It’s Official: Student Loan Debt Is Hurting The Economy

So they frustrate the process for the borrower, leading to an increase in the default rate . Borrowers who try to pay off their loans early, to reduce their total interest paid over the life of the loan, find difficulty in getting the exact amount they would need to send to pay off the loan. In addition, extra payments designed to pay down principal are not applied properly. Servicers apply overpayments inconsistently, sometimes using them to satisfy future monthly installments or to pay off fees and interest first instead of principal. This does not help borrowers reduce their interest burden. The entire process of paying off loans early is fraught with confusion on where the money goes after the borrower turns it in to the servicer.
Source: http://www.salon.com/2013/10/23/paging_elizabeth_warren_student_loan_providers_are_likely_screwing_you_over/

Student loan interest rates could double The bill won support from Senate Republicans. However, left-leaning Democrats and student groups opposed the bill for hiking rates in coming years. “The truth of the matter is the bill on the floor would be a disaster for the young people of our country who are looking to go to college,” said Sen. Bernie Sanders, a Vermont Independent who opposed the bill. “This makes a bad situation worse.” Under the deal, high school students, like Dakota Friend, 16, could be paying more for student loans when she attends college.
Source: http://money.cnn.com/2013/07/24/news/economy/senate-student-loans/index.html

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Source: http://www.examiner.com/article/how-to-pay-off-student-loans-learn-to-sell-unwanted-junk-on-ebay

How Schools Can Help Finally, the schools should also be held financially responsible for losses stemming from costly programs with poor outcomesand not just by curtailing future levels of financial aid. Colleges and universities should be compelled to return a portion of the money theyve already received. Cohort default http://www.obamastudentloanforgiveness.net rates (which encompasses the loans defaulted on by students who are out of school only a year or two) can be used in the calculation of those values. Look, theres more than enough blame to go around for this $1.2 trillion mess. What matters most at this critical point in time is how we get out of itcertainly not by stonewalling requests for payment restructures, drop-kicking borrowers from one servicer to the next, carelessly attending to routine administrative matters and turning a blind eye to intermediaries that skim profits at borrower and taxpayer expense. And, lets not forget about the hard decisions that must also be made to reform higher education (including several suggestions you can read about here )until that happens, for every problem loan thats resolved, you can count on a new one taking its place.
Source: http://finance.yahoo.com/news/student-loan-reality-check-lenders-190043728.html

Others noted that after submitting additional payments, the money was earmarked for future amounts due. Or they complain that extra payments intended to reduce their principal were instead applied for outstanding fees and interest. Paying more than is required is often complicated because borrowers have three or four loans bundled into a single account. The CFPB analyzed more than 3,000 complaints submitted from October of last year through the end of September. Chopra cautioned that the complaints are not based on a representative sample and may not reflect widespread problems. Nonetheless, the borrowers experiences highlight problems similar to what we saw in the mortgage industry.
Source: http://www.roanoke.com/news/business/colorofmoney/2309168-12/problems-paying-off-student-loans-early-theres-help.html

For an entire generation of would-be homeowners, improvements can’t come soon enough. The path to riches Dividend stocks can make you rich. It’s as simple as that. While they don’t garner the notability of high-flying growth stocks, they’re also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine.
Source: http://www.fool.com/investing/general/2013/10/27/its-official-student-loan-debt-is-hurting-the-econ.aspx

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