Massachusetts Launches Statewide College Savings Accounts Program
This month, State Treasurer Deborah B. Goldberg announced SeedMA Baby, a statewide savings account program that aims to put children on the pathway to saving for college. Our founder Bob Hildreth has pledged to deposit the first $300,000 into these accounts (in form of $50 deposit), as he has witnessed firsthand the positive effects that saving for college can have on families. Children from low- and moderate-income families with less than $500 in college savings are found to be three times more likely to attend college and four times more likely to graduate. If you want to read more on this program and why Bob has decided to be the founding investor, click HERE.
Other MA news:
Teachers are fighting back!
In August, we highlighted an excellent Mother Jones’ cover story on the ‘BIG SCAM’ showcasing that less than 1% of those who applied for Public Service Loan Forgiveness (PSLF) Program qualified for relief, amounting to just 96 borrowers! PSLF was created in 2007 to decrease the financial burden of student debt for those who chose to work in low-paying public service jobs. As the teachers’ union investigated why more if its members did not benefit from the program, they uncovered that they were systematically misled and even blocked by student loan servicer Navient. So now, the teachers are fighting back! Nine teachers, backed by the largest union, the American Federation of Teachers, filed a lawsuit accusing Navient of negligently blocking their access to the PSLF. The lawsuit claims that Navient purposefully steered customers away from the PSLF program, as it meant losing these accounts. Currently, only one servicer, the Pennsylvania Higher Education Assistance Agency, also known as FedLoan, handles those seeking public service loan forgiveness. This suit has a the potential to become a class action, and expose the corrupt inner games played by loans servicers that are paid by the Education Department.
Democrat Senator Jeff Merkley proposes affordable, simple income-based repayment plans
As you know well by now, here at HI, we aspire for a ZeroDebt higher education system. However, we recognize that it is imperative to find solutions that will decrease the financial burden for of those who have borrowed and are still borrowing today. Merkley’s proposed bill, Affordable Loans for Any Student Act of 2018, is a huge step in the right direction as it would overhaul the confusing system of income-based repayment plans to give borrowers a simple choice between two plans:
- A Fixed Repayment Plan with equal monthly payments sufficient to repay the loan and any accrued interest over a period of 10 years; or
- An Income-Based Repayment (IBR) Plan in which a borrower pays 10 percent of their income above a poverty level, capped at 20 years of payments.
In addition, he proposes critical changes that would help those who are most vulnerable, such as:
- Ending interest capitalization and origination fees on all loans, which can add thousands of dollars to a borrower’s total payments over the life of the loan.
- Targeting assistance to struggling and low-income borrowers.
- Allowing for automatic re-certification of income for IBR plans.
- Limiting aggressive federal debt collection amounts that are obtained through wage garnishment or tax offset to no more than the amount the borrower would pay under IBR.
- Replacing the current deferment and forbearance options into one, streamlined “pause payment” process that does not capitalize interest.
- Providing relief to severely delinquent borrowers and those who rehabilitate their loans by automatically enrolling them into the IBR plan.
- Changing the use of the confusing term “master promissory note” to “student loan contract” to improve consumer understanding of the purpose of the document.
- Improving other loan disclosures and interactive counseling.
Finally! The Obama-era student loan borrower protections will take effect
Education Secretary Betsy DeVos has fought for more than a year to stop Obama-era student loan borrower protection rules. A group of 18 states, led by Maura Healey, the Democratic attorney general of Massachusetts, have challenged DeVos’ attempts to postpone the rules. Finally the federal courthas decided in favor for these rules to take effect! This is a major victory for students defrauded by for-profit colleges like Corinthian and ITT Tech to find relief and have their federal loans discharged. Read HI’s statement on this victory HERE.