Borrowers – A Pair Of http://apairof.com/ Tue, 22 Nov 2022 06:26:18 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://apairof.com/wp-content/uploads/2021/10/icon-33-120x120.png Borrowers – A Pair Of http://apairof.com/ 32 32 How Rising Personal Loan Interest Rates Will Affect Borrowers https://apairof.com/how-rising-personal-loan-interest-rates-will-affect-borrowers/ Mon, 21 Nov 2022 23:08:04 +0000 https://apairof.com/how-rising-personal-loan-interest-rates-will-affect-borrowers/ Personal loan interest rates are on the rise, reaching their highest since before the coronavirus pandemic. While existing borrowers with fixed rate loans will not be affected, those with variable interest rates may have already seen their rates increase. In addition, new loans will be more expensive than they were earlier in the year. Key […]]]>

Personal loan interest rates are on the rise, reaching their highest since before the coronavirus pandemic. While existing borrowers with fixed rate loans will not be affected, those with variable interest rates may have already seen their rates increase. In addition, new loans will be more expensive than they were earlier in the year.

Key points to remember

  • The cost of borrowing through a personal loan has increased throughout 2022, reaching pre-pandemic levels.
  • Some existing personal loans could be affected, but for the most part, new borrowers will bear the brunt of rising costs.
  • Borrowers should carefully consider the cost of borrowing and shop around before applying for a loan.

Why Personal Loan Interest Rates Are Rising

The average interest rate on a two-year personal loan reached 10.16% for the third quarter of 2022, according to the Federal Reserve. That’s up from the pandemic-era low of 8.73% in the previous quarter. It is also the first time that the average rate has exceeded 10% since 2019 when it reached 10.32%.

The main reason for the interest rate hike is the Federal Reserve’s decision to raise its federal funds rate in six consecutive committee meetings throughout 2022 in an effort to combat high inflation rates. for 40 years. Although this rate does not directly influence personal loan rates, it does impact the prime rate, a benchmark that lenders use to determine their own interest rates.

But personal loan rates have not risen at the same pace as the federal funds rate, in part because of strong consumer demand, fueling competition among lenders to keep rates low. Nonetheless, borrowers can expect the cost of borrowing to continue to rise as long as the Federal Reserve continues its rate hike policy.

How will borrowers be affected?

Most personal loans have fixed interest rates that do not fluctuate over the term of the loan. For borrowers who have fixed rate personal loans, there will be no impact on their cost of borrowing.

However, borrowers with variable rate loans, which are less common, may see their interest rate – and therefore their monthly payment – ​​increase. Borrowers should review their loan agreement or contact their lender to find out how often their rate will change and if there are any caps on rate increases.

The brunt of the impact of rising rates, however, will be new borrowers. Whether you’re borrowing money to consolidate debt, make home improvements, or cover other major expenses, you can expect to pay more.

Should I apply for a personal loan?

If you’re considering applying for a personal loan, carefully consider your reasons for borrowing and whether you can comfortably afford the monthly payment.

If you plan to use the loan to improve your financial situation through debt consolidation or to cover emergency expenses, for example, it may still be worthwhile despite higher rates. But if you’re considering a loan to pay for a vacation or something else that isn’t urgent, it may be best to wait for lower rates.

If you’ve decided that a personal loan is right for you, take the time to shop around and compare several lenders, looking at interest rates, origination fees, repayment terms and other factors. If your quote is high, consider improving your credit or applying with a co-signer or co-applicant for potentially more favorable terms.

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Biden seeks student loan forgiveness from Supreme Court. Borrowers just want to know how much they will owe in January https://apairof.com/biden-seeks-student-loan-forgiveness-from-supreme-court-borrowers-just-want-to-know-how-much-they-will-owe-in-january/ Fri, 18 Nov 2022 18:26:02 +0000 https://apairof.com/biden-seeks-student-loan-forgiveness-from-supreme-court-borrowers-just-want-to-know-how-much-they-will-owe-in-january/ Justice Department asks U.S. Supreme Court to reinstate President Joe Biden’s federal student loan forgiveness plan after two judges blocked it, saying it could take weeks or years months before a final decision is made on whether to go ahead with the widespread cancellation. And while that’s good news for borrowers who qualify for relief, […]]]>

Justice Department asks U.S. Supreme Court to reinstate President Joe Biden’s federal student loan forgiveness plan after two judges blocked it, saying it could take weeks or years months before a final decision is made on whether to go ahead with the widespread cancellation. And while that’s good news for borrowers who qualify for relief, most just want to know for sure what will happen to their payments in January.

That’s when the nearly three-year pause on federal loan repayments and interest accumulation is expected to end. But with confusion surrounding the future of the debt relief program, some borrowers say it doesn’t make sense to restart payments while a $10,000 to $20,000 discount is still on the table.

This amount of relief could dramatically change borrowers’ payments from month to month, or even eliminate them altogether.

“More than anything, I wish I could get a good answer one way or another so I could start making a plan,” says Patrick Stifter, a 27-year-old optometrist with $179,000 in federal student loans. “Optimism is rare right now. Just to be pragmatic, I’m preparing for the worst.”

Like the millions of other borrowers who are eligible for debt relief under Biden administration rules, Stifter and his wife began making financial plans based on the fact that he was receiving $10,000 from relief. Now, after a federal judge in Texas and an appeals court in Missouri blocked the program, they await answers about what their future holds.

Many are calling on Biden to at least extend the payment break until the lawsuits are settled. Other borrowers are unsure whether to cancel claims for payments made during the pandemic or hang in there.

Stifter says it’s unfortunate the program has become so politicized and may not be helping the people it was intended for.

“Most people…just want a fix, and as soon as possible,” the Colorado resident says. “They don’t want to know on December 25 that they have to start repaying their loans on January 1.”

Also frustrating, Stifter says, is that there is no central clearinghouse to go to to find out the status of forgiveness efforts.

“I just google student loans every few days and see where we are,” he says.

The Justice Department filed a brief with the Supreme Court to overturn the appeals court’s injunction. The Supreme Court has already refused to block the relief plan on several occasions, but these decisions were related to different cases.

“The plan appears to face an uphill battle given the degree of conservatism in many courts across the country, particularly the Supreme Court,” said Jacob Channel, senior economist at LendingTree. Fortune.

The Biden administration stopped accepting relief requests last week after a Texas judge blocked the program for the first time. It says more than 26 million people applied for help and more than 16 million were approved before the program was shut down.

“We strongly believe that the Biden-Harris student debt relief plan is legal and necessary to give borrowers and working families respite as they recover from the pandemic and to ensure they succeed when the Reimbursement restarts,” Education Secretary Miguel Cardona said in a statement.

“Amid efforts to block our debt relief program, we are not backing down.”

For now, all Stifter can do is wait. He considered refinancing his loans with a private lender, but if the Biden administration extended the payment pause and the 0% interest rate, he would prefer to have it for a few more months. Every day seems to cost him money.

“Interest rate changes of 1% to 2% have a huge impact on my life,” he says. “Whatever the answer, it would be nice to have an end date.”

This story was originally featured on Fortune.com

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Why Non-QM Borrowers Won’t Leave Anytime Soon https://apairof.com/why-non-qm-borrowers-wont-leave-anytime-soon/ Tue, 15 Nov 2022 16:39:53 +0000 https://apairof.com/why-non-qm-borrowers-wont-leave-anytime-soon/ While originations are down due to a volatile mortgage market, the population of underserved borrowers who need non-QM products is on the rise. There will always be a population of borrowers who cannot qualify for a home loan by traditional guidelines. This large pool of clients includes self-employed people, real estate investors and people facing […]]]>

While originations are down due to a volatile mortgage market, the population of underserved borrowers who need non-QM products is on the rise.

There will always be a population of borrowers who cannot qualify for a home loan by traditional guidelines. This large pool of clients includes self-employed people, real estate investors and people facing credit events.

Prospecting these types of borrowers can help protect your business during market changes. Originators who are actively working in the non-QM space are closing additional loans every month.

A glance profiles of non-QM borrowers

Self employed: According to Upwork, there are approximately 59 million freelancers in the United States and growing.

This includes 1099 and gig economy workers. That’s a lot of potential borrowers. The challenge these borrowers usually face is not being able to use their tax returns due to large tax deductions. They can afford the house and often have good to excellent credit. But their tax returns do not reflect their true financial situation. They need an alternative solution to verify their exact income and ultimately their ability to repay. The solution: bank statement loans.

Angel Oak’s bank statement loan is ideal for the self-employed.

  • Loans up to $3 million
  • 12 or 24 months of authorized personal or business bank statements
  • 1099 tax returns accepted
  • Two-year seasoning required in case of bankruptcy, foreclosure, short sale or deed in lieu

Real estate investors: The volume of investment properties exceeded the purchase of primary residences throughout 2022.

Any originator who has offered a DSCR Investor Cash Flow loan to their investor clients is very happy about it! We concluded several transactions at the same time for the same real estate investor. Many originators have called us to close a cash refinance and purchase for a borrower. They call us because we allow what Fannie and Freddie do not. We help investors buying their 22nd property and those needing title in an LLC.

Marketing to real estate investors is lucrative regardless of the market. Seasoned investors will find ways to continue building their portfolios. They know where to find deals and how to make the market work in their favor. They also know which initiators to trust to get them to the closing table quickly.

Angel Oak’s DSCR Investor Cash Flow Loan is ideal for closing real estate investors.

  • Loans up to $1.5 million
  • No personal income or tax return required
  • Qualifies on property cash flow
  • No limit on the total number of properties
  • Investors can title in an LLC

Credit Challenges: Borrowers who have recovered from foreclosure or bankruptcy don’t have to wait seven years to get a mortgage. Acquire successful creditworthy borrowers with one of our non-QM loan products.

Angel Oak’s Full Doc Portfolio Select is ideal for closing borrowers with credit issues:

  • Loan is up to $2 million
  • One-year seasoning for foreclosure, short sale or deed in lieu
  • Two-year seasoning for bankruptcy
  • Owner occupant, second homes and investment properties

Angel Oak Mortgage Solutions works with its clients to help protect their businesses. Click here to find out how you can start increasing your volume today.

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Younger borrowers are likely to use payday loans and are unaware of “more affordable” credit unions https://apairof.com/younger-borrowers-are-likely-to-use-payday-loans-and-are-unaware-of-more-affordable-credit-unions/ Thu, 10 Nov 2022 07:00:49 +0000 https://apairof.com/younger-borrowers-are-likely-to-use-payday-loans-and-are-unaware-of-more-affordable-credit-unions/ According to a study by the government-backed Money and Pensions Service, young people are twice as likely to turn to high-interest payday lenders than not-for-profit community lenders. Friends and family were the main source of loans for the 25-34 age group, with 26% saying they would turn to ‘close contacts’. Meanwhile, 19% said they would […]]]>

According to a study by the government-backed Money and Pensions Service, young people are twice as likely to turn to high-interest payday lenders than not-for-profit community lenders.

Friends and family were the main source of loans for the 25-34 age group, with 26% saying they would turn to ‘close contacts’.

Meanwhile, 19% said they would consider payday lenders or other high-cost short-term credit if needed.

Only 5% of respondents said they would consider borrowing from nonprofit lenders such as credit unions.

There are 7.7 million financially vulnerable adults in the UK and almost half are aged between 25 and 34

Additionally, the non-profit financial organization Fair4All estimates that there are 7.7 million people aged 18-34 who are financially vulnerable, accounting for nearly half of the 17.6 million estimated adults living in these conditions.

Lauren Peel of Fair4All Finance told This Money: “We’re seeing people who already feel like they’ve cut back and are still overdrawn every month.”

“But they have goals and are ambitious about where they want to live and what careers they want to have.

“A lot of them are tenants and it’s not always a stable market. People worry year after year about the increase in their rent.

What are credit unions and community lenders?

Credit unions are financial cooperatives that provide savings, loans and a range of other services to their members. To join, credit unions generally require members to be part of a common bond, such as living in a designated area or working for a particular employer.

However, you may not always need to be a current union member to use its services.

These organizations are often able to lend money to customers on more favorable terms than other street lenders and have programs in place to help more vulnerable borrowers who may have difficulty accessing credit elsewhere.

Victoria Barry, 36, got tricked by payday lenders in her early 20s, but with the help of a credit union she was able to pay off her debts and is now a homeowner.

Victoria Barry, 36, got tricked by payday lenders in her early 20s, but with the help of a credit union she was able to pay off her debts and is now a homeowner.

Victoria Barry was caught in a vicious cycle of using high-cost payday loans in her early twenties.

Speaking to This is Money, Victoria, now 36, from Manchester, said she initially borrowed just £20 from a payday lender after a friend recommended they fund a night out at the end of the month. However, caught up in the high interest charges, Victoria continued to supplement her salary with loans at the end of the month.

She reached the point where she was paying off almost all of her salary to payday lenders on a monthly basis and then had to get another loan to live on. The tipping point came, she says, when her borrowing exceeded her income.

“The next payment was going to be money I didn’t have in my account,” she recalls. “I only had a salary of £10,500 and the month before I had borrowed £700. With the £150 in interest, I had no way of giving them that money.

At the time, Victoria was working for Co-op Insurance and noticed advertisements for the Co-op Credit Union, which is open to members of various co-operative organizations, on her workplace intranet.

“It was quite shameful, my family is not in debt, so I felt like I had let people down and didn’t want to turn to them. I saw it [credit union adverts] on the intranet and thought I’d give it a try.

It was pretty shameful, my family is not in debt, so I felt like I let people down and didn’t want to turn to them

She says she was worried union staff would blame her for mishandling her money, but when she met an adviser in person he was reassuring and helpful.

They provided him with not only an affordable repayment plan, but also financial health tools, such as budgeting skills, to be able to manage his money.

“Nobody tells you how you budget and it’s very simple, that’s where the money comes in and that’s what you can spend,” says Victoria who now has her own home in Mossley, Greater Manchester .

“It was about someone listening to you and not judging you, which was the most important thing for me at the time.

“Looking back on that time it felt like there was no hope so I’m happy to share my story because if a person like me hears there’s someone out there who can help you who is not a loan shark or pay day lender so it’s worth it.

What else can you do if you need credit?

The first thing Peel suggests is to check if you are entitled to benefits that you are not already claiming.

There are online tools to determine if you can access other sources of income. It is estimated that around £15 billion in benefits go unclaimed each year.

When there’s a need for credit, don’t be ashamed, she says. Just be sure to do your research and approach financing providers who can help you find a lower cost option.

High-cost payday lenders are often at the top of search engine results, so take the time to look a little deeper to determine what’s available and affordable.

Victoria Barry echoes the message that you shouldn’t be ashamed if you’re in financial trouble and seek help.

She suggests talking to a credit union, but even if they can’t help you, they can direct you to other sources of help.

“Asking for help is the first step,” she says.

According to a study by Bluestone Mortgages, one in six adults (16%) say they are too embarrassed to ask for help when they are in financial difficulty.

However, a bigger barrier to getting advice is that almost a third (31%) don’t think they have a right to help, while more than a fifth (22%) say they don’t know where to start looking for help. .

To raise awareness, credit unions and other community lenders are encouraging young people in their 20s and 30s to review their credit choices and consider the options available to them through a range of local and national community lenders that may suit their financial circumstances.

They can be found at Find Your Credit Union – credit unions near you and Finding Finance – responsible finance providers offering simple, smaller affordable loans.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.

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When could student borrowers find out if they are actually getting relief? https://apairof.com/when-could-student-borrowers-find-out-if-they-are-actually-getting-relief/ Sun, 06 Nov 2022 12:30:00 +0000 https://apairof.com/when-could-student-borrowers-find-out-if-they-are-actually-getting-relief/ Millions of student borrowers find themselves on hot coals, waiting to see if they will actually get the relief offered by President Biden as challenges to his debt cancellation plan wind their way through the courts. The Biden administration opened applications for student loan forgiveness last month and planned to begin applying the relief this […]]]>

Millions of student borrowers find themselves on hot coals, waiting to see if they will actually get the relief offered by President Biden as challenges to his debt cancellation plan wind their way through the courts.

The Biden administration opened applications for student loan forgiveness last month and planned to begin applying the relief this month, but those actions stalled after the U.S. Court of Appeals for the 8th circuit has temporarily blocked the measurement.

Of the multiple court cases across the country, a six-state GOP-led challenge is the only one that has succeeded so far in stopping the program, at least for now.

The administration plans to forgive up to $10,000 in federal student loans for borrowers earning less than $125,000 a year and up to $20,000 for Pell Grant recipients. But the 8th Circuit issued an order two weeks ago to stop the relief distribution while it considers arguments over whether states have standing to pursue the plan.

A federal district judge previously ruled that the six Republican attorneys general who sued lacked standing because they could not show that Biden’s agenda directly harmed their states.

The 8th Circuit ended up suspending the relief program to give both sides time to submit their briefings before making a full decision on whether the pardon should be put on hold until the entire matter is settled. .

Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, told The Hill that borrowers “will have a decision” from the 8th Circuit soon after these briefings are submitted.

Legal experts said the court’s decision on whether the states have standing could be key to determining whether the administration will be allowed to grant aid in the coming weeks or months, if at all.

Michael Sant’Ambrogio, law professor and senior associate dean for faculty and academic affairs at Michigan State University, said a decision on the states’ motion for a preliminary injunction is expected soon, but litigation is “rarely quick” if the full case goes to trial.

“If they grant the preliminary injunction, I would say all bets are off,” he said.

Biden said in an interview with Nexstar’s Reshad Hudson last week that he expected the aid to flow within two weeks, but experts said that’s only possible if the injunction is Refused.

Sant’Ambrogio said the Supreme Court has increasingly curtailed the power of the executive branch to act without clear direction from Congress, and that the states’ challenge could succeed based on the argument that Congress is not never expressly endorsed a broad pardon.

“This is a very bold move on the part of the administration, and there are certainly questions given how the Supreme Court interpreted the power of the executive branch and federal agencies,” Sant’Ambrogio said.

While Shafroth acknowledges that court cases can take a long time, she doesn’t expect student debt relief challenges to last too long or courts to halt the program while they decide.

She said it was “unusual for courts to order a party to do or not do something before a case has been decided”.

“Normally a judge would find that the government is breaking the law before ordering them to stop,” Shafroth said.

The six states that sued — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — pointed in their lawsuit to Congress’ multiple failed attempts to cancel the debt in recent years. as evidence of a lack of congressional authorization for the administration’s action.

If the appeals court rules that the states have standing and grants the preliminary injunction, their factums on the merits of the case will not be due until mid-December. The government would then have 30 days to respond, and the states would have an additional 21 days to respond to that rebuttal, which would almost certainly result in the case being opened next year.

A COVID-19 pandemic-era pause on borrowers making payments on their loans is set to end Dec. 31, but the Biden administration may seek to extend it again. The administration had urged borrowers to apply for relief by mid-November to ensure they receive it in time for the break to end.

“I find it hard to imagine that all of this will be over in less than at least a month. It could be two or three months before the injunction is finally lifted,” said Thomas Bennett, associate professor of law at the University of Missouri. “And of course, if the appellate courts agreed with the states that they have standing, it could be a lot longer.”

He said each side could appeal a potential 8th Circuit ruling to the Supreme Court on an expedited basis, adding that the High Court may be more likely to take it if the feds lose at the appellate level. .

He said the Supreme Court may also be more likely to take up cases challenging the program if multiple appeals courts issue different rulings on the program’s constitutionality.

Shafroth pointed out that the Supreme Court had previously declined to get involved in a case involving the debt relief program, Brown County Taxpayers Association v. Biden, and she didn’t expect them to get involved in Garrison v. Department of Education – a prediction that proved correct on Friday when Judge Amy Coney Barrett denied an emergency effort to block the pardon program in the Garrison case.

“It remains to be seen whether any of the other cases will make it all the way to the Supreme Court,” Shafroth said.

Bennett, in response to Biden’s prediction, said, “There is unlikely to be any real loan forgiveness in the next two weeks.”

“But in the next four weeks, in the next six weeks, I think it becomes more and more plausible if they are able to win,” he added, referring to the administration.

Although Shafroth said it was difficult to pinpoint exactly when this might be resolved by the courts, she said she did not expect a long delay in decisions.

“The parties are very clearly, on both sides, interested in resolving these cases quickly, so they agree to fast briefing times. The courts also recognize the great importance of these cases and resolve them quickly,” she said.

“I think hopefully it will all be resolved fairly quickly,” Shafroth said.

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Short-term relief on the horizon for federal student loan borrowers as tuition costs continue to rise over the years https://apairof.com/short-term-relief-on-the-horizon-for-federal-student-loan-borrowers-as-tuition-costs-continue-to-rise-over-the-years/ Fri, 04 Nov 2022 13:30:00 +0000 https://apairof.com/short-term-relief-on-the-horizon-for-federal-student-loan-borrowers-as-tuition-costs-continue-to-rise-over-the-years/ As the cost of higher education continues to rise, with more students relying on federal loans to pay for their degrees, short-term relief may be on the way for former students struggling to get out of debt, while questions remain regarding a long-term solution. Adjusted for inflation, the average annual cost of attending a four-year, […]]]>

As the cost of higher education continues to rise, with more students relying on federal loans to pay for their degrees, short-term relief may be on the way for former students struggling to get out of debt, while questions remain regarding a long-term solution.

Adjusted for inflation, the average annual cost of attending a four-year, full-time college—including tuition, fees, room, and board—in the United States rose from $10,231 in 1980 to $28,775 in the 2019-20 school year, a roughly 180% increase, according to the National Center for Education Statistics.

“We’ve been telling everybody for decades, ‘You have to go to college.’ So the demand has gone wild, and many colleges aren’t functionally much bigger than they used to be, so every seat is more expensive,” said Dietrich Vollrath, professor and chair of the Department of Economics at the University of Houston.

Data from the Federal Reserve System shows that more than 45 million borrowers nationwide have contributed to approximately $1.75 trillion in accumulated student loan debt, with more than $1.6 trillion of these loans issued by the federal government. In Texas, 52% of college graduates in the 2019-2020 school year had student loan debt with an average debt of $26,273, according to the Institute for College Access & Success.

In the five postcodes in and around the Pearland and Friendswood area, data shows that more than 142,700 people aged 18 and over have university or higher experience, about 71.2% of the local population aged 18 and over. 18 and older, according to US Census Bureau data.

Locally, the cost of one-year tuition at Alvin Community College increased by approximately 13% between the 2012-13 and 2022-23 school years, while the average annual cost of tuition at the University of Houston-Clear Lake grew more than 36% in the same time frame, according to college data.

Hoping to provide relief, President Joe Biden announced on August 24 that he would issue an executive order that will allow nearly 43 million Americans to get up to $20,000 in forgiven federal student loans.

While the plan has been welcomed by borrowers, experts said they fear loan forgiveness could lead to further tuition inflation. Betsy Mayotte, president of the Institute of Student Loan Counselors, said while she supports the initiative, she believes it is not addressing the root cause of the problem.

“Everyone is talking about the student loan crisis, and it’s there, but it’s a symptom, not the problem,” Mayotte said. “The problem is the cost of higher education, and this plan does nothing to address that.”

Expensive tuition

Vollrath said inflation plays a role in raising the cost of a college education, but he also noted two additional factors that have led to steadily rising tuition costs.

According to Vollrath, wealthy economies such as the United States tend to experience faster rates of inflation for services such as education and health care compared to manufactured goods, because the cost of producing these goods decreases over time.

Vollrath said the second contributing factor to the tuition hike has been a decrease in financial support from state governments. Between 2008 and 2018, state spending on higher education in Texas fell from $9,256 per student to $7,107, a decline of 23.3%, according to the Center on Budget and Policy Priorities.

“We’re getting about half the money we thought we were getting 20 to 30 years ago, and you have to take that into account, so it usually ends up being offloaded to students,” Vollrath said.

During the same period, the average cost of tuition at public four-year colleges in Texas increased by $2,302, or 30.4%, according to CBPP data.

“If you reduce the cost of your public institutions, it would hypothetically force these private universities to reduce [their cost] just to be competitive,” Mayotte said.

However, Vollrath said he doesn’t think the blame should be directed solely at declining state contributions to higher education.

“I think there are definitely things you can talk about on the college side,” he said, speaking generally of public colleges. “Why are universities paying for things that seem to drive up tuition and don’t seem to contribute to the foundation of a student’s education?” »

Basics of the diet

As noted in an Aug. 24 White House press release, Biden’s three-part plan will provide up to $20,000 in debt forgiveness to Pell Grant recipients with loans held by the U.S. Department of Education. and up to $10,000 in debt forgiveness to non-Pell Grant recipients.

The Biden administration began accepting requests for loan relief on Oct. 17. However, the program was temporarily blocked by a federal appeals court on October 21 as it heard a motion from six states to permanently halt the program. Although this decision prevents debt cancellation, the White House encourages people to continue submitting applications.

Individuals will be eligible for this relief if their income is less than $125,000 or $250,000 for married couples. Current students with loans will also be eligible for debt relief; however, borrowers who are dependents will qualify based on their parents’ income.

Additionally, the White House announced that the pause on federal student loan payments would be extended one last time through December 31 and that borrowers should expect to resume payments in January. According to the release, an application for borrowers to apply for relief will be available before the pause on federal student loan repayments ends.

The Department of Education has estimated that about 43 million borrowers will be eligible for relief, including 27 million borrowers eligible to receive up to $20,000 in debt forgiveness.

“People who must [$10,000] or less or [$20,000] or less tend to be the ones who struggle the most,” Mayotte said. “The reason their balance is so low to start with is because of one of two things: either they’ve been paying forever, or…they have debt and no degree.”

The Department of Education is also proposing a new income-based repayment program under the plan, under which monthly payments for undergraduate loans will be capped at 5% of the borrower’s discretionary income, or approximately half the rate most borrowers are paying today.

The plan also aims to improve the Civil Service Loan Forgiveness Program by proposing a rule that borrowers who have served in the military; worked in a non-profit organization; or worked in the federal, state, tribal, or local government receive appropriate credit for loan forgiveness.

local point of view

Across Alvin Community College, the cost per credit hour this fall is $47 for district students and $143 for nonresident students. Those rates have been the same since at least the 2020-21 school year, which was the last time the college raised rates, ACC Vice President of Administrative Services Karl Stager said.

According to college data, ACC is less expensive than UHCL, where the preliminary cost per credit hour is $251 for 2022-23, the same as last year.

About 8% of ACC students take loans, and that’s an average of $5,550. At UHCL, 28% of students borrow, which is an average of $9,632, according to data from the two colleges.

Still, UHCL prides itself on its cost, officials said.

“UHCL is one of the most affordable four-year universities in Texas,” said Kara Hadley-Shakya, UHCL’s acting vice president for strategic enrollment management. “Our goal is to keep education affordable.”

Mark Denney, UHCL vice president for administration and finance, agreed.

“UHCL offers a focused route to completing your full bachelor’s degree in four years at a relatively low cost, where many community college students can transfer and still have to spend more than two additional years at UHCL, making the total cost much closer if not more than attending UHCL from the start,” Denney said.

ACC officials said the college has focused on cutting costs by ensuring students only take the courses they need to graduate to avoid indebtedness. These proactive methods are better long-term solutions than reactive debt relief, they said.

“For us at community colleges, I think our prices are so low that we don’t put students in a lot of debt,” Stager said.

Hadley-Shakya said the students appreciate the loan forgiveness.

“Anything that eases the burden of student debt is significant,” she said. “Student loan relief may not solve all the financial problems facing students today, but it could certainly be part of the solution. »

Saab Sahi contributed to this report.

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Maine could reconsider foreclosure rule that protects borrowers https://apairof.com/maine-could-reconsider-foreclosure-rule-that-protects-borrowers/ Tue, 01 Nov 2022 21:42:00 +0000 https://apairof.com/maine-could-reconsider-foreclosure-rule-that-protects-borrowers/ Experts say the possibility that Maine could remove consumer protections from continuing foreclosure litigation after a borrower wins could give servicers broad options similar to those in other jurisdictions. The catalyst for potential change is JP Morgan v. Moultain, a case in which the court system had previously found a lack of evidence related to […]]]>

Experts say the possibility that Maine could remove consumer protections from continuing foreclosure litigation after a borrower wins could give servicers broad options similar to those in other jurisdictions.

The catalyst for potential change is JP Morgan v. Moultain, a case in which the court system had previously found a lack of evidence related to the mortgage company’s ownership of the loan and the amount owed, according to the Portland Press Herald. The latest escalation in this lawsuit calls for the reconsideration of both a precedent limiting further litigation and a related case that defined it, The Maine Monitor reported.

Both local news outlets noted that Thomas Cox, a high profile consumer advocate who drew attention to the widespread irregularities in the foreclosure process following the Great Recession, opposes changing the precedent, saying it could hurt borrowers as they come under increasing financial pressure from inflation and the higher rates.

Other jurists agree that a change would be a setback for consumers.

“Unfortunately for landlords, most states don’t have such protections,” said Troy Doucet, director and attorney at Doucet Gerling, who called Maine’s precedent “very unusual and very beneficial for landlords.”

A decision in favor of dismissing the precedent would bring Maine’s laws into line with the status quo, as one exists in a patchwork of state foreclosure laws. Some jurisdictions like Florida allow considerable leeway in subsequent actions while others, like Kentucky, set clear limits on when they can occur, Jason Vanslette, real estate partner at Kelley Kronenberg Law, said in a statement. E-mail.

“It wouldn’t be unusual for the Supreme Court of Maine to adopt a more ‘bank-friendly’ interpretation,” Vanslette said.

Given that to date foreclosure activity has remained low, home equity levels are high, and there have been operational improvements in record keeping and compliance, borrowers with newer mortgages may not be as risky today as older loans. of a modification of this rule. But experts warn that the limits of technological advances in service still leave borrowers at some risk of their loan not being processed properly.

“I imagine there are lingering issues around old business books, and while electronic vaulting and digital are where the market is going, [the servicing process] is remarkably paper-heavy to date – with delayed adoption. So I imagine there’s still a challenge there,” Faith Schwartz, president of industry consultancy Housing Finance Strategies, said in an email.

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Meghalaya signs MoU with Credit Guarantee Fund for MSME Borrowers https://apairof.com/meghalaya-signs-mou-with-credit-guarantee-fund-for-msme-borrowers/ Sat, 29 Oct 2022 01:49:00 +0000 https://apairof.com/meghalaya-signs-mou-with-credit-guarantee-fund-for-msme-borrowers/ The government of Meghalaya on Friday signed a Memorandum of Understanding with the Credit Guarantee Fund for Micro and Small Enterprises (CGFTMSE) to facilitate the flow of credit to MSME borrowers. The MoU between the State Department of Finance and CGTMSE under the Ministry of MSMEs has been signed to implement the Meghalaya Credit […]]]>

The government of Meghalaya on Friday signed a Memorandum of Understanding with the Credit Guarantee Fund for Micro and Small Enterprises (CGFTMSE) to facilitate the flow of credit to MSME borrowers.

The MoU between the State Department of Finance and CGTMSE under the Ministry of MSMEs has been signed to implement the Meghalaya Credit Guarantee Scheme, according to a statement released by the department.

This MoU will strengthen the credit delivery system and facilitate the flow of credit to the MSE sector, he added.

Chief Minister of Meghalaya, Conrad Sangma, who was present during the signing of the MoU, emphasized that such interventions by the state government are part of the overall objective of encouraging and promoting the entrepreneurship in the state.

Currently, loans taken by MSME borrowers are covered by the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) against a risk cover of 75% of the loan amount under various MSME schemes.

However, banks still perceive their 25% risk share as high. This is one of the disincentives for banks to extend credit to MSME borrowers.

To overcome this major challenge, the launch of the MCGS increases the coverage guarantee to a maximum of 95% and will minimize risk and encourage collateral-free lending by member lending institutions, the statement said.

Through this mechanism, the state government builds on the existing CGTMSE program of the Government of India. With a contribution of Rs 5 crore, a wallet of Rs 250 crore would be created.

Considering the average loan size of Rs 1 lakh, more than 25,000 units would be supported through this state government intervention. Moreover, considering 3 employees per unit, 75,000 employment opportunities would be generated in the MSE sector in the state.

The MCGS will start tentatively from November 1 this year and will continue until the portfolio reaches a level commensurate with the contribution of the state government.

The total commitment of the corpus to the proposed MCGS will be increased considering the initial performance of the scheme with the corpus of Rs 5 crore.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Student loans are holding back middle-class borrowers, study finds https://apairof.com/student-loans-are-holding-back-middle-class-borrowers-study-finds/ Wed, 26 Oct 2022 19:27:43 +0000 https://apairof.com/student-loans-are-holding-back-middle-class-borrowers-study-finds/ Student loans have failed to deliver on their promise of a middle-class life for millions of Americans, and America’s system of financing higher education through individual borrowing is deepening inequality in the country, according to a new report. study. According to the report by the Jain Family Institute, a nonpartisan research organization, the salary premium […]]]>

Student loans have failed to deliver on their promise of a middle-class life for millions of Americans, and America’s system of financing higher education through individual borrowing is deepening inequality in the country, according to a new report. study.

According to the report by the Jain Family Institute, a nonpartisan research organization, the salary premium that comes with attending college has not been enough to allow student borrowers from disadvantaged backgrounds to build wealth. He cites the large number of debtors who have not even been able to meet interest payments, meaning they now owe more than when they originally borrowed the money.

An analysis of the cohort that took out loans in 2009 found that less than half had repaid them a decade later. In black and Latino neighborhoods, about 75% and 60% of borrowers respectively had balances above the original loan amount, compared to 50% in white neighborhoods.

“If the university really offered borrowers a stable and reliable wage premium, after a normal 10-year amortization schedule, the percentage of unpaid student debt would approach zero,” writes Laura Beamer, the author of the report. “The inability of borrowers to repay their debts, or have loan revenue forecasts come true, indicates that the university is not profitable in the labor market.”

President Joe Biden’s plan to cancel some student debt has an income threshold, with only people earning less than $125,000 eligible for cancellation. But the Jain report — which pushes back against the idea that debt relief automatically favors wealthier Americans — argues that wealth, rather than income, may be a better guide.

He finds that most student debt is held by Americans in the bottom 25% of the population, even though some of them have reached higher incomes. Wealthier cohorts generally have less of a burden because “these groups do not take on debt to fund their education,” the report says. “Debt financing of education exhibits a regressive distribution across income, race, class, and gender.”

The study also highlights the double burden faced by many Americans who have taken out loans to pay for their children’s education even as they still struggle to repay theirs. About a third of black and Latino borrowers under the Parent PLUS program are in this situation, he says.

“Debt, rather than wealth, is now the cross-generational term in people’s minds,” Beamer said in an email. “Parent PLUS borrowers in financial difficulty should receive more substantial relief.”

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Which student loans are eligible for forgiveness? Here’s what Illinois borrowers need to know https://apairof.com/which-student-loans-are-eligible-for-forgiveness-heres-what-illinois-borrowers-need-to-know/ Mon, 24 Oct 2022 10:00:00 +0000 https://apairof.com/which-student-loans-are-eligible-for-forgiveness-heres-what-illinois-borrowers-need-to-know/ President Biden’s student loan forgiveness application officially went live Oct. 17, and the federal cancellation plan could wipe out debt for 31% of Illinois borrowers, provided they meet income limits . The plan forgives up to $10,000 in federal student loans to borrowers who have not received Pell grants and up to $20,000 in forgiveness […]]]>

President Biden’s student loan forgiveness application officially went live Oct. 17, and the federal cancellation plan could wipe out debt for 31% of Illinois borrowers, provided they meet income limits .

The plan forgives up to $10,000 in federal student loans to borrowers who have not received Pell grants and up to $20,000 in forgiveness to those who have received at least one Pell grant during their college career.

Borrowers are eligible if their adjusted gross income in 2020 or 2021 was less than $125,000 as an individual or $250,000 as a married couple.

According to Lynne Baker, spokeswoman for the Illinois Student Aid Commission, more than 70% of direct federal borrowers could have more than 25% of their debt forgiven, as long as they meet federal income criteria.

About 31% of federal student borrowers in Illinois owe $10,000 or less, and about 42% of federal borrowers in the state have between $10,000 and $40,000 in debt, according to data from the U.S. Department of Education. Education.

What types of student loans are eligible for forgiveness?

A variety of federal student loans disbursed before June 30, 2022 are eligible for forgiveness, Baker said, including the following:

  • Direct loans (unsubsidized and subsidized)

  • Direct Consolidation Loans (all underlying loans must be Ministry of Education held loans and must be disbursed by June 30, 2022)

  • FFELP loans held by National Education or in default with a guarantee organization

  • Perkins loans held by the Department of Education

  • PLUS loans for parents and graduates

  • Delinquent loans (includes subsidized Stafford loans held by the Department of Education or commercially serviced, unsubsidized Stafford loans, parent PLUS, graduate PLUS and Perkins loans held by the Department of Education)

Additionally, consolidation loans that include all FFEL and Perkins loans not held by the Department of Education are also eligible if the borrower applied for consolidation before September 29, 2022, Baker continued.

Loans not eligible for relief include FFELP loans held by businesses (which are not in default), private loans (including any federal loan that has been consolidated into a private consolidation loan), and any loan disbursed to effective July 1, 2022, according to Baker.

Avoid forgiveness scams

Although the official application for student loan forgiveness under President Biden’s plan is brief and asks for your Social Security number, it’s important to make sure you’re completing the correct application to avoid any fraudulent programs.

The Federal Office of Student Aid offers these tips for avoiding scams:

  1. Be aware of common scams. These can include terms such as “act immediately”, “registrations are first come, first served”, and “Your student loan is flagged for discount pending verification.” Call now!”

  2. don’t pay for help with loan relief. The FSA office says “Getting help from an unaffiliated private debt relief company does not necessarily mean you will be scammed”, but the federal government’s unique forgiveness application is free from to fill.

  3. Confirm that you are working with a Partner of the United States Department of Education. The FSA office offers an online list of official partners.

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