Helping people understand student loans is our job at SALT™, and few are better at it than Betsy Mayotte—the director of regulatory compliance for American Student Assistance® (our parent company). We told borrowers to “Just Ask” her questions, so check out her answers below (as well as her cat—because if Piglet can’t make student loans better, what can?).
Private Student Loan Reform?
Is there anything new on legislation to reform private student loans and create programs similar to what is available for federal student loans? Any hope on the horizon?
There have been numerous discussions on reforming the law to allow lower payment options and other types of relief for private loan borrowers, but I haven’t seen any actual bills being offered that would do this. I know the Consumer Financial Protection Bureau has been working with Congress and the lenders on what such programs would look like, but again, nothing has been offered as of yet. I would say there is hope for sure, as this is a recognized issue. However, how soon that relief arrives remains to be seen.
I’d suggest you write your Congressional representative to encourage them to devote some attention to this issue. The more they hear from consumers as to the problems they face with their private student loans, the more likely they are to take action.
Hello, I am currently in grad school, and the federal student PLUS loan is not enough to supplement. What other loan options can I have besides private loans. For private loans, which loans are recommended?
I’m a little confused by your question, as the PLUS loan covers the cost of education (which includes living expenses) minus other student aid—so you should have enough available to meet your needs.
If your expenses are beyond what the school allows, you may want to see if there are way to cut those expenses and minimize the debt you are accumulating. You could also approach the financial aid office and ask for an increase in your cost of attendance and, therefore, an increase in your PLUS loan if you feel your expenses are reasonable or if there has been an emergency expense.
There are only three types of student loans: federal, state and private. You have likely exhausted the federal and state, and I’m afraid that I cannot recommend one private lender over another. Your school, however, may have a list of recommended lenders—although you should still make sure you do your own research before signing the dotted line.
It may be a good idea to see what you can expect in student loan payments now based on your current debt level. You can do so here.
Please let me know if you have additional questions.
Have a student loan question you need an answer to? Just Ask.
(Note: The questions and answers above are real; however, they have been edited for grammar and clarity, but not by Piglet.)