What Devos Means for Student Loan Borrowers


Hey guys! Jeni here If you've been watching the news at all lately I'm sure you've seen more than you ever wanted to about proposed budget cuts for higher education and student loan funding

Today's video I'm going to touch very briefly on DeVos' proposal to eliminate the public service loan forgiveness entirely Then I'm going to focus mainly on DeVos' proposal to have only one company service all federal student loans So let's get right into it The first proposal in the DeVos department of education budget for 2018 that we're gonna talk about is to eliminate public service loan forgiveness This is proposal is kind of unclear whether existing borrowers would be grandfathered in or not

We won't talk a ton about that today I'm gonna do a video next time which is going to focus on what you can do if you find yourself in a situation where loan forgiveness has been eliminated So I'm gonna try and give you the power to navigate that situation and hopefully alleviate some of the worry you might have about this uncertainty Alright let's get into the proposal to simplify to only one company managing all federal student loans A key thing to note is that existing contracts with the multiple companies that currently service federal loans go into 2019 so the proposal to have one company would not go into effect until at least 2019 Alright, so why has DeVos proposed moving to a one payer model? The reason for this has been cited to be a simplification of an overly complex system

Some of the pro's would be that Devos' administration reports they would be better able to monitor the performance of one servicer and their system They have also proposed that this would lead to superior customer service The biggest benefit would be to the loan servicing company in that they would likely be more profitable because there would be less red tape Some of the cons of this are pretty obvious and easy to identify If you have one company managing a 1

4 trillion dollar industry there will be no incentive for them to accommodate borrowers Historically we did have a single payer service that was ACS Education Services and they serviced all federal loans Critics of that company reported widespread customer service failures and loan consolidation failures Also at that point in time the Department of Education reported that they had little leverage against that company That is why multiple companies and contracts were awarded to different companies to sort of increase the competition

What can you do as a borrower? The biggest thing for you to do is going to be to call your representatives Borrowers represent 44 million individuals and we are a 14 trillion dollar industry The numbers and the money that we owe is not insignificant and it's important that our voice is heard and that we're represented I know that I will be calling my representatives to express my concern about these proposals and I encourage you to do the same thing

So I'd love to know what you're thoughts are on this Leave them below in the comments Lastly, the next video I will be talking about what to do if loan forgiveness disappears I would really love it if you would either comment below or send me a message and let me know what your biggest fears are and what you worry about the most if loan forgiveness were to disappear I really hope you guys enjoyed the brief update, let me know what you think

And as always if you like this information you should subscribe and keep yourself in the know

Source: Youtube


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