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A recently released report* on usage of college students’ banking accounts show a wide range of practices and participation by colleges. While most accounts are free, some have fees. The report provides analysis of practices including; 1) number accounts by banking institution 2) fees charged to students 3) compensation paid to colleges.
The report, sent to ED by CFPB last February, was obtained through FOIA requests.
Parent Loan Crisis?
Not surprising the PLUS program is becoming the next federal student loan emergency. FAAs have long cautioned ED to be more prudent with loan eligibility and loan limit criteria. A recent Brookings Institute report reveals predicted parent borrowing. Meanwhile, repayment rates have declined and loan defaults have risen. Unfortunately the borrower rate increases appear to mirror the COA rate increases while undergraduate enrollments have gradually declined. Schools sometimes contribute to high borrowing levels by packaging PLUS loans.
Solutions previously offered to policymakers include a variety of preventive initiatives; increased grant funding to keep pace with inflation, increased scrutiny of parental ‘ability to repay’, more restrictive loan annual and aggregate loan limits and PLUS eligibility for income-based repayment and loan forgiveness.
Lawmakers while passively acting have bi-partisan legislative proposals; the PROSPER Act would cap aggregate parent borrowing and the Aim Higher Act would make parent loans eligible for income-driven repayment.
The full report can be accessed at:
The Institute for College Access and Success (TICAS) recently released their annual report on debt at graduation. The report findings for the average student debt for college graduates continue to climb, although at a somewhat slower rate. Nationally, about two-thirds of college seniors who graduated from public and private nonprofit colleges in 2017 had student loan debt. These borrowers owed an average of $28,650, 1 percent higher than the 2016 average.
The report on debt at graduation found wide variations in debt levels across states as well as colleges. High-debt states remain concentrated in the Northeast and low-debt states are mainly in the West. The report also explores the link between college graduation and successful loan repayment, and which college graduates are more likely to default on their student loans.
Full report can be accessed at; https://apnews.com/eeebf667026a420c9893220215e542cb
Interactive map, by state, can be accessed at; https://ticas.org/posd/map-state-data
Nearly every school has borrowers whose loans are serviced at Navient. The linked article may be of interest regarding ED’s 2017 audit of their loan serving practices and pending litigation against Navient.