2018 SFA Conference – Atlanta

2018 SFA Conference Highlights:

  • Sec of Ed Betsy DeVos – Accountability and student loan debt is crisis
  • Third Party Audits- Not necessary if all you are doing is default prevention. Just file an Assertion Letter with ED. "Third Party Oversight Group" in Kansas City. See Dear Colleague Letter Gen 16:15

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IBR Great but Don’t Over Sell It.

Is IBR plans helpful? I just recently read this article about IBR’s take a look here…https://www.forbes.com/sites/prestoncooper2/2018/08/07/income-based-repayment-reduces-student-loan-delinquency-but-dont-oversell-it/#7cf66f6e37d0

Matt Klabacka

702-610-8574 mobile/text

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New 90/10 Rule Poised to Help Career Colleges

read full article here. https://www.educationnext.org/change-rules-unleash-innovation-forum-rethinking-rules-federal-higher-ed-spending/

Matt Klabacka

Default Prevention
702-610-8574 mobile/text

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Gainful Employment Renaming and Covering Harvard Also

ED is getting ready to throw a bone to the for profit industry by making all higher ed institutions comply with a gainful employment stylized reg….read more at wsj…

https://www.wsj.com/articles/devos-plans-to-repeal-obama-rule-targeting-underperforming-training-colleges-1532641977

Matt Klabacka

Default Prevention, Inc

PO BOX 50682

Henderson, NV 89016

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Loan Forgiveness Program Major Changes

Recent Article in WSJ regarding loan forgiveness from

Zack Friedman is a keynote speaker and Founder & CEO of Make Lemonade, a personal finance comparison site that helps you save money and live a better financial life. wall Street Journal Article

A new republican bill in the House of Representatives could end public debt on student loans. If you have student loans and plan to work in the civil service, be sure to do so. Or, if you have student loans and plan to use a federal student loan repayment program, this bill could affect your plans. You have to know that.

PROSPER law Rep Virginia Foxx (RN.C.) and Rep Brett Guthrie (R-KY) Committee of Representatives on Education and Workforce presented 542 pages of legislation known as Real Chance to Promote Success and Prosperity through the Education Reform Act (PROSPER).

The bill affects higher education in various material ways, including the immediate abolition of forgiveness of public services. PROSPER also reduces state aid programs and restricts the regulations that traditionally restricted federal funds to for-profit universities. Sponsors hope to reduce the role of taxpayers in funding state public education

What is the forgiveness of public loans? Program Loan Forgiveness for Civil Service is a federal program that pardons federal student loans to borrowers who work full time (more than 30 hours per week) in a job of federal, state, or local qualified public service or 501 (c) (3) non-profit work, which entitles 120 timely payments for 10 years. In order to qualify for public sector loan indebtedness, a borrower must be enrolled in a federal loan repayment program. Almost 600,000 borrowers have registered for the forgiveness of public loans. Earlier this year, the US Department of Education UU He proposed to cancel the pardon of public-law loans.

In addition, in a law filing on March 23, the Department of Education said student loan borrower could not have sent approval for loan forgiveness public service sent by program managers, service FedLoan, because any approval it is considered provisional. President George W. Bush launched the public service loan pledge in 2007 to inspire more graduates to enter the civil service.

Benefits for schools for profit Profit-oriented schools would benefit from PROSPER. For example, the law would delete "Rule 90/10," stating that for-profit colleges can not receive more than 90% of their income from federal title IV support. The bill also removes the rule of paid employment, which sets minimum debt-to-income ratios for graduates of for-profit universities. Under current regulations, non-profit colleges do not meet the minimum threshold for employment as they are not eligible for State aid. Changes in the repayment of student loans

Student loan payment plans would be reduced from eight options to two: a standard 10-year plan and an income-based plan. According to the current loan repayment programs of the federal student as PAYE and REPAYE, borrowers can limit their monthly student loan payments based on their income and then students receive loans after 20 or 25 years (depending on whether they have a college degree or postgraduate).

PROSPER would eliminate the forgiveness of student loans after 20 or 25 years, but limit interest payments after 10 years. Threshold of June 2018 Neither the proposed changes to public sector loan indebtedness nor the repayment of federal student loans (PAYE / REPAYE) would affect the current borrowers who participate in these programs. In contrast, borrowers participating in these programs after June 2018 would be the first to be affected.

So, if you are a student loan borrower who enrolled in a government loan repayment program that subscribed to Public Service Loan Forgiveness before June 2018, you will likely continue to benefit from the Public Service Loan Agreement. If you are currently a student loan borrower who does not enter a federal student loan repayment program before June 2018, then you would not benefit from the Public Service Loan Forgiving under this proposed legislation.

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5,000,000 borrowers in Default Status

The Wall Street Journal reported today that "The number of Americans severely behind on payments on federal student loans reached roughly 4.6 million in the third quarter"….read more.

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Bankers Ease Rules on Private Loan Automatic Defaults

Private lenders are revising student loan contracts to ensure people are not placed in default when the co-signer of their loan dies or declares bankruptcy, putting an end to a practice brought to light by the Consumer Financial Protection Bureau.

read more here

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