Category Archives: Educational News

Travis Credit Union to offer free youth financial education at Diablo Valley College

Source: site

Adulting can be challenging when it comes to finances. That’s why Travis Credit Union (TCU) is offering an in-person Mad City Money Youth Financial Boot Camp, designed to prepare the next generation with personal finance skills for the workforce. All young adults between the ages of 12 – 18 are encouraged to attend and learn these financial skills that will last a lifetime.

Mad City Money is a three-and-a-half-hour simulation that gives young adults the chance to make decisions regarding budgeting, spending, and saving in an assigned-life scenario. For example, each participant will be given a temporary identity that includes an occupation, salary, debt, marital status, children, etc. The goal is to show the reality of financial responsibilities and equip them with the skills needed to make better financial decisions.

Travis Credit Union is offering a free Mad City Money event in Pleasant Hill.

July 8, 11:30 a.m. to 3 p.m. at Diablo Valley College, 321 Golf Club Road.

Students will learn how to practice budgeting as an adult under realistic circumstances. They will be able to distinguish between good and poor financial decisions. and begin making good judgments regarding spending.

Admission to this event is free. To register, please visit traviscu.org/mad-city-money.

About 2 million people are about to get a new student loan servicer

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About 2 million federal student loan borrowers, many of whom are seeking debt relief from the Public Service Loan Forgiveness program, will get a new federal student loan servicer as soon as early July.

FedLoan – an arm of the Pennsylvania Higher Education Assistance Agency known as PHEAA – is currently servicing those loans.

But a year ago, PHEAA decided to end its contract with the federal government. Beginning last fall, the federal loans serviced by FedLoan have been transferred in stages to several other servicers. About 2 million accounts still need to be transferred.

In July, loans held by borrowers enrolled in the Public Service Loan Forgiveness program will start being transferred to the Missouri Higher Education Loan Authority, known as MOHELA. These transfers will continue throughout the summer, according to the Department of Education.

In recent years, FedLoan was tasked with handling the loans for every borrower seeking debt relief from the Public Service Loan Forgiveness program, which cancels the debt of government and nonprofit workers after making 10 years of qualifying payments. Once a borrower indicated they want to enroll in the program, their loans were transferred to FedLoan.

But FedLoan drew criticism from borrower advocates for making errors and providing misinformation to borrowers about the qualifications. In 2021, PHEAA settled a lawsuit brought by Massachusetts Attorney General Maura Healey, alleging the loan servicer violated state and federal consumer protection laws. PHEAA agreed to provide individual audits to all 200,000 Massachusetts borrowers it services.

Last year, the Biden administration temporarily expanded eligibility for the Public Service Loan Forgiveness program to include borrowers who have older loans that didn’t originally qualify as well as those who were in the wrong repayment plan but met the other requirements. By the end of May, the Department of Education had approved forgiveness for close to 145,000 borrowers under this waiver.

What borrowers can expect

Public Service Loan Forgiveness borrowers can expect to receive several notices as their loans are transferred.

A notice from FedLoan is expected to be sent at least 15 days before the transfer occurs, followed by a welcome notice from MOHELA once the transfer is complete.

Borrowers’ full account details should be available from MOHELA no later than 10 business days after the loan transfer date included in the transfer notification sent from FedLoan, according to the MOHELA website.

The loans are being transferred, not sold. That means the change will not impact the existing terms, conditions, interest rates, loan discharge or forgiveness programs, or available repayment plans on the loans. The repayment plan a borrower is enrolled in does not change once transferred unless the borrower opts to make a change.

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Borrowers are not required to do anything during the transfer process.

FedLoan also services some non-PSLF borrowers. The vast majority of those accounts have already been transferred from FedLoan to other loan servicers, including Aidvantage, EdFinancial or Nelnet.

Two other loan servicers also ended their contracts with the Department of Education last year. Loans serviced by Navient were transferred to Aidvantage and loans that were serviced by Granite State were transferred to Edfinancial Services. Those transfers were complete by the end of 2021.

The Department of Education post updates about PSLF processing and loan transfers to its website Studentaid.gov.

How to qualify for the PSLF waiver

To take advantage of the temporary PSLF waiver, some borrowers may need to take action by October 31.

Borrowers who previously had a non-qualifying loan, such as the Federal Family Education Loan, must consolidate their debt into a federal Direct Loan and then submit a PSLF form to show qualifying employment by the October deadline. After the consolidation is complete, the new loan will be transferred to MOHELA.

For those who are currently serviced by FedLoan and are enrolled in the PSLF program, no action is required. Their loans will automatically be transferred to MOHELA over the summer.

The Department of Education continues to review PSLF borrowers’ past payments to count those who are newly eligible for the forgiveness program. Due to the temporary waiver, it no longer matters what kind of federal student loan a borrower had or what payment plan he or she was enrolled in. All payments will be eligible for the PSLF program if the borrower was working full time for a qualifying employer.

More changes could be coming for federal student loan borrowers

The transfer of federal student loans from FedLoan to MOHELA this summer comes as borrowers await to hear whether President Joe Biden decides to extend the pandemic-related pause on payments, as well as if he will act to broadly cancel student loan debt.

Payments are set to resume on federal student loans after August 31 after being paused since March 2020. Federal student loan borrowers’ balances have effectively been frozen during this time. Interest has stopped adding up and collections on defaulted debt have been on hold.

Biden has already extended the pause several times and is facing political pressure to delay the restart date again, which is currently set two months before the midterm elections.

The President is also facing pressure to cancel some student loan debt for every borrower. In April, Biden said he was considering some broad student loan forgiveness.

On the campaign trail, he said he would support $10,000 in forgiveness. White House officials have indicated that he is also looking at setting an income threshold so that high-earning borrowers would be excluded from the debt relief.

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Department Of Education To Overhaul Federal Student Loan Servicing Systems

Source: site

The Department of Education is preparing a major overhaul for the current student loan servicing systems.  (iStock)

The Department of Education recently announced that it will overhaul its current federal student loan servicing systems, giving more power to borrowers to easily manage their student loans.

The department said it expects that improving the servicing systems could help borrowers to avoid missed payments or even default.

“The USDS [Unified Servicing and Data Solution] is the long-term loan servicing solution designed to provide federal student loan borrowers with a 21st-century customer experience,” Richard Cordray, the Department of Education’s chief operating officer, said in the May 19 announcement. “Building on lessons learned from past loan servicing efforts, FSA and the U.S. Department of Education are committed to holding USDS servicers accountable for a high level of performance and focusing on key objectives like reducing borrower delinquency and default.”

If you are struggling to repay your education debt, you could consider refinancing your private student loans to reduce your monthly payments. Visit Credible to find your personalized interest rate without affecting your credit score.

BIDEN ADMINISTRATION CANCELS $5.8B IN STUDENT LOAN DEBT

Student loan servicers not reaching federal expectations

There are six loan servicing systems that work with federal student loan borrowers through their time in school and their repayment. Each system has its own staff, website and contact center and conducts its own borrower outreach. However, Cordray said this approach is detrimental to borrowers.

“This disjointed servicing system is often confusing for borrowers and, frankly, the quality of work has not always met our standards,” he said. “Borrowers are understandably frustrated when they receive inconsistent information about something as important as their student loans. Too often, borrowers miss out on available repayment options, and millions have defaulted as a result.”

The current loan servicing contracts will expire in December 2023, making it an optimal time to create a new system, according to the Department of Education. The goals for the new systems that are implemented will be to:

  • Give all Federal Student Aid (FSA) borrowers complete loan management through StudentAid.gov
  • Reduce disruptions for account transfers
  • Boost servicers’ accountability to decrease student loan delinquencies and defaults

While these updates will only apply to those with federal student loan servicers, private borrowers can change their student loan servicer and possibly lower their monthly payments by refinancing. Visit Credible to compare multiple student lenders at once and choose the one with the best interest rate for you.

BIDEN ADMINISTRATION VAGUE ON WHEN STUDENT LOAN REPAYMENT WILL RESUME AS POTUS WEIGHS DEBT FORGIVENESS

FSA to modernize student loan repayment

FSA has already begun taking steps to implement its vision for modernizing the student aid experience, calling it “Next Gen FSA.” It seeks to modernize its technology, processes and operations for student lending, giving borrowers more access and control through their online accounts.

Under the new system, the USDS will give the management of all servicing platforms, contact centers and manual processing activities for all nonspecialty loan servicing activity to FSA. The work currently associated with specialty programs such as the Public Service Loan Forgiveness (PSLF) Program and others will shift to StudentAid.gov and FSA’s Business Process Operations (BPO) vendors.

“These extensive efforts cannot be accomplished immediately, so FSA is taking an incremental approach,” Cordray said. “We are launching a focused set of high-return enhancements when the USDS servicers go live.”

When it launches, USDS will co-brand with FSA and create a single sign-on experience for all federal student loan borrowers. Within five years, FSA will move into full account management and repayment.

Private student loan borrowers looking to lower their monthly payments could consider refinancing. To see if this is the right option for you, contact Credible to speak to a student loan expert and get all of your questions answered.

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

CFPB Targets Student Loan Debt Relief Scam Reboot

Source: site

On June 9, the CFPB filed a complaint and proposed order in California federal district court seeking final judgment against the owner of a student loan debt relief company for allegedly withdrawing more than $240,000 from the bank accounts of student borrowers without authorization.

According to the complaint, the defendant, through his company, obtained student loan account and billing information for hundreds
of borrowers without the borrowers’ knowledge or consent from another student loan debt relief operation that the CFPB previously
shut down, and subsequently used that information to withdraw unauthorized funds from student borrowers’ bank accounts. The
Bureau alleges that through his actions as the company’s chief executive, defendant engaged in and substantially assisted in
unfair acts and practices in violation of the CFPA—specifically, that in addition to controlling the company and facilitating the debits, defendant was aware or should have known the debits were unauthorized given that it obtained borrowers’ information from the previously shuttered company without the borrowers’ knowledge or consent, and collected recurring fees from borrowers without authorization or entering into any contracts or agreements with the borrowers.

If approved by the court, defendant would be required to pay a $175,000 penalty to the Bureau and would be permanently banned from
offering, providing, or assisting others in offering or providing debt-relief products or services, financial advisory services, and
other consumer financial products or services.

Putting It Into Practice: The CFPB has recently initiated other enforcement actions against student loan debt relief companies (we discussed these actions in previous blog posts here and here.) According to CFPB Director Rohit Chopra, this recent enforcement action serves as a reminder that “[w]hen student loan servicers don’t provide clear and accurate information to borrowers, it sets the stage for scammers to swoop in.” Student loan and debt relief companies should take heed of the CFPB’s Directors comments here and ensure that
they protect against potentially fraught transfers of sensitive borrower information.

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Tropical Financial Credit Union Awards $10,000 in Scholarships to Local Students – Coral Springs Talk

Source: site

Three students, including one from Coral Springs, will have a little less financial stress heading into college thanks to a $10,000 in scholarships from Tropical Financial Credit Union.

As the cost of everyday items continues to soar, the students will have fewer worries about their college tuition. This year, the credit union awarded three scholarships totaling $10,000: One grand prize of $5,000 and two $2,500 awards.

Shannon Feerick-Hillenbrand, a resident of the Island of Wyndham Lakes received a $5,000 scholarship. She graduated this spring from the Carrollton School of the Sacred Heart High School in Miami.

Her mother, Hillary, started with Tropical Financial when they took out a car loan and eventually two guardian accounts for their two children when they were around 13. Both children continue to bank there and have learned to manage their money over the years.
Shannon will attend Brown University in the fall, where she plans to major in Political Science. She says she hopes to enact political change in the future.  

“We are very proud of Shannon and her acceptance into an ivy league school with a very low acceptance rate,” said Hillary, who added she was a competitive policy debater in high school.

Other recipients are:

Sophia Elizabeth Hernandez is one of the two $2,500 scholarship winners. After graduating from West Broward High School, she will be heading to Suffolk University in the fall to study English and creative writing. She is also a National Hispanic Recognition Program winner.  

Samantha Benjamin is TFCU’s second $2,500 scholarship winner. A recent graduate of Hofstra University, Samantha is starting medical school this summer at Meharry Medical College in Nashville. She decided she wanted to be a physician at 11 years old when her mother was diagnosed with cancer. Samantha’s mom is now a cancer survivor, and she is well on her way to fulfilling her goal of becoming a doctor.  

“When it comes to budgeting for today’s college students, every little bit helps,” said Rick Shaw, president/CEO. “We are proud to offer these scholarships to deserving members who are ready to kick off a successful year at school and ease the financial strain that can come with it.”

All the applicants were required to submit an essay highlighting their personal and educational objectives and how Tropical Financial has helped or could help them reach financial goals. Other factors are community involvement, charity work, and extracurricular activities.

This is the 10th year of the program to help local students further their education.