Tag: student loan

The Simple Way to Make Education More Accessible for Tens of Thousands of Americans

Posted on by robbie

According to the Millennial Disruption Index, 71 percent of all millennials would rather go see their dentist than deal with their bank.
Not surprisingly, that’s “my favorite statistic,” says David Klein, CEO and cofounder of CommonBond, a graduate student loan refinancing company.
CommonBond has come a long way since its beginnings as a pilot program in 2012. At the time, Klein was a graduate student at Wharton Business School in Philadelphia, and like most of his peers, he was dealing with the labyrinthian student loan process to finance his education.
“The rates were unnecessarily high,” says Klein. “The process was unnecessarily complex and to kind of add insult to injury, the level of service that was provided throughout the process was quite poor.”
Klein teamed up with his classmates Michael Taormina and Jessup Shean to launch CommonBond, which saves its average borrower about $10,000 over the course of repayment.
CommonBond also provides a high level of customer service. The company periodically sends customized gifts to its borrowers and hosts borrower dinners in cities across the country where its clients can meet each other and the lending team. Klein says this seemingly novel approach to finance is actually a throwback to the way banking used to happen, when small-town Americans would have personal ties to their bankers. Soon, CommonBond wants to apply this approach to other financial needs, such as mortgages and personal loans.
Perhaps most important, though, is what CommonBond dubs its “social promise.” Partnering with the organization Pencils of Promise, which provides education to underserved students in developing countries, CommonBond funds a year of schooling for a needy child for every degree fully funded through its platform. In 2014, this meant $50,000 went to the nonprofit. In 2015, CommonBond expects to give up to $250,000.
Prudent business practices are important, but customer appreciation dinners, being responsive to borrowers’ needs and supporting education around the world demonstrate what CommonBond stands for. “Business can and should have a positive impact on social change,” says Klein.

The Unlikely Group That Has the Power to Solve the Student Loan Debt Crisis

Posted on by robbie

We’ve talked about the staggering figure before: Americans owe $1.2 trillion in student loans. But one of the most compelling facts about this bubble, a recent government report found, is that this crushing debt doesn’t just affect the young. Senior citizens are also saddled with this financial burden — but they may also be the remedy to this crisis.
According to a Government Accountability Office (GAO) report, the federal student loan debt for Americans 65 and older has continued to rise from $2.8 billion in 2005 to a whopping $18.2 billion in 2013. Due to (frankly unreasonable) interest rates, an increasing population of older Americans can’t make their loan repayments: 4 percent of seniors now have student loan debt compared to only 1 percent six years ago.
About 80 percent of these seniors hold debt from their own education (versus college loans taken out for a child). Take Rosemary Anderson of Watsonville, Calif. The 57-year-old tells the Associated Press that the $64,000 debt she amassed from her undergraduate and graduate studies in her 30s has more than doubled to $126,000. Even though she has worked all her life, she could be in her 80s by the time she pays it all off. Unfortunately, if she doesn’t make the payments, she might default or see her Social Security benefits garnished by creditors. As a result, she might not have enough money to retire when the time comes. 

MORE: Ask the Experts: How Can We Keep From Drowning in College Debt?

Anderson is not alone. “As the baby boomers continue to move into retirement, the number of older Americans with defaulted loans will only continue to increase,” the GAO says. “This creates the potential for an unpleasant surprise for some, as their benefits are offset and they face the possibility of a less secure retirement.”

However, there might be a silver-haired solution. As Education Dive puts it, “seniors vote, and most successful politicians cater to seniors.”
A vast majority of seniors turn out to vote in each election (much higher than any other age group), which means that they also have significant political clout. Many senior citizens are also fiercely protective of the Social Security payments they receive from the federal government. So as more people see their money taken away due to unscrupulous lenders and predatory interest rates, they will demand reform. Politicians know they can’t upset this large voting bloc.
The public has been increasingly angry about mounting student debt, but there has been little government action to solve this enormously expensive problem (Sen. Elizabeth Warren’s bill to refinance student loans died on the senate floor in June). But when a growing sector of these politically powerful Americans are feeling the burden of student loans, they’ll take their sentiments to the polls.
If senior citizens are the ones who will ultimately push lawmakers to take action on student loan reform, let’s get out the vote — even more than usual.
DON’T MISS: When Seniors Have Nowhere Else to Turn, This Nonprofit Protects Them
 

Inspired by the #IceBucketChallenge, Students Are Nominating Celebs to Pay Their Tuition

Posted on by robbie

Never underestimate the power of social awareness campaigns.
That’s the lesson we’ve learned during the past month as celebrities, your Facebook friends and people around the world have been dumping buckets of ice water on their heads to raise funds and awareness for ALS (also known as Lou Gehrig’s disease). Thanks to the #IceBucketChallenge, the ALS Association has raked in more than $100 million and counting.
Piggybacking off the viral sensation, socially savvy college students have decided to use the power of the hastag to draw attention to the cost of higher education.
Called the #PayMyTuitionChallenge, these young men and women are “nominating” the rich and the famous — President Obama, Jay Z, Beyoncé, and Bill Gates to name a few — to pay their college tuition.
MORE: Does Dumping Water on Your Head Actually Work to Raise Awareness?
According to EducationDive, the #PayMyTuitionChallenge hashtag clocked in more than 30,000 tweets in just over 36 hours at a rate of 4,000 student tweets per hour.
And while celebrities have yet to respond to the recent barrage of tweets, the learning management system Blackboard definitely noticed and even launched a scholarship campaign around the challenge.
The company offered one $15,000 award and two $5,000 awards going to the runners-up. To enter, students had fill out a Blackboard website and explain in a video, photo or written response how they will use their education to make the world a better place. The most popular submissions received the scholarships. Blackboard said they received more than 350 entries from all over the world, and last week, the company announced their three winners.
As we’ve previously mentioned, college tuition is only rising and our country’s total student loan debt has soared past a staggering $1 trillion. American grads are saddled with more student loans than ever before, and it’s clear that we have to fix this broken system.
As second place scholarship winner Keeyuania P. from the University of Southern Mississippi said, “Education is one of the best investments a young adult can make. Education has the power to change the world.”
DON’T MISS: Ask the Experts: How Can We Keep From Drowning in College Debt?