Streams

State Lending

Thursday, June 11, 2009

Michael Dannenberg, Senior Fellow at New America Foundation and founder of higheredwatch blog, talks about trouble in the not-for-profit state student loan agencies and how it may affect your loans.

Guests:

Michael Dannenberg

Comments [10]

Michael Dannenberg from New York, NY

Kerri,

I'm glad to hear you had little difficulty rolling over your FFEL loan with Sallie Mae into the Department of Education's Direct Loan program. That's a change.

Historically, student loan providers have been remiss to help borrowers shift to Direct Lending, and the Department of Education didn't make it easy either. Why? The lenders didn't want to lose customers. And the Department of Education's political leadership during the Bush Administration was comprised of former student loan provider executives and others ideologically opposed to Direct Lending, so they weren't particularly aggressive about growing the Direct Loan program.

I don't know when you converted. Regardless. I suspect the process will be much smoother during President Obama's administration given that he's committed to growing the Direct Loan program.

Borrowers interested in the rock solid, federal Public Service Loan Forgiveness program and Income Based Repayment program beginning July 1st should go to www.ibrinfo.org and the ed.gov for more information. I recommend starting at ibrinfo.org.

-Michael Dannenberg

Jun. 11 2009 02:02 PM
Rich from Staten Island

Another physician commenting on the debt burden. With all due respect, I don't know any physician who has a low standard of living. From the PBS special "Sick Around America" the healthcare consultant commented on that ever doctor he had ever met said he's underpaid.

Jun. 11 2009 12:33 PM
Jason Gallea from New York City

To Keri Tyler.

Please discribe how you where able to roll your Sallie Mae loan into a federal loan program. Please let me know what website you did this through, also any additional step's taken.

Thanks

Jun. 11 2009 12:15 PM
keri tyler from brooklyln

I have to disagree with the guest--I just rolled my Sallie mae loans over the federal loan program and it took about 10 minutes online. It was not in any way cumbersome, as he described. I recommend going this route as who knows what private lending corporations are going to be like in 2, 5, 10 years down the road. I have $60,000 in combined undergrad/grad debt and a public service job so I am looking forward to the 10 year pay off. UCLA encouraged me to take my loans via sallie mae and boy am I sorry I did!

Jun. 11 2009 11:31 AM
kai from NJ-NYC

Let's face it: Whether it's student loans or home mortgages or credit car debt, lending and borrowing or selling that debt, is what much of the U.S. economy has been based for the past 30 years or so (forgive me for sounding like John Cusack in Say Anything). This debt economy and its financial innovations has brought our economy to its needs.

What is so appalling is that Americans say they value education, yet we force our future leaders to be saddled with debt after graduation even if they can afford to attend institutions of higher education in the first place.

Jun. 11 2009 11:28 AM
Carl from Long Valley

what about loans for graduate education? Ar ehtere the same opportunities? or are you stuck with the private route? I have 2 children with large laons for grad work & may have 2 more .

Jun. 11 2009 11:25 AM
Kitty from Weehawken

It is so important for everyone out there to know the problems with these private loans. I had to take out so many private loans when I went to law school. My servicer is so corrupt I had to start several investigations with Attorney General Offices. The servicer quickly complied with my request after these investigations but I am sure they are defrauded other borrowers.

Jun. 11 2009 11:20 AM
Jason Gallea from New York City

My wife is now working for Board of Education for the City of New York. She took the job for the loan forgiveness and started working this school year; she now has been told that she is not getting loan forgiveness due to financial crisis. Is this true, can she still get loan forgiveness?

Jun. 11 2009 11:20 AM
Amy from Manhattan

What I don't get is, if the lender is breaking a signed agreement, how is this legal under contract law? Do the loan agreements have a clause in the small print allowing them to renege, something like the credit card agreements that say the company can change the interest rate without notice?

Jun. 11 2009 11:18 AM
Norman from Manhattan

An article in the current Science magazine (324:1147) says,

"Thirty years ago, state and local governments put in $3.99 for every dollar that students and parents paid for higher education; today, states put in $1.76 for every dollar, less than half what they contributed a generation ago."

Is this right? In a generation, we've moved the burden of paying for education from the state governments (and progressive taxes), to the students themselves.

We also sell low-income students on the idea that they should go into debt to get an education as the solution for economic development and class mobility.

Is this right? In many European countries, the higher education system is free.

This is *not* the big picture. You're ignoring the basic problems with the system.

Jun. 11 2009 11:07 AM

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