Last week, the US Department of Education reportedly told Federal Student Loans Services not to contact borrowers about resuming student loan repayments on August 31. Additionally, the department has released several regulatory proposals aimed at increasing college accountability and equitable access to higher education. . Here’s what you need to know about this week’s student loan trends and how they could impact your balance.
2 Current Student Loan Trends for the Week of August 1, 2022
1. Department of Education Reportedly Asked Services to Delay Student Loan Repayment Communication
As the federal student loan payment pause comes to an end on August 31, the Department of Education has reportedly told federal services not to contact borrowers about repayment, according to a report from the the wall street journal.
This information comes at a confusing time for federal student loan borrowers. The student loan payment break has been extended six times since March 2020, although many expected August 31 to be the final expiry date. However, managers are required to send borrowers a billing notice at least 21 days before their first payment is due. If the administration has asked services to refrain from sending billing statements, it could mean that another extension of the payment pause is in progress.
How it affects student loans
The last time the student loan suspension was extended, loan servicers were also told to suspend communication with borrowers. However, while this latest news could be an indication of another extension, the administration has yet to officially comment. At this point, borrowers should keep an eye on their manager’s information and prepare for their payments to resume as scheduled.
Take away key
The Department for Education has reportedly told services not yet to communicate with borrowers about restarting student loan repayment.
2. New regulatory proposals aim to improve college accountability and protect students
Last Tuesday, the Ministry of Education (ED) released another round proposed regulatory changes focused on college oversight and access. According to the ministry’s press release, the changes are “a continuation of the ministry’s commitment to protecting students and taxpayers and building a stronger and more accessible higher education system.”
If consensus is reached, here is what the regulatory program proposals would do to protect borrowers:
- Protect veterans and military by reinforcing the 90/10 rule: The 90/10 rule requires for-profit schools to derive at least 10% of their revenue from sources other than federal education aid. However, the schools got more funding from the Department of Education through a loophole in which they recruit veterans and military without the need for private investment. The new rules would close this loophole and ensure that these students are no longer subject to predatory recruitment.
- Clarify institutional procedures regarding ownership changes to protect students and taxpayers: When a school changes hands or status (such as converting from for-profit to non-profit status), new regulations would require it to provide 90 days notice to students and the Department of Education. ‘Education. This would reduce the risk of insider involvement and improper financial benefits for affiliates of this college.
The Education Department has also proposed making incarcerated students eligible for the Pell Grant by July 2023.
How it affects student loans
This set of proposals will most directly affect veterans, who have been subjected to predatory recruiting tactics by for-profit colleges, and incarcerated individuals, who have long been denied access to student aid under the form of federal Pell grants.
These proposals have entered the first stage of the federal process of amending student loan regulations, also known as the development of negotiated rules. Effective immediately, these proposals are open for public comment on the Federal Register for 30 days and will then be discussed by a panel of negotiators. If a consensus is reached, the new regulations will be implemented in 2023.
Take away key
The Department of Education released new regulatory proposals that would better protect student borrowers and increase oversight of for-profit colleges.
Here’s how you can prepare
Whether you’re new to student loans or in the process of repaying, it’s wise to stay informed about how your student loan rates might change. In 2022, more opportunities for cheaper loans or loan forgiveness may open up; keep an eye on the Bankrate student loan news hub for the latest trends.