Blog

Category: Student loans

Financial Factors to Consider When Choosing a College

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Apr 06, 2018
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ISA investing, Student loans

As May 1st approaches, many high school students are making a decision about what college to attend. Deciding factors normally include academics, location, and extracurriculars. However, students must make sure they don’t overlook the important financial considerations when making their college choice. Here are four of the most important financial factors to consider: Scholarships When comparing college costs, students should take into account any scholarships or grants. In addition to...

Do Student Loans Make Home Ownership Impossible?

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Apr 02, 2018
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Student loans

What is the American Dream? For many, it includes graduating college, buying a home, and starting a family. However, a new article from CNBC questions if this is still possible. Below are the three main ways student loans prevent borrowers from buying a home: Many people with student loans have high debt-to-income ratios. Banks are often unwilling to provide mortgages to borrowers with high student loan debt and low incomes because student debt must be paid back before mortgages. When...

Is College Still Worth the Expense?

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Mar 26, 2018
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Student loans, Career development and mentoring

Is college worth the expense for today’s youth? According to economist Rafiq Dossani, it is. Loans allow students to invest in a college education, and they tend to provide a worthwhile return. With a default rate of about 11%, student loans seem to be affordable for a vast majority of students. However, students can feel the negative impacts of loans even if they don’t default on them. For example, financial stress can damage wellbeing and force students to work extra jobs instead of...

Will this be the Decline of Federal Financial Aid?

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Mar 19, 2018
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Student loans

    According to the Wall Street Journal, a bill to break up the government’s near-monopoly in the student loan market has cleared the house and is now seeking a vote from the full house. The bill will increase privatization of education financing, and reducing federal financial aid. This could mean that households with weaker credit scores would have fewer options to take on loans to pay for college. Unlike private student lenders, government programs like Direct and PLUS do...

WSJ - Nearly 5 million in Default on Student Loans

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Dec 14, 2017
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Student loans

Published By: Wall Street Journal Author: Josh Mitchell The number of Americans severely behind on payments on federal student loans reached roughly 4.6 million in the third quarter, a doubling from four years ago, despite a historically long stretch of U.S. job creation and steady economic growth. In the third quarter alone, the count of such defaulted borrowers—defined by the government as those who haven’t made a payment in at least a year—grew by nearly 274,000, according...

TruTV made a clever analogy on Federal Student Loans

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Dec 12, 2017
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Student loans

TruTV’s “Adam Ruins Everything” recently made a video outlining how federal student loans have changed over the years through deregulation. Using a house party as an analogy, Adam (the show’s main character) talks about the original purpose of the Student Loan Marketing Association (SLMA, or Sallie Mae) and how it has changed. The video cleverly characterizes Sallie Mae as a real person which makes for a great analogy. Originally set up as a heavily regulated government institution in...

The Implications of Student Debt

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Nov 08, 2017
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Student loans

Getting a college degree is getting more and more expensive, and students are taking on more debt to finance their education. In addition to that, demand for college degrees has never been higher. According to the National Center for Education Statistics, the employment rate for young adults with some undergraduate degree is 88%, this number drops to 69% for people with just a high school degree. With that being said, it is important to know what the implications of student debt are before...

Will the Student Loan Bubble Burst? Probably Not, and That’s a Bad Thing.

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Aug 01, 2017
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Student loans

  Remember the 2008 subprime crisis and the internet bubble? Both these crises started with prices that did not make sense and eventual crashes that sent ripples throughout the economy. These “crises” were relatively clearly defined (even if not obvious at the time they started) and had a bubble and burst pattern. So attuned are we to such types of crises that we expect to look for the next one in something that looks like the previous one. For example, see this article....

Can parents get hurt by taking out student loans for their child’s education?

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Feb 01, 2017
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Student loans

By Ross Krieger If you are a student whose parent will be taking out money for your college education, or you yourself are taking out loans at a later age, be careful. People over 60 are the most rapidly growing segment of borrowers for student loans, and they are facing problems as their debt repayment often affects their retirement saving. The Boston Globe recently published an article featuring two women in their 60’s who are heavily in debt without a clear way out. One of the two took out...

Get smart about financing college: Comparing aid offers

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Nov 08, 2016
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Student loans

By Heather Pautenaude Heather Pautenaude is an expert on college financial aid with 20 years of experience in this area. She has worked at Simmons College, Boston College, and George Washington University in their financial aid offices. Most recently, she was Director of Financial Aid at Simmons College.     Receiving your financial aid award from a school can be exciting and scary at the same time. You and your family have spent time and energy, and maybe some money, on your...

Research Suggests Student Loans Negatively Impact Long-term Wealth

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Oct 19, 2016
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Student loans

New evidence shows that student loans can damage one’s financial situation in the long run. In many cases, students have to choose between paying back student loans, or saving in higher yielding investments. Such individuals forgo the wealth benefits of investing in assets with the appropriate risk profile. This, in turn, reduces long term net worth. Recent research from Karthik Krishnan (Northeastern University), Birzhan Batkeyev (Northeastern University) and Debarshi Nandy (Brandeis...

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