I couldn't help but think about struggling student loan borrowers (see posts here and here and here for details) when I saw this story in the NY Times today "Treasury Pushes Mortgage Firms For Loan Relief."
Here is the lead in the story:
So, what hope is there for struggling student loan borrowers? In July of this year, with much fanfare, the Department of Education introduced the Income-Based Repayment option which would base a borrower's monthly payment on their student loan on their income. Yet the program is off to a remarkably slow start with 4,500 approvals as of October due to some technical glitches mentioned here. Note that the Project on Student Debt believes that as many as one million borrowers may be eligible for this repayment option.
So, if the government wants to hold mortgage firms feet to the fire for not modifying enough mortgages, how about holding the Dept. of Education accountable for not enrolling struggling borrowers into the Income-Based Repayment program. Let's start with some transparency and have the Dept. post the number of students selecting the IBR option. And while we are at it, how about posting the number of struggling borrowers that FFEL lenders are signing up for this program too.
So, as a start, how about a web page updated weekly that lists the number of borrowers enrolling in for the Income-Based repayment option by lenders in the Direct Lending and FFEL programs. And how about investing in social media, PSAs and email campaigns to increase awareness of this option. Is a benefit program that no one is signing up for really a benefit program? The time for action is now!
Tim, you can't be this naive! PSAs and email campaigns cost money. In case you haven't noticed, our governments have none! The whole Direct-Loan farce is predicated on no new spending--all "savings"! Even Saturday Night Live knows we can't continue to borrow from our friends the Chinese forever--they're just not that stupid Tim!
Here's a radical idea...what recent grads. really need to pay their bills are JOBS! (Not unlike defaulted mortgage holders in that regard too.) It's simple really. Perhaps a better use of public funds would be to actually stimulate our economy with a real jobs package? (As opposed to billions of special-interest pork otherwise known as "stimulus 2"!)
In hindsight, I guess it's me that's naive though. Sorry Tim! Voters not on the government teat make poor partisans! I eagerly await my rebuke from Craigie and Belinda--pour it on dynamic duo! Tell me I'm wrong!
Posted by: Bizzaro Watchdog | November 30, 2009 at 11:00 PM
Bizzaro, you're not "wrong". This new PROPOSAL strangles ACCESS by providing significantly more to a small population of individuals and make higher education more expensive and more difficult for the majority. Tuition is too high and there's far too little education for families to make important financial decisions. Student loans, if used correctly, are a great way of investing in ones future.
What if they took all the money (REAL MONEY) in the Community Proposal (SAME $87B as the Administrations proposal!) and offered to help public schools control costs and made public education reasonable for everyone. Don't you think that the high cost private institutions would have to reduce price to compete? Real competition! Don't increase Pell, REDUCE the overall cost and Pell is proportionally stronger as is...
The average family is priced out of higher education already!
Posted by: WPaul | December 01, 2009 at 09:54 AM
I thought IBR was only available to Direct Loan borrowers?
Posted by: Financial Aid | December 01, 2009 at 09:58 AM
Glad you posted this piece. I think there is a terrific need for transparency. I posted about your remarks on my blog today, too.
http://alleducationmatters.blogspot.com/2009/12/yes-its-high-time-student-loan.html
Posted by: C. Cryn Johannsen | December 01, 2009 at 06:05 PM