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WHY THE INCREDIBLE STUDENT LOAN BURDEN MUST CHANGE

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WHY THE INCREDIBLE STUDENT LOAN BURDEN MUST CHANGE

Student loan debt in our country has reached horrifying levels with no end in sight! There are more than 44 million borrowers who collectively owe approximately 1.5 trillion dollars with another 100 billion about to be added to tin the coming months as people graduate. Student debt is the second largest form of consumer debt in the United States, second only to mortgage debt. The average college graduate owes approximately $40,000 in student loans upon graduation.

How did we get into this situation and better yet, how are we going to get out of it? It seems clear that the student loan crisis didn’t happen because of one trend or change and that it’s going to take a multi faceted approach to bring student debt into balance. Let’s look at what some of the contributing factors are:

  • Rising college tuition: Costs for secondary tuition have jumped dramatically and those jumps include tuition at 2-year public colleges, 4-year public colleges, and 4-year private colleges. It costs $930 more per year to attend a 2-year college in 2018 than it did in 2008, $2670 more per year to attend a 4-year public college, and $7,390 more year to attend a private 4-year college (difference given in 2018 dollars). The average rate at which tuition has increased ranges from 1.2 times that of general inflation to 2.1 times the general inflation rate – effectively doubling the cost of tuition every 8 years.
  • Rising number of people attending college: Enrollment in 2-year, 4-year, and post graduate programs has increased more than 50% since 1995. This increase is attributed, in part, to employers requiring college degrees to even be considered for most positions.
  • Government education subsidies not keeping pace: State and federal education subsidies,whether directly to the institution or to students in the form of Pell grants, have increased massively over the years but not in proportion to the rise in the number of students. This translates to lower direct and indirect support per student for post-secondary education.
  • Ballooning administrative costs: Administrative positions at colleges and universities increased 60% between 1993 and 2009 according to Bloomberg, 10 times the growth in tenured faculty positions
  • Pricey, upgraded campus amenities: Colleges keep upgrading housing, dining, technology, entertainment and fitness options to be competitive when it comes to attracting the most desirable kind of students: those with high GPAs and low need for financial aid. Costs spent per student by colleges are often viewed as attractive or used in comparative college rankings, rewarding institutions who outspend their competitors with increased student demand to attend.
  • Stagnating wages: Wages have not kept pace with inflation and certainly haven’t kept pace with rising college costs. Adjusted for inflation, the average American earns less today than they did in 1988. It’s become virtually impossible for even highly motivated students to be able to pay for college by themselves by working part-time. Stagnating wages also negatively affect graduates’ ability to pay off student loans after graduation.

The lure of a college degree as validation for student debt can be especially deadly for those who never graduate. 60% of students who start at a 4-year college graduate within the next six years. That leaves 40% without the college degree usually required to get better jobs but still likely burdened by student debt. It shouldn’t be too shocking to learn, then, that it’s borrowers with lower levels of student debt who are much more likely to default on their loans. 32% of borrowers with $5,000 or less in student debt defaulted on their loans within a four year period according to a report from The Urban Institute.

There are very real costs to society when young people are burdened by such high levels of debt. A 2017 Federal Reserve study found a correlation between higher student debt and lower rates of home ownership. Deferring marriage, waiting to have children, deciding against graduate school or not taking a lower paying public service job were additional real consequences of student debt, the study found.

College remains a good investment provided that those incurring debt are able to graduate and get their degree because of the value conferred by having a degree. College graduates can expect to make 84% more than a high school graduate, according to a 2011 Georgetown study. That degree value is lower for women and non-whites as well as for degrees such as those in fine arts or less marketable specialties.

It’s likely that overall, the student debt situation will become worse before it becomes better. We might need to get to a real crisis level of default, debt, and inability to fill jobs before politicians find the urgency and motivation to address how we finance college educations and how we manage student debt. We know, as a country, that we’re not producing highly skilled workers at a pace to replace soon to retire professionals. Meanwhile student debt continues to accrue at vast and terrifying pace.

Big Changes in How You Can Get Errors Off Your Credit Report

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Business
Big Changes in How You Can Get Errors Off Your Credit Report

PHOTO FOR JORDAN

The big three Credit Reporting Agencies (CRAs)—Equifax, Experian and Trans Union—have come to an agreement with the New York Attorney General, Eric Schneiderman, to overhaul the way they report consumer credit which will benefit consumers nationwide.

“Credit reports touch every part of our lives,” said Mr. Schneiderman. “They affect whether we can obtain a credit card, take out a college loan, rent an apartment or buy a car and sometimes even whether we can get jobs.”

Under this settlement, the CRAs have agreed to leave medical collections off credit reports until they are 180 days delinquent. This will give you 6 months to correct any billing errors with medical providers before they negatively affect your credit.

In many cases, consumers have been hit with late payment infractions on their credit reports because insurance companies have delayed or missed payments. This new agreement will prevent that. Now you’ll have time to figure out what the insurance company owes and make sure they pay what is due or be reimbursed for your out of pocket expense without hurting your credit score. The agreement also says that any debts paid by insurance must be removed from the credit report. So if your insurance is still lagging on the payment, it will be removed once the payment is processed, rather than lingering on your report for years to come.

You never plan for an illness or accident. Even if you have an 800 credit score, your score can suddenly plummet because of an accidental slip and fall or car crash. That can make your score the same as someone who irresponsibly used his credit to purchase a 70-inch TV he couldn’t afford. This New York AG agreement with the CRAs is designed to prevent that unfair situation.

Along with the medical debt, the CRAs have also agreed to implement a new process for filing disputes on credit reports. Under the present system a file can only be disputed when you believe your credit report is inaccurate. The bureaus receive these disputes and put them through an automated process. In some cases, the mistakes will be corrected, but in most cases they remain unchanged. Under the new system the disputes will be reviewed by specially trained employees in order to resolve it.

Consumers have been complaining for years that the system makes it very difficult to correct errors and disputes on credit reports. If you have outdated information on your report, you may be able to get it removed. However, if you have been a victim of identity theft, you may be stuck with incorrect information on your report for years to come. Consumer groups estimate that 1 out of every 4 consumers has some kind of incorrect information on their credit reports. Updating and correcting this information has always taken take an abundant amount of time and money.

Since the CRAs will now have an actual staff of trained employees to review disputes, they will investigate deeper and fix incorrect information that has been overlooked by the automated process. These changes will be implemented nationwide within the next 3 years, though most the new procedures will go into effect over the next 6-18 months.

This agreement is a major victory for you, the consumer. The dispute process has been overwhelming with medical debt accounting for over half of all errors on credit reports. It’s important to know any factors that are impacting your credit score and to take action against any mistakes that have been made. If you haven’t checked your credit report in a while, now is the time to get a new report.

Credit reports can be confusing, and attempting to understand them can sometimes be like learning a foreign language. It is best if you get professional help to interpret your reports and begin the process of removing errors. My favorite credit experts are at Better Qualified, they will go over your credit report with you and identify all negative items that could be unnecessarily depressing your credit score. You can get one free Trans Union credit report and score when you give Better Qualified a call or contact them online.

After completing the credit analysis, the experts at Better Qualified will educate you on how to improve your credit score. If your report is plagued by derogatory accounts that are inaccurate, Better Qualified will attempt to remove them from the report using legitimate techniques they have perfected over the years. The less derogatory information on your report, the better your credit score will be.

If you’re one of the 77 million Americans who have debts that have gone into collection, you will benefit even more by the service offered by Better Qualified. Collections take time and money to pay off and will remain on your credit report for up to 7 years after they have been paid off. Better Qualified has a team of attorneys that look for violations under the Fair Debt Collection Practices Act in the way you have been treated in the collection process. Their attorneys have been successful in not only getting your collections satisfied without you having to make any payments, but also getting them removed from your credit report.

If you become a client of Better Qualified, they will work to remove any errors on your credit report even after their original assignment has been completed.

Your credit score is the most important number in your financial life! Make sure it is as high as possible by getting rid of any errors on your credit report. Take action now to find out what is on your report and how your score can be improved. Go to www.TourDeCredit.com or call 732-413-8559 and get your free credit analysis from Better Qualified.

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