If you are one of the 44 million people in the United States who are having trouble paying off your student loans, you are not alone. New data shows that student loan debt is greater, per person, than ever before. For one, nearly half of all student loan holders leave school with at least $20,000 of debt; that is twice what borrowers owed about ab decade ago. Actually the average student graduating from college (or post-secondary) will get that degree with more than $37,000.
All together, this population owes more than $1.4 trillion in student loans.
In fact, the United States Consumer Financial Protection Bureau Director Richard Cordray reports: “The Bureau’s research shows that people are taking on more student debt later in life, and having a tougher time paying it back.”
But just because you are not alone on this journey, that doesn’t mean the agencies involved will be any more understanding. If you are looking to take out student loans, you need to make sure that you understand the terms; and hopefully you find one with flexible repayment options. If you don’t, you could find yourself in one of the many student loan pitfalls.
For one, if you are not able to pay back your loans on time, they first become delinquent. Delinquency is not necessarily a problem, as long as it is temporary. You can miss a payment once in a while and there is not usually a problem. If you think you are going to have trouble, you can also usually make arrangements with your lender to make a later payment or have all your payments deferred through a program called forbearance.
Forbearance is an excellent option if you know that you are probably going to need several months to start making payments. Essentially, you can apply for financial hardships and simply have the payments reduced or even stopped, as well as the interest (depending on the loan type).
The following types of loans will not accrue interest during a deferment or forbearance period:
- Direct Subsidized Loans
- Subsidized Federal Stafford Loans
- Federal Perkins Loans
- [the subsidized part of] Direct Consolidation Loans
- [the subsidized part of] FEEL Consolidation Loans
The following types of loans will continue to accrue interest during a deferment period:
- Direct Unsubsidized Loans
- Unsubsidized Federal Stafford Loans
- Direct PLUS Loans
- FEEL PLUS Loans
- [the unsubsidized part of] Direct Consolidation Loans
- [the unsubsidized part of] FEEL Consolidation Loans
Amazon Emerges As A Top Destination For MBAs
Online retail giant Amazon has emerged as a top recruiter in renowned business schools across the United States. In business schools such as those of University of California, Berkeley; Duke University and Carnegie Mellon University, Amazon is the top recruiter. At Massachusetts Institute of Technology, Duke University, Dartmouth College and University of Chicago, it is the destination of choice for students seeking internships.
According to the dean of University of Chicago Booth School of Business, Madhav Rajan, Amazon accepted more interns from the institution than either McKinsey & Co or Bain & Co, which were previously the top intern hirers from the school. Per Amazon’s university programs director, Miriam Park, the online retail giant has hired about 1,000 MBAs in the last one year. That’s tiny in light of the fact that Amazon is planning to recruit 50,000 software developers next year.
However the scale of hiring that Amazon is conducting at business schools is upending campus recruiting and stymieing other companies who are also eyeing the hires. According to Park, MBAs understand the customer-obsessed ethos of Amazon and thus tend to be analytical, scrappy and risk-oriented. Many of them go on to fill the future leadership ranks of the online retail giant in positions such as senior project managers. This is a role that pays an average of between $120,000 and $160,000 per year. The shift of MBAs from consulting and finance has come as technology companies which were once uninterested in them, have learned their value.
In its recruiting process Amazon has employed the same strategy with which it does business in regards to how it competes with other companies looking to hire. Recruiters from the company descend on these business schools en masse and then keep in touch with the students. This contrasts sharply with other companies which typically send one or two recruiters.
The talent wars start at the onset of classes and sometimes even earlier. In June Amazon sponsored an event at its headquarters in Seattle for about 650 women set to join MBA programs as well as some returning students. Among this group some were offered internship offers set to begin in summer next year.
Despite Amazon’s popularity, the head of recruiting at consulting firm Bain & Co, Keith Bevans, said the company continues to get its share of elite MBAs who stand to learn problem-solving and strategy from the masters.
“Going to the best grocery store in the world doesn’t make you a better chef,” said Bevans.
US Education Inspectors Want to Pull Federal Student Aid from Popular Online University
The US Department of Education’s Office of the Inspector General has recently said it wants to force Western Governors University to pay back $713 million in loans and grants. The claim is that the faculty for the online university has only very small roles in the course of a student’s college education and, thus, the school is not eligible for federal student financial aid.
According to a government audit, Western Governors University did not follow higher education laws and regulations. Essentially, the audit claims that the university’s faculty only interacts with students at a very minimal level and that even the courses offered are not varied enough. As such, the office is recommending that the school must repay the federal Title IV financial aid dollars (between 2014 and 2016).
To put it another way, the audit investigates the difference between higher learning courses and correspondence courses. Specifically, the Office wanted to look at this level of interaction as previously mentioned. According to the Office of the Inspector General, a school is only eligible for Title IV funds if it offers no more than 49 percent of its courses by correspondence (limited staff interaction) or if no more than 49 percent of its regular students are enrolled in such course types.
The Inspector General report notes, “The course design materials for all 69 of these courses described courses that would be self-paced, interaction between the students and instructors that would primarily be initiative by students, and interaction between the students and instructors that would not be regular and substantive.”
Of course, Western Governors University maintains that they are not breaking any laws. Instead, WGU explains that students enroll in majors and work with faculty in an individualized program; they simply do not take formal classes.
And WGU president Scott Pulsipher confides: “The OIG for the Department of Education has no enforcement authority, so this audit, their recommendations and analysis, are only that. That is simply what they are recommending to the Department of Education, who has final authority whatsoever as it relates to whether or not they would act on any of these recommendations.”
Furthermore, Pulsipher says that the school remains confident the US Department of Education will not follow through with these recommendations. He notes, “[THE OIG] opinion is that WGU is not following the provisions of regular, substantive interaction between faculty and students. We strongly disagree with their opinion, and just because they have that opinion doesn’t make it right.”
Trump Announces New STEM-focused Education Funding
In a somewhat surprising move, US President Donald Trump issued a proclamation this week to boost education in science, technology, engineering, and math (otherwise known as STEM), with a specialized focus on computer science and coding.
And, perhaps, an even bigger focus on encouraging more young ladies to enter the field.
Yes, this week President Trump has set aside $200 million a year to address this initiative. Of course, Trump’s eldest daughter, Ivanka, has been working closely with the Department of Education on this project.
“It’s easy with computer science and technology to relegate it to simply the tech field,” she told reporters this week in a press call to preview the initiative. “But the reality of the modern workforce is that technology is innovating and disrupting every industry. It is viewed by this administration as a foundational skill to understand computer science.”
Again, the new Department of Education initiative is aimed not only on developing STEM education but also at reaching more young girls and more minority students.
One senior Trump Administration official commented, “The programs need to be designed with diversity in mind.”
Commenting on the program, Trump notes, “The workplace is changing, we need to create new pathways for our citizens to get the best jobs. Greater access to STEM and computer science programs will ensure our [children] have the skills they need to compete, and win, in the [workforce].”
Ivanka Trump echoes her father’s words, saying, “In recent years, with growing technological advancement, the nature of our workforce has increasingly shifted to jobs requiring a different skill set.”
After all, this proclamation should move towards building on Trump’s earlier executive order to encourage more apprenticeships. To help move all of this forward, the Trump Administration will release a list of private companies who will partner to help build these new computer education programs.
An administration official advises that the $200 million in funding will come to the program in the form of grants. More importantly, perhaps, this funding will not require any additional Congressional legislation. “It’s minimum of $200 million,” he comments. “It could, and most likely will, end up being more than that.”