Sep 29, 2006
EdFed News Wire

America's Top Student Loan Consolidator
Friday, September 29 , 2006
Are Student Loans Good Debt?
A troubling trend is doing away with the conventional wisdom that student loans are good debt. It's a common belief that, like a home loan, student loan debt will turn into an asset. But it doesn't always turn out that way. Increasingly, people are finding themselves unable to pay off or falling behind on their loans.

The U.S. Department of Education recently reported that the national default rate on federal student loans rose slightly, to 5.1 percent in 2004 (the most recent year for which data is available), from the previous year's record low of 4.5 percent.

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Ivy League Increases Aid For Low-Income Students

By Judith Earley

It is no secret that increases in tuition and fees at U.S. colleges and universities have far out-paced inflation. The American Association of State Colleges and Universities (AASCU) recently published a report which stated that 'the average borrower who graduates from a public college owes $17,250'. This is up from $8,000 a decade ago. Additionally, the report continued, in the year 2004, 88.5 percent of Pell Grant recipients took out student loans with an average amount of $20,735; private loans have also increased seven-fold in that time period.

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Commission submits final report

After conducting a year-long research study, the Commission on the Future of Higher Education presented their final report with its recommendations to Secretary of Education Margaret Spellings. Spellings said she will review the commission's findings and continue the national dialogue after determining appropriate actions based on the recommendations.
After whistle, Oberg blows trumpet

Jon Oberg, a former researcher for the U.S. Department of Education, has blown the trumpet after having blown the whistle in the past. At a conference entitled "Student Loan Scandals: A Whistleblower and Maverick Report" held in Washington, DC, Oberg went public regarding the loophole that allegedly allowed student loan companies to earn millions of dollars at the expense of taxpayers. Crafty financiers clubbed new loans with old ones, aiming to continue receiving a government-guaranteed subsidy of 9.5 percent. The Higher Education Act (HEA) guaranteed lenders a 9.5-percent interest rate return on student loans financed by tax-exempt bonds issued before October 2003.

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