers. A federal law – the Higher Education Act of 1965 – empowers the Secretary of Education to “compromise” or make “modifications” to federal government debts – words, they argue, that include the power to eliminate debt.

Who knew? Certainly not Pelosi, since last July. As Harvard Law School’s Howell Jackson explained in a recent law journal article, “proponents … must defend the proposition that Congress in 1965 actually authorized the spending of what could exceed $1 trillion dollars of public resources. … To say the least, this assignment of authority was not explicit and is far from clear. The “traditional view,” Jackson wrote, is that the law authorizes selective lending adjustments to borrowers based on “some sort of individualized determination”.

If all of this sounds familiar, it may be because so many recent presidents have embarked on a similar status stretch. In November 2014, President Barack Obama announced that he would interpret existing law to grant deportation assistance and work permits to hundreds of thousands of undocumented immigrants – after repeatedly waiving his power to do such a thing. “I’m not an emperor,” he said at one point.

President Donald Trump circumvented immigration law to ban immigrants primarily from several Muslim-majority countries in early 2017. Biden’s proposed mandate for the workplace vaccine was based on a questionable immigration law endorsement. safety and health at work.

All of the above has culminated in litigation — with varying results, including the recent defeat of Biden’s vaccine mandate in the Supreme Court. What’s different — and, for Biden, potentially attractive — about executive-ordered mass loan relief is that opponents might not even enter court. As Jack V. Hoover argues in the Virginia Law Review, mass debt cancellation does not harm the excluded except in the diffuse sense of having to pay taxes; no plaintiff would have the concrete “precise harm” required to sue.

“The main takeaway from the last 250 years of recorded American history is that presidents are not kings,” Supreme Court Justice Designate Ketanji Brown Jackson wrote in a 2019 opinion. The context was selfish resistance of Trump at the request of Congress for the potentially damaging testimony of his White House attorney, Donald McGahn.

Strictly speaking, however, Jackson’s words would apply equally to an attempt to grant executive beneficence – such as loan forgiveness.

Pelosi herself is aware of the potential downside: “Let’s say…your child at this point decides he doesn’t want to go to college but you’re paying taxes to forgive someone’s obligations. ‘other,” she said at that July 2021 press conference. “You might not be happy about that.”

Excluded from the courts, their representatives in Congress having been dismissed, the discontented would have only one outlet: the ballot box.

Navient student loans have moved to Aidvantage. But when are payments due?

Judith J. George — Fri, 11 Mar 2022 23:57:06 +0000

BrianAJackson/Getty Images

Federal student loan repayments have remained suspended for nearly two years since the pandemic began. Meanwhile, Naivent, formerly one of the largest student loan servicing companies in the United States, shifted its workload of 5.6 million student loans to Maximus, a global administrator of government programs. Maximus is a federal student loan servicer and services former Navient student loans under the name Aidvantage.

If you have federal student loans, they remain suspended until May 1, 2022 — meaning there are no mandatory payments, accrued interest, or loan collections until then. The Biden administration is also considering another expansion of the federal student loan break.

That said, if you haven’t logged into your federal student loan account recently, you might have questions, especially if your loan officer has changed. Here’s everything you need to know about removing Navient and how to log into your Aidvantage account.

Why did Navient exit the student loan business?

Navient has long been under fire from the Consumer Financial Protection Bureau, which sued the loan manager in 2017, saying the company pushed borrowers into expensive and risky private loans that they would be unable to repay. In January, Navient canceled $1.7 billion in private student loans for nearly 66,000 borrowers after coming under scrutiny for engaging in abusive and deceptive practices, including targeting students whose company knew they could not repay their loans.

In 2020, the U.S. Department of Education announced loan servicing changes in an effort to modernize the federal student loan system. As part of the Next Gen initiative, the Department of Education expanded its partnership with five of the current 10 loan servicers, who would continue to service federal student loans, but under stricter government regulations. Navient, along with FedLoan and Granite State, have elected to end their participation in the federal student loan service at the end of 2021.

Michael Lux, student loan expert, attorney and founder of The Student Loan Sherpa, said “increased federal regulation and government scrutiny of federal loan servicing is almost certainly to blame for Navient’s departure.” .

What does Navient’s departure mean for borrowers?

If your loans were managed by Navient, here’s what you need to know:

1. Aidvantage is your new loan manager

By now you should have been notified of this change by post or email from Navient, Aidvantage and the Department of Education. If you did not receive a notification, you should log into your existing Navient account and double-check your contact information to make sure it is correct. Even if your address was outdated, you should be able to log in to your new account.

2. You can login to your Aidvantage account with your Navient credentials

If you try to log into Navient, you will find a balance of $0 – this balance simply indicates that your loans have been purchased by Aidvantage. To log in to your new account, go to www.aidvantage.com and enter your Navient login information.

The process is almost identical to that of Navient. Once you have entered your username and password, you will be prompted to enter your social security number or account number and date of birth to confirm your identity. From there, you will be taken to the Aidvantage account homepage, which looks like the Navient homepage, down to the left navigation options.

If you don’t remember your login information, select “Forgot User ID” or “Forgot Password” and confirm a personal challenge question to receive a new one by email. If you still cannot enter or you no longer have access to the registered email, contact Aidvantage for assistance at 800-722-1300.

3. Your repayment preferences must be the same

Any payment terms you have set up with Navient (auto-pay, deferral, income-based repayment plans) should have been seamlessly transferred to Aidvantage. Of course, since federal student loan payments have been suspended for more than 20 months, you may need to revisit the payment details, especially as you approach the end of the forbearance. And, if your work situation has changed since you last looked at your loan repayment options, you can apply for income-contingent repayment or other repayment options through Aidvantage now, so you’re good to go. when repayment begins in May 2022.

So, after logging into Aidvantage, you should find that your preferred payment method and automatic payment selection have been transferred, along with payment history and a record of fully repaid loans.

4. Prepare for repayment in 2022

Currently, federal student loan repayment is on pause until May 2022. However, this the refund freeze could be extended.

If you haven’t repaid your loans during the forbearance period, be sure to review your payment options now so you’re ready to go in May. Check your payment method, make sure you know your minimum monthly payment, and explore repayment options if you need further assistance. If you would like to explore other deferral or forbearance options, you can do so through your online account under “Refund Options”. You can also speak directly to Aidvantage at 800-722-1300.

FAQs

Does Navient become Aidvantage?

No. In late 2021, Navient shifted its $5.6 billion student loan workload to Maximus, another federal student loan contractor. Maximus operates its student loan service as Aidvantage.

Will I receive tax documents from Navient or Aidvantage?

If Aidvantage is your new student loan provider, you will be able to download the 1098-E tax form, which shows the amount of interest you paid on your student loan, by going to the left panel and selecting “Tax Statements”.

Your old tax slips should have been imported from Navient to Aidvantage. For example, I was able to view my 2020 and 2021 tax documents through Aidvantage. Logging into Navient only allowed me to access my 2020 tax documents.

Should I prepare for repayment now or wait to see if loan forgiveness is accepted?

If you are trying to follow student loan cancellation policies, here is a brief summary. This week, the Department of Education identified 100,000 borrowers with a combined total of $6.2 billion in student loan debt who are eligible for debt cancellation, due to changes to the program. cancellation of civil service loans last October.

That said, only a small number of student loan holders are currently eligible for loan forgiveness. Although the refund break may be extended, it is a good idea to make a plan to prepare for the refund now, just in case. You can explore income-based repayment plans and other repayment options through your Aidvantage account.

College Ave Student Loans Review 2021 – Forbes Advisor

Judith J. George — Thu, 16 Dec 2021 12:38:50 +0000

We rated 12 lenders with the most loans by volume out of 15 data points across interest rate, fee, loan terms, hardship options, application process, and eligibility categories. We’ve chosen the top nine to display based on those earning three or more stars.

Here is the weight assigned to each category:

Difficulty options: 30%
Application process: 16%
Loan conditions : 14%
Interest rate: 13%
Eligibility: 14%
Costs: 13%

Specific characteristics considered in each category included the number of months of abstention available, economic hardship reimbursement options available beyond traditional abstention, perks such as cash back on graduation , discounts, time to default, disclosure of credit rating and income requirements, and other factors.

Lenders who offered interest rates below 10% had the highest scores, as did those who offered more than the standard 12-month forbearance, who made their loans available to non-U.S. Citizens, who offered interest rate discounts beyond the 0.25% standard for automatic payments. , which offered multiple loan terms of up to 15 years and charged minimal fees.

In some cases, lenders were awarded partial points, and a maximum of 3% of the final score was left to editorial discretion depending on the quality of the user-friendly features offered.

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