Duncan & Mills host #GradStartup Twitter Q&A

Small Business Administrator Karen Mills made her Twitter debut yesterday as she and Secretary Arne Duncan hosted an online Q & A responding to questions about how to start a new business, the loan repayment and forgiveness plans available to student loan borrowers, and how to find resources for aspiring entrepreneurs.

Check out the entire Q&A below:

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President Obama Calls on Congress to Prevent Student Loan Interest Rates from Doubling

“In America, higher education cannot be a luxury,” President Obama said in his weekly address. “It’s an economic imperative that every family must be able to afford.” At a time when higher education has never been more important, the President is calling on Congress to prevent student loan interest rates from doubling for more than 7.4 million students this summer. Without action, the average borrower will see an average of $1,000 added to their debt.

Watch the address:


Click here for an alternate version of the video with an accessible player.

ED & SBA Host Twitter Chat: Connecting Grads to Resources to Help Them Startup

Cross-posted from SBA.gov

Graduation season is right around the corner and to help grads that are looking to start a small business, SBA and the U.S. Department of Education will host a Twitter Q & A Session on April 25 at 2pm EDT connecting soon-to-be grads or recent grads to resources to help them startup, succeed and create an economy built to last.

Startup logoI, along with U.S. Department of Education Secretary Arne Duncan, will answer your questions about starting a business and  highlight the Income-Based Repayment (IBR) Plan, which supports young college grads that are looking to start a business, join a startup, or work in a public service job by making Federal student loan repayment manageable.  IBR helps to keep loan payments affordable by using a sliding scale to determine how much you can afford to pay on your Federal loans—empowering you to take risks with new opportunities like starting a small business.

Submit your questions now and follow the conversation on Twitter using the hashtag #GradStartup.

What: Twitter Q&A Session: Connecting Grads to Resources to help them Startup with SBA Administrator Karen Mills and U.S. Department of Education Secretary Arne Duncan

When: Wednesday, April 25 from 2:00pm–3:00pm EDT

Where: Follow the Q & A on Twitter and submit your questions now, hashtag #GradStartup

- Karen Mills

Karen Gordon Mills is the Administrator of the U.S. Small Business Administration.

Consumer Financial Protection Bureau’s Student Loan Complaint System is Open for Business

Cross-posted from the CFPB’s blog.

Since we opened our doors, student loan borrowers have told us about some of the frustrations they sometimes face with their lenders, servicers, and debt collectors. Borrowing for college should be the best investment you’ll make, but for many Americans, paying off those student loans is a real challenge.

For several years, federal student loan borrowers have had the Department of Education’s Federal Student Aid Ombudsman to help bring their concerns to financial institutions. But for millions of students and their families, federal student loans don’t cover the full cost of college and they need private student loans to make ends meet.

However, private student loans – which don’t always carry the same consumer protections as federal student loans – have been overseen by a patchwork of government agencies. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress established an Ombudsman for private student loans within the Consumer Financial Protection Bureau to assist borrowers with private student loan complaints. This means a single federal agency is now responsible for watching out for all students and families who choose to borrow private student loans.

Today, we are open for business and ready to hear from you. To ask a question, file a complaint, or share your story: go to www.consumerfinance.gov/complaint or call our toll-free number at 1-855-411-CFPB.

If you file a complaint, we’ll work with your lender or servicer to get a response. While we certainly can’t make your debt disappear, we can help bring your concern to your financial institution’s attention. If you don’t have a specific complaint or question, but want to tell us what is – or is not – working in the student loan market, we invite you to tell your story.

And while the Consumer Bureau has only been open for a short time, we’ve been hard at work to gather the facts and provide tools to help you make good decisions about student loans. We launched an online tool, the Student Debt Repayment Assistant, to help you navigate the maze of student loan repayment options. We also launched Know Before You Owe: student loans and worked with the Department of Education to develop a draft “financial aid shopping sheet” for schools to improve the student loan information they give to students.

Our team at the Bureau will keep working to give you the tools and the information to make sound financial decisions on student debt – and to figure out your options in case things don’t go according to plan. These days, we all seem to know someone having a tough time with their student loans, so share this new resource by e-mail, Twitter, and Facebook (just use one of the buttons below). With your participation, we can help make the student loan market work better for all of us.

Rohit Chopra is the CFPB’s student loan ombudsman.

Don’t Forget Your 1098-E Tax Form When Filing Your Taxes

UPDATE: For the most up-to-date information on getting your 1098-E, visit www.ed.gov/1098-E.

If you made payments on your federal student loans during 2011, you may be eligible to deduct a portion of the interest you paid on your federal tax return.  Student loan interest payments are reported on Internal Revenue Service (IRS) Form 1098-E, Student Loan Interest Statement (commonly called the 1098-E).

Your student loan servicer (the entity you make payments to) will provide you a copy of your 1098-E.  Your servicer may send you your 1098-E via U.S. Postal Service or electronically.  Check with your servicer if you haven’t yet received your 1098-E for 2011.  If you had multiple loan servicers in 2011, you will receive a separate 1098-E from each servicer.

If you’re not sure who your loan servicer is, you can look it up on www.nslds.ed.gov or call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913). To see a list of Federal Student Aid servicers for the Direct Loan Program and for FFEL Program Loans purchased by the U.S. Department of Education, go to our Loan Servicer page.

For more information about student loan interest deduction, visit the IRS’s Tax Benefits for Education: Information Center.

Obama in Michigan: Views from a Teacher and Parent

… The degree you earn from Michigan will be the best tool you have to achieve that basic American promise … be part of something that is adding value to this country and maybe changing the world.  …That’s what the American Dream is all about.  

My grandfather got the chance to go to college because this country decided that every returning veteran of World War II should be able to afford it.  My mother was able to raise two kids by herself because she was able to get grants and work her way through school.  I am only standing here today because scholarships and student loans gave me a shot at a decent education.”

When President Obama spoke these words to the crowd at the University of Michigan on Friday, he described the situation of many students in the audience who struggle to pay for the education they’ll need to participate in the American Dream. Like the President, I have two daughters of whom I am very proud, and both are fortunate to attend the University of Michigan.

Tracey with Secretary Duncan in Michigan

Tracey with Secretary Duncan at the University of Michigan Ann Arbor before President Obama's speech.

As a high school teacher in Ann Arbor and a single parent who is solely responsible for my daughters’ tuition bills, I welcome the President’s plans in the “Blueprint for an America Built to Last” to make college more affordable for families like ours. Everyday I worry about the debt my girls will have when they graduate. Expanding work study opportunities and keeping interest rates low on federal loans will be crucial to my daughters’ and other students’ ability to finish college. As the President said, “… In this economy, there is no greater predictor of individual success than a good education.”

Fortunately, thanks to the President’s support for manufacturing and the auto industry, the Michigan economy is starting to recover, and I agree with the President that the United States has to continue to be a country where everybody has a chance to succeed, and affordable education is the key to that goal.

As a 2010 Classroom Teaching Ambassador Fellow with the Department of Education, I have experienced Secretary Duncan and President Obama’s commitment to having teachers at the table in policy discussions.  Through the fellowship, I have had unique opportunities to engage in meaningful conversations with diverse groups of educators and policy makers. These were all great experiences.  When I met President Obama after the speech, and he thanked me for my work, I was immensely grateful both for the chance of a lifetime and for an administration that clearly values teachers and education.

Tracey Van Dusen

Tracey Van Dusen is a 2010 Classroom Teaching Ambassador Fellow who teaches AP Government and American Studies at Pioneer High School in Ann Arbor, Michigan.

New Resources Announced for Public Service Loan Forgiveness (PSLF)

Martha Kanter and John Sarbanes

Martha Kanter joined Congressman John Sarbanes (D-Md.) at the University of Maryland Baltimore. Photo by Ed Fishel courtesy of UofM Baltimore.

Earlier today Under Secretary of Education Martha Kanter joined Congressman John Sarbanes (D-Md.) at the University of Maryland Baltimore to announce new efforts from the Department of Education to help public servants—including veterans, nurses, and teachers—take advantage of Public Service Loan Forgiveness (PSLF). Public Service Loan Forgiveness cancels the balance of a borrower’s federal student loan debt after they have served full time in a public service role for at least 10 years, while making on-time qualifying loan payments each month.

The new materials from ED include an employment certification form that allows borrowers to keep track of eligible employment and payments. This form will help those borrowers who have made a service commitment to this country while honoring their responsibility to repay their federal student loans and allow them to more easily receive loan forgiveness when they are able. In addition, these new materials will allow borrowers to find out now if their job and loan payments will qualify them for loan forgiveness in the future as well as how many payments they have left to make – information that is not currently available.

Public Service Loan Forgiveness was established through the bipartisan College Cost Reduction and Access Act of 2007, and applies to careers such as active-duty military officers and veterans, public school teachers, law enforcement officials, firefighters, and many nonprofit employees. Borrowers must make 120 monthly payments on their eligible federal student loans after Oct. 1, 2007, before they qualify for the loan forgiveness.

More details about the Public Service Loan Forgiveness program, including a detailed Q&A and copy of the form, can be found at: www.studentaid.ed.gov/publicservice.

Sara Gast is a Press Aide at the U.S. Department of Education

#AskFAFSA Office Hours with ED’s Martha Kanter

With many schools’ FAFSA deadlines quickly approaching, FAFSA season is heating up. Last night, Under Secretary of Education Martha Kanter took to Twitter to answer some pressing questions students & parents had about the Free Application for Federal Student Aid.

Using the hashtag #AskFAFSA, Martha answered more than 20 questions over the course of the hour. She addressed:

Who Gets Aid

Tax Questions

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An America Built to Last

Last night President Obama unveiled a new blueprint for an America Built to Last, that gives hard-working, responsible Americans a fair shot. Education plays a key role in the President’s Blueprint, and includes the following details:

    • Forge new partnerships between community colleges and businesses to train and place 2 million skilled workers.
    • Reform job training and Unemployment Insurance to help put more Americans back to work.
    • Keep students in high school by calling on every state to do what 20 states have already done: require students to stay in school until they graduate or turn 18.

Attract, prepare, support, and reward great teachers to help students learn:

The President is asking for a new competitive program that will challenge states and districts to work with their teachers and unions to transform the teaching profession by:

    • Reforming colleges of education and making these schools more selective;
    • Creating new career ladders for teachers to become more effective, and ensuring that earnings are tied more closely to performance;
    • Establishing more leadership roles and responsibilities for teachers in running schools; improving professional development and time for collaboration among teachers; and providing greater individual and collective autonomy in the classroom in exchange for greater accountability;
    • Creating evaluation systems based on multiple measures, rather than just test scores;
    • Re-shaping tenure to raise the bar, protect good teachers, and promote accountability.

Take steps to hold down college costs for middle-class families: 

The President called on Congress to help keep college costs within reach for middle-class families by:

    • Keeping tuition from spiraling too high: The President is proposing to shift some Federal aid away from colleges that don’t keep net tuition down and provide good value.
    • Preventing student loan interest rates from doubling: The President called on Congress to stop the interest rate on subsidized Stafford student loans from doubling on July 1 of this year, so young people don’t have as much debt to repay.
    • Doubling the number of work-study jobs: The President wants to reward students who are willing to work hard by doubling over five years the number of work-study jobs for college students who agree to work their way through school.
    • Permanently extending tuition tax breaks that provide up to $10,000 for four years of college: The President is proposing to make the American Opportunity Tax Credit permanent, maintaining a tax cut that provides up to $10,000 for tuition over four years of college.

Read the entire Blueprint for An America Built to Last (pdf).

Our Students Deserve No Less

(Official Department of Education Photo by Joshua Hoover)

“My chief message today is a sobering one,” said Secretary Duncan yesterday at the annual Federal Student Aid conference in Las Vegas, Nev. “I want to ask you, and the entire higher education community, to look ahead and start thinking more creatively—and with much greater urgency—about how to contain the spiraling costs of college and reduce the burden of student debt on our nation’s students.”

Duncan called for a national conversation on the issue, and noted that containing the cost of college and student debt will always be some of the most controversial and thankless work in all of higher education. He went on to explain that:

With higher productivity and better accountability, institutions of higher education can boost both quality and access and constrain costs, all at the same time. In the era of the knowledge economy, the urgency of controlling college costs is not at odds with the urgency of increasing college attainment. Both goals are necessary if society is to do all it can to help more Americans succeed and thrive in the global job market.

Duncan acknowledged that for too many students and families that the cost of college is a serious and growing problem. He pointed out the Obama Administration’s unprecedented commitment to helping students pay off their student debt, including the recently announced Pay As You Earn proposal to help make student loan debt more manageable. “All told, federal support for increased college access has expanded more in the last three years than at any period since the years following the passage of the GI bill,” the Secretary said.

To those in attendance at the conference, Secretary Duncan called for creativity and a commitment to help contain the growth of college costs and student debt. “Our students deserve no less,” he said.

Click here to read the entire speech.

Arne on the Income-Based Repayment Program and Community Colleges

Arne took time last week to answer a couple of questions he received on his Facebook page. Daniel had a question on the Income-Based Repayment (IBR) program and the President’s recent pay-as-you-earn proposal. Secretary Duncan encouraged Daniel and others with student loans to look at switching to the current IBR program. “Depending on your income, you could save literally hundreds of dollars every single month,” he said.
 
You can get an estimate of how much you could save by visiting our IBR page, and check out our IBR calculator that will give you an idea if IBR will lower your monthly payments.

Arne also responded to Lesley who left a great comment about her success as a community college student. Lesley, who now has her doctorate, talked about the power of education and how it can change lives.

“Community colleges, I continue to believe, have this ability to transform young people’s lives, adults’ lives, [and] older people’s lives in very profound ways,” Duncan said. He also highlighted the Obama Administration’s unprecedented commitment to community colleges, including the proposed American Jobs Act that would provide $5 billion for renovation and upgrades to community colleges across the country.

Watch the video:

Click here for an alternate version of the video with an accessible player.

We Can’t Wait to Help America’s Graduates

Cross-posted from the White House Blog.

In this globally competitive, knowledge-based economy, higher education has never been more important. Simply put, America cannot lead in the 21st century without the best educated, most competitive workforce in the world. Nations that out-educate us today will out-compete us tomorrow, which is why some form of higher education is an absolute must.

We also know that college costs have never been higher — or more difficult to manage. The Administration has already provided aid to millions of students with historic investments in programs like Pell Grants and the American Opportunity Tax Credit. But we realize that many borrowers are struggling to both pay off their loans and make ends meet every month. And fear of being saddled with debt in the long run may deter many potential students from enrolling in college. They need help now.

That’s why today, President Obama announced new efforts to make college more affordable by helping millions of borrowers better manage their federal student loan debt. We’re taking executive action with two measures that will bring relief to borrowers by lowering their monthly loan payments – at no cost to taxpayers.

First, for some students we are proposing to cap student loan repayment at 10 percent of a borrower’s discretionary income, starting next year. For many who worry about managing their debt while working in lower-paying fields — including teachers, nurses, public defenders, and social workers — this could reduce their payments by hundreds each month.

We also want to provide immediate relief to borrowers already repaying their loans. While the pay-as-you-earn proposal would only apply to some current students and recent graduates, millions more borrowers may already be eligible for our current income-based repayment plan, which caps payments at 15 percent of a borrower’s discretionary income. We know there are folks who are struggling in repayment now — and for them the current Income Based Repayment (IBR) plan may be a great option. To learn more about this plan to see if it makes sense for you, visit www.studentaid.ed.gov/ibr.

Second, beginning in January we will offer 6 million borrowers the chance to consolidate their loans and reduce their interest rates. Currently, these borrowers are repaying loans from two different programs, requiring them to submit separate payments and adding red tape that makes them more likely to default. Our special consolidation plan will allow these borrowers to make a single payment each month, with incentives to encourage on-time repayment. Borrowers who take advantage of this option will be eligible to receive a reduction in the interest rate on some of their loans by up to 0.5 percent, lowering their monthly payments and saving hundreds in interest. We will start reaching out to eligible borrowers in early 2012 to introduce them to this program.

In addition to these steps, the Consumer Financial Protection Bureau and the U.S. Department of Education have teamed up to launch a new Know Before You Owe project, and today they are releasing a Financial Aid Shopping Sheet — a draft model financial aid disclosure form. This form is a tool that colleges can use to help students better understand the type and amount of aid they qualify for, and will allow potential students to easily compare aid packages offered by different institutions.

The form will also make the total costs — and risks — of a student’s loans clear before enrollment, by outlining what a student’s monthly loan payment would be and providing an estimate of their total loan debt. Ultimately, this provides students and their families with useful information that can help them make a more informed decision about where to attend college and better understand the debt burden they may be left with.

These are changes that will make a big difference in the lives of college students and recent graduates entering one of the toughest job markets in recent memory. We’re helping provide them with key information on the front end, and we have a way to help them save money by consolidating their debt and capping their loan payments. And all of this will be done at no cost to taxpayers. This is not just a no-brainer – it’s the right thing to do.

Arne Duncan is the U.S. Secretary of Education and Melody Barnes is the Director of the White House Domestic Policy Council