Latest news with #JasonDelisle
Yahoo
06-05-2025
- Business
- Yahoo
Private student loans could make a comeback under the GOP's new bill
More Americans will likely need to borrow private student loans to pay for college and graduate school under reforms Republicans are moving forward on Capitol Hill — especially if they want to become doctors or lawyers. GOP lawmakers are aiming to include a major shake-up of the federal student lending program in their party's marquee tax and budget bill, which they are piecing together in the House. Those changes include new lifetime loan limits that would have their biggest impact on students seeking professional degrees, according to an analysis by the Urban Institute, a Washington-based think tank. 'That's where you'll see more private loans and more private borrowing,' said Jason Delisle, an Urban Institute expert who authored the report. Private loans have made up a relatively small share of new student debt ever since the 2008 financial crisis. Back then, the Wall Street crash wiped out a boomlet in subprime education lending by companies like Sallie Mae, which had been fueled by the same sorts of securitization that inflated the mortgage bubble. Read more: What are private student loans? Around the same time, a combination of looser borrowing limits and more generous repayment options began to make federal loans a vastly more appealing option to most students. Today, private loans make up just under 8% of America's $1.6 trillion student debt burden. The GOP's proposal — known as the Student Success and Taxpayer Savings Plan — wouldn't necessarily lead to a massive surge in private loans. But it could force more students to consider them or find ways to borrow significantly less for their degrees. Sign up for the Mind Your Money weekly newsletter Subscribe By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Say goodbye to Grad PLUS One major reason: The Republican measure would put an end to the Grad PLUS loan program, which has allowed students seeking advanced degrees to borrow effectively unlimited amounts since it was created in 2006. Students would instead be allowed to take out up to $100,000 for graduate programs and $150,000 for professional programs like law and medicine. Learn more: How to pay off your student loans quickly Only about 13% of students who earned a master's degree in the 2019-2020 school year borrowed over the proposed $100,000 limit, according to Delisle's analysis. For professional students, though, it was a different story: Almost 39% of law students borrowed above the proposed $150,000 cap. The same was true for 75% of medical students and 62% of dentistry, pharmacy, and veterinary students. (Tuition averages about $59,000 annually at medical schools and $43,000 at law schools, according to the Education Data Initiative.)
NBC News
01-05-2025
- Business
- NBC News
Here's what your monthly student loan bill could be under a new Republican plan
House Republicans have a plan to drastically change how millions of Americans repay their student debt. Under the GOP's new proposal, known as the Student Success and Taxpayer Savings Plan, there would be just two repayment options for those with federal student loans. Currently, borrowers have about 12 ways to repay their student debt, according to higher education expert Mark Kantrowitz. If the GOP plan is enacted, borrowers would be able to pay back their debt through a plan with fixed payments over 10 to 25 years, or via an income-driven repayment plan, called the ' Repayment Assistance Plan.' Under the RAP plan, monthly bills for borrowers would be set as a share of their income, said Jason Delisle, a nonresident senior fellow at the Urban Institute. The percentage of income borrowers' would have to pay rises with their earnings, starting at 1% and going as high as 10%. House Republicans unveiled their agenda to overhaul the student loan and financial aid system at the end of April, in an effort to tout savings for President Donald Trump's planned tax cuts. Here's what monthly bills for student loan borrowers could be if the proposal becomes law. What's new about the GOP student loan payment plan While the U.S. Department of Education's current income-driven repayment plans typically conclude in loan forgiveness after 20 or 25 years, the new GOP plan wouldn't lead to debt cancellation for 30 years. New borrowers also wouldn't have a share of their income protected anymore, as they do now. a $50 discount on their monthly student loan payment per child. The GOP changes to student loan repayment plans would only apply to loans made after July 1, 2026. Those with existing loans should still have access to most of the current repayment plans.
CNBC
01-05-2025
- Business
- CNBC
Here's what your monthly student loan bill could be under a new Republican plan
House Republicans have a plan to drastically change how millions of Americans repay their student debt. Under the GOP's new proposal, known as the Student Success and Taxpayer Savings Plan, there would be just two repayment options for those with federal student loans. Currently, borrowers have about 12 ways to repay their student debt, according to higher education expert Mark Kantrowitz. If the GOP plan is enacted, borrowers would be able to pay back their debt through a plan with fixed payments over 10 to 25 years, or via an income-driven repayment plan, called the "Repayment Assistance Plan." Under the RAP plan, monthly bills for borrowers would be set as a share of their income, said Jason Delisle, a nonresident senior fellow at the Urban Institute. The percentage of income borrowers' would have to pay rises with their earnings, starting at 1% and going as high as 10%. House Republicans unveiled their agenda to overhaul the student loan and financial aid system at the end of April, in an effort to tout savings for President Donald Trump's planned tax cuts. Here's what monthly bills for student loan borrowers could be if the proposal becomes law. While the U.S. Department of Education's current income-driven repayment plans typically conclude in loan forgiveness after 20 or 25 years, the new GOP plan wouldn't lead to debt cancellation for 30 years. New borrowers also wouldn't have a share of their income protected anymore, as they do now. But the plan waives interest on certain payments, and parents receive a $50 discount on their monthly student loan payment per child. More from Personal Finance:Is college still worth it? It is for most, but not allHow to maximize your college financial aid offerWhat student loan forgiveness opportunities remain under Trump The GOP changes to student loan repayment plans would only apply to loans made after July 1, 2026. Those with existing loans should still have access to most of the current repayment plans.
Axios
23-04-2025
- Business
- Axios
What to know about involuntary collections, student loan payments
The Department of Education announced this week that it will start referring student loan borrowers in default to debt collection. Why it matters: After a five-year penalty pause, the 5.3 million borrowers in default could see their wages garnished if they don't resume payments. Here's what to know: When will collections resume? State of play: The department will begin involuntary collections on May 5 through the Treasury Offset Program, which collects delinquent debts that people owe to government agencies, through wage garnishment. Wage garnishment is a legal procedure in which employers are ordered to withhold a person's earnings for the payment of a debt, such as unpaid child support. There will be a 30-day notice, after which the department will begin garnishing wages for borrowers in default. Student loans are considered default after 270 days without payments. Why was there a pause? Federal student loans, including those in default, have not been referred for collection since March 2020, when leniency was initiated during the COVID pandemic. How many people owe money? By the numbers: Only 38% of borrowers are up to date on their student loans, according to the department. 4 million borrowers are in "late stage delinquency," officials said, or 91 to 180 days delinquent. There could be nearly 10 million borrowers in default in a few months, according to the department, meaning almost a quarter of borrowers will be delinquent. How can people make payments? Borrowers in default will receive an email in the next two weeks about the policy update, the department said. Borrowers can contact the government Default Resolution Group to make a monthly payment. What are the next steps for borrowers? Borrowers can sign up for an income-driven repayment (IDR) plan or loan rehabilitation. Income-driven repayment plans, like Saving on a Valuable Education (SAVE) launched under the Biden administration, are calculated based on a borrower's income and family size, rather than loan balances. A federal court prevented the implementation of SAVE and other IDR plans in February, leading to the temporary removal of applications from the Education Department website. As of March 26, 2025, however, the online IDR application is once again available. After the injunction, there was brief confusion over whether changes to the program meant that married borrowers on an IDR plan could be required to make higher loan payments, but the department later clarified that they would not. Yes, but: Some experts are worried that SAVE is on the chopping block. Jason Delisle, a nonpartisan higher education researcher with the Urban Institute, told NPR last month that congressional Republicans want to kill SAVE as part of their budget reconciliation bill, Beth Akers, a higher education researcher at the conservative-leaning American Enterprise Institute (AEI), told NPR that Republicans could use the savings to help pay for President Trump's tax cuts, but if the courts ended it first, Republicans' legislative savings would evaporate. What else is the Education Department doing for borrowers? The department said that there are several tools for borrowers, such as extended loan servicer call center hours and an AI assistant to help find a repayment program.
