The Obama administration has successfully created and passed a new law that will unfairly enforce more regulations on post secondary schools. This new law, called Program Integrity: Gainful Employment (GE) was established when concerns were raised about the amount owed on student loan debt. This single ruling will permanently close several hundred programs and lower the options of educational choices for non-traditional students. The American taxpayer dollar is funding the education of low income students in the form of Federal Pell Grants and Federal Direct Student Loans. The federal government has the responsibility of funding those student loans. The Department of Education (DOE) is responsible for the rules applied to student loans. …show more content…
According to the final ruling on October 31, 2014, the DOE will target post secondary schools with a mandate that the schools must show that their graduate students are gainfully employed with an income that will allow student loan debt repayment (“Program”). Taken as a median income of all graduates, these sole figures will close an institution when federal funding is lost because the metrics set by the Obama administration are not met.
Lobbyists have successfully blocked parts the new regulations in federal court. According to their second suit filed in November 2014 against Secretary of Education Arne Duncan, the Association of Private Sector Colleges and Universities feel that this regulation is unacceptable and in violation of federal law (“APSCU”). The lawsuit also suggests that millions of students will have a limited number of programs to choose from because so many schools will close permanently. The DOE conceded in the first suit that no single test is a perfect solution of determining if a school is passing the GE rule (Program). Originally, there were three metric tests; now there is only one that has two parts. This single test will take the annual wage information from the Social Security Administration and compare those wages against the student’s loan debt. To pass the metric guidelines, the GE rule explains that a student must have a debt to earnings ratio (d/e) less than
An education is one of the most important tools a person can acquire. It gives them the skills and abilities to obtain a job, earn a wage, and then use that wage to better their lives and the lives of their loved ones. However, due to the seemingly exponential increase in the costs of obtaining a college degree, students are either being driven away entirely from earning a degree or taking out student loans which cripple their financial prospects well after graduation. Without question, the increasing national student loan debt is one of the most pressing economic issues the United States is dealing with, as students who are debt ridden are not able to consume and invest in the economy. Therefore, many politicians and students are calling
With the ever-increasing tuition and ever-tighten federal student aid, the number of students relying on student loan to fund a college education hits a historical peak. According to a survey conducted by an independent and nonprofit organization, two-thirds of college seniors graduated with loans in 2010, and each of them carried an average of $25,250 in debt. (Reed et. al., par. 2). My research question will focus on the profound effect of education debt on American college graduates’ lives, and my thesis statement will concentrate on the view that the education policymakers should improve financial aid programs and minimize the risks and adverse consequences of student loan borrowing.
After World War II and the establishment of Higher Education Act of 1965, the primary goal of equalizing educational opportunity to lower and middle income students became a national initiative (Mullhern et al. 2015). These initiative were provided through grants and financial aid. However, in recent years student loans have become an important part of the equation. Since the Great Recession in 2008, many states have not invested in higher education at pre-recession levels, which were already low from the previous recession (Mitchell, Palacious & Leachman). This has
In the U.S. students are encouraged to earn a college degree, but the cost of an education turns many away. “Driven by the allure of a decent salary with a college degree, Americans borrowed to go to school. Outstanding student debt doubled from 2005 to 2010, and by 2012 total student debt in the U.S. economy surpassed $1 trillion” (Mian, Sufi 167). There are plenty of opportunities to obtain funds for college, including one of the most common, student loans. A student loan is defined as “a common way to fund education, specifically college and graduate school, and they provide educational opportunities that you otherwise may not be able to afford” (Barr). Student debt is at an all-time high in America. Over half of all lower income
One argument is that “federal student loans have robust protections in place to help borrowers who are in a tight spot”(Josuweit). Some of these protections are deferment and forbearance or income-driven repayment plans. Forbearance can be used to pause monthly payments temporarily and income-driven repayments can lower monthly payments to match the students income, costs of living, and family size. These protections help out students who do not get a high-paying job right out of college and may have to demonstrate unemployment or another economic hardship to qualify. Equally important, “the Direct Loan program plays a key role in providing millions of Americans with an opportunity to obtain a postsecondary education”(Josuweit).
The federal government in July of 2015 signed a bill authorizing the “gainful employment rule” it was supposed to help alleviate one issue that was happening with for-profit schools, it dealt with people not receiving adequate income to pay their debts after job placement, even with their degree. The rule requires the school to prove the loan to income ratio meets a set standard, “The rule is expected to cause 1,400 programs, 99 percent of them at for-profit colleges, to be put at risk of losing eligibility to receive federal student aid.” (“Gainful-Employment Rule Survives For-Profit Group's Court Challenge.”) This bill was enacted but may now be causing a completely different issue. The University of Phoenix is now going to drop most of its
In the article Wolfram communicates that the federal government is spending tens of billions of dollars in providing federal aid to student that are in college, through many actions like grants, loans and tax programs. But there is still yet to be evidence that suggest that these so called programs or policies have helped to decrease student loan debt and provided an aid to those attending college. Wolfram mentions that the federal government this year has purposed that federal tuition aid on college cost will undergo a phase where federal assistance will slowly die down. Wolfram states that the federal government will try to create a legal structure
If you're counting on government student loans to get you through college or graduate school, count on paying them back. The Education Department has become one of the toughest debt collectors around. Over the past decade, the agency has steadily expanded its arsenal for dealing with former students who don't repay. A 1998 change in federal law made it extremely difficult for people to escape student loans through personal bankruptcy. The Education Department also can now seize parts of borrowers' paychecks, tax refunds and Social Security payments without a court order, a power similar to the IRS's.
An increase in collegiate participation and graduation are national objectives which the government creates. A handful of financial advisors say current congressional policy changes, for example, simpler installment choices for lower-salary students along with loan grace periods for those working government jobs, should accomplish these national objectives and make loans less dangerous for students. For instance, Marcia Clemmitt states:
Over his time as President, Barack Obama has changed the student loan experience tremendously. A new law passed in the same legislation that passed Obamacare allowed the Department of Education to be a direct lender of student loans and eliminated the subsidy program, where the government would hand out subsidies to banks, like Bank of America, who would then grant student loans (Altman, Edwards, & Thompson, 2015). In simpler terms, the government cut out the middle man. While the general public did not see these changes as dramatic, the Department of Education now had the power to make a new rule book for student loans; they had the power to decide how loans are disbursed, repaid, and forgiven, without passing laws through Congress (Altman,
Not just regards locate the best rate and terms, but on the other hand it's imperative to pick a legitimate, reliable, and understood student loan organization.
My understanding is when you sign the document (car loan, home loan, student loan), there could be some mistakes and errors in the documents. Signing means accept the terms and conditions of the loan. Other information on the document such as your street address, social security number, drivers license number, and bank account number all help to identify you as the individual making this transaction.
Every year, the consumption of student loans keeps on increasing. Students are put into helpless positions to afford a college education. Since it’s a necessity for almost all students, the problem of the consumption of student loans may not be fixed as a whole. Borrowing loans will always be a necessity. The government does not provide enough grants and support for postsecondary education, even though they gain benefits
You can view your financial aid history on the National Student Loan Data System (NSLDS) The Department of Education has a central database where you can find details related to your federal student loans and grants including your current balance, disbursements, and loan status.
They screen it based on the colleges that have students that have profited from obtaining their degree. This solution will see the success rate of repayment for those who went to that specific college. If the college failed to provide all opportunities to help you secure a job it will affect their likelihood of being accepted for the loan requirements. For this solution they are basing it off the majority not rare occurrences where they cannot pay. If the majority of students could repay their loans that institution would have students eligible for loans. This will provide more of an incentive for colleges to show the value of their school. They are not selling just education but also a