Loans

Education Department clarifies Trump executive order on student loans

Those are the same terms Congress agreed on in the last stimulus package. Lawmakers suspended education debt payments through Sept. 30 after the Trump administration in March gave borrowers the option of postponing payments for at least 60 days as the pandemic battered the economy.

As the deadline approached and Congress was unable to reach an agreement on an extension, Trump stepped in this month. But the president’s order created more questions than it gave answers about how the suspension would be applied. And by giving borrowers the option of halting their payments, rather than making the process automatic, and ignoring the treatment of loans in default, consumer advocates worried that many would fall through the cracks.

On Friday, the department addressed many of those concerns, though others remain. Chief among them is that the order still excludes more than 7 million borrowers whose federal loans are held by private

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Student Loans Company accused of encouraging graduates to make unnecessary payments

Rex
Rex

The universities minister has been urged to intervene following claims the Student Loans Company is giving graduates a “demoralising, damaging and dangerous” picture of their debts.

Martin Lewis, the consumer affairs journalist, has accused the company of urging graduates to make payments they don’t have to make.

Mr Lewis, the founder of Money-SavingExpert.com website, criticised the SLC’s new repayments website.

The site highlights an overall balance from the loans taken out as students.

But Mr Lewis said it failed to point out that the size of the debt made no difference to the amount graduates had to pay, which is linked to income.

Estimates suggest many people will never have to pay back the full balance of their debt, he added.

Repayments are currently set at 9% of a graduate’s income above £26,575. Any remaining debt not paid off after 30 years is written off.

Mr Lewis called on

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Martin Lewis hits out at “dangerous” new tool from Student Loans Company

Martin Lewis, founder of MoneySavingExpert, has been campaigning against scam ads online for over a year: Steve Parsons/PA Archive/PA Images
Martin Lewis, founder of MoneySavingExpert, has been campaigning against scam ads online for over a year: Steve Parsons/PA Archive/PA Images

Financial campaigner Martin Lewis today blasted the Student Loans Company’s new website, dubbing it “demoralising, damaging and dangerous”.

The SLC moved its site from SLC.co.uk to Gov.uk and features tools to show students how much they owe.

However Lewis argued the tools encourage students to pay off their debts faster, even though there is no financial benefit to doing so. Annual repayments are set at 9% of anything a former student earns over a certain threshold, which is currently £26,575 per year.

Lewis, the founder of financial planning site Moneysavingexpert.com and the former head of the independent taskforce on student finance information, said: “The first thing university leavers see when they log in, in a large font, is the amount of ‘debt they owe’. This is demoralising, damaging and dangerous….

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