Congress to Extend Low College Loan Rate, Responding to Students; Student Loan Interest Rates Will Not Double On July 1

Statement of Rich Williams, U.S. PIRG Higher Education Advocate, on the House’s passage of bipartisan legislation to prevent subsidized Stafford student loan interest rates from doubling:

“Congress listened to students and their families and delivered a bill that stops student loan interest rates from doubling. Students already face unprecedented student loan debt and adding an additional $1,000 more would not only crunch individual borrowers, but would have further weighed down the recovering economy. We applaud Congress for coming together to pass this much-needed legislation.

“Without Congressional action, the interest rate would have doubled from 3.4% to 6.8% on July 1^st.  An interest rate increase would result in additional debt over the life of the loan for 7.5 million low and moderate-income students who borrow new federally subsidized Stafford loans next year.

“Three months ago observers couldn’t predict whether Congress, mired down by partisanship and focused on the November election, would act on this critical issue.  Yet a wave of student and borrower mobilization changed the political calculus, confirming that college affordability is a key concern for young people, their families, and anyone who cares about the U.S. having a high-skill, competitive economy.  Today’s victory is another important step in getting rising student loan debt under control. When Congress considers further action to decrease student loan debt, they’ll know that students are paying close attention. 

“Students and borrowers saddled with debt all across the country made their voices heard.  In March, dozens of students gathered in front of the Capitol to deliver over 130,000 letters telling Congress Don’t Double My Rate!  In May and June, students lobbied their lawmakers and participated in media events to amplify their voices.  Student body presidents across the country rallied their campuses, with 275 presidents writing letters to their lawmakers and newspapers demanding action to extend the current low rate.  

“Widespread action across the country continues to show Americans strongly support making college affordable.  A large coalition of student, youth, consumer, parent, higher education and religious groups organized dozens of on-the-ground events in districts and mobilized hundreds of thousands of citizens to call or write their lawmakers.

“The House of Representatives passed legislation on Friday with a strong bi-partisan vote of 373-52 and the Senate is expected to adopt the measure on Friday.  The student loan provisions were included in H.R. 4348, which included a package of issues including the 2-year reauthorization of the transportation bill."

#Dontdoublemyrates: 8 Days Until Student Loan Interest Rates Double. What Can You Do to Help?

The clock is ticking. On July 1, interest rates on federally backed student loans are set to DOUBLE for more than 7 million college students already struggling to afford the higher education they need. Join us in asking Congress to do the right thing for our economy and for the millions of hard-working students trying to learn their way into the middle class.


Below you will find a series of tweets, a sample facebook post, contact info for your members of Congress and a petition to sign to let Congress know that it is unacceptable to double student loan interest rates. 










Sample tweets:

• #Dontdoublemyrate on July 1! Affording college is already hard enough: tuition and fees are skyrocketing, up 538% since the 80s http://on.fb.me/KaN5Ev
• Faced with July 1 deadline, Congress refuses to hear each other out on student loan interest rates. http://tnne.ws/MEG9fF #dontdoublemyrate
• Interest rates on student loans will DOUBLE on July 1 unless Congress acts. RT this infographic to spread the word: http://on.fb.me/KZb365
• College student: Politics shouldn’t take priority over hard-working students like me. http://bit.ly/KqPVYt #dontdoublemyrate
• Act now! If Congress continues to stall, federal student loan interest rates will double on July 1. Sign the petition & RT http://chn.ge/LkV0y1

Sample Facebook post:

• The clock is ticking. On July 1, interest rates on federally backed student loans are set to DOUBLE for more than 7 million college students already struggling to afford the higher education they need. Join us in asking Congress to do the right thing for our economy and for the millions of hard-working students trying to learn their way into the middle class.
• Link: http://chn.ge/LkV0y1

Link to the petition:

• http://www.change.org/petitions/tell-congress-act-before-july-1st-don-t-let-student-loan-interest-rates-double

Minnesota Members of Congress

• Sen. Amy Klobuchar 
• Sen. Al Franken
• Rep. Tim Walz (WSU and MSU-Mankato)
• Rep. John Kline
• Rep. Erik Paulsen (Metro State West Suburbs Campus)
• Rep. Betty McCollum (Metro State Main Campus)
• Rep. Keith Ellison (Metro State Minneapolis Campus)
• Rep. Michele Bachmann (St. Cloud State)
• Rep. Collin Peterson (SMSU, BSU, MSU-Moorhead)
• Rep. Chip Cravaack

Find out who represents you here.

Understanding the True Cost of College Act introduced by MN Sen. Al Franken

MSUSA Student leaders meet with Sen. Franken about the True Cost of College Act.

U.S. Sen. Al Franken (D-Minn.) said families and students will gain a more accurate picture of exactly how much college will cost them before deciding which school to attend under bipartisan legislation he authored and introduced. Sens. Tom Harkin (D-Iowa), Chuck Grassley (R-Iowa), Richard Blumenthal (D-Conn.), Chuck Schumer (D-N.Y.), Barbara Mikulski (D-Md.), Tim Johnson (D-S. Dak.), Ron Wyden (D-Ore.), and Ben Cardin (D-Md.) joined as original cosponsors.

The "Understanding the True Cost of College Act" would:

• Require institutions of higher education to use a uniform financial aid award letter.
• Call on the Department of Education to work with colleges, consumer groups, students, and school guidance counselors to develop standard definitions of various financial aid terms for use in the uniform financial aid award letters.
• Establish basic minimums of information that must be included in the uniform financial aid award letters, such as: cost of attendance; grant aid; the net amount a student is responsible for paying after subtracting grant aid; work study assistance; eligible amounts of federal student loans; expected federal loan monthly repayment amounts; and disclosures including disclosures related to private loans, treatment of scholarships, and the terms and conditions of federal financial aid. 
• Require the Department of Education to establish a process to consumer test the uniform financial aid award letter and use the results from the consumer testing in the final development of the uniform financial aid award letter. 

In Minnesota, Sen. Franken’s bill is supported by the University of Minnesota, the Minnesota State University Student Association, the Minnesota State College Student Association, and the Minnesota College Access Network. Nationally, the bill is supported by the American Federation of Teachers-AFL-CIO, the National Consumers League, Campus Progress Action, the Institute for College Access and Success, Education Trust, and the National College Access Network.

Sen. Franken’s "Understanding the True Cost of College Act," would create a universal financial aid award letter so that students can easily compare financial-aid packages between schools.  It would clarify what financial aid families will receive from a school and create standard terms for the aid offered so that students can accurately compare offers from different schools. Right now, schools do not use standard definitions or names for different types of aid, so students and families often report having difficulty figuring out the differences between grant aid—which does not need to be repaid—and student loans, which do need to be repaid.

“The amount of debt students in Minnesota graduate with has skyrocketed, and part of the problem is that students often don’t have a clear picture of how much their education is going to actually cost them,” said Sen. Franken. “My legislation will require schools to use a universal financial aid letter so students and their families will know exactly how much college will cost, and will help them compare apples to apples when deciding what school a student will attend.”

“This commonsense legislation helps empower students and families with necessary information to make an informed choice about college,” said Sen. Harkin.  “Faced with soaring tuition and mounting debt, students lack the consistent, clear and useful financial aid information they need to compare their options and make the decision that is right for them.  As Congress grapples with the pressing and complex issue of college affordability, this bipartisan legislation addresses a key piece of the puzzle and will help millions navigate the maze of financial aid information thrown their way through a standardized, comprehensive, consumer-friendly form.  This is not about more information, but about the right information that students need when making such an important decision about their future.”

“I am proud to help lead the Understanding the True Cost of College Act, which would mandate fairer and more accurate disclosure in financial aid offers to students,” said Sen. Blumenthal. “It would provide for clearer terminology and definitions colleges use in their financial aid letters. Students would better understand the differences in the financial aid packages they receive from each institution, and make more informed decisions in choosing college.”

“College affordability must be a top priority for the federal government so that millions of students and future students at America’s colleges and universities can graduate with a diploma and not a pile of debt,” said Sen. Schumer. “I am proud to have partnered with Senator Franken to create a requirement that all higher education programs inform consumers about their financial aid options in a uniform manner, which allows them to make apples-to-apples comparisons when considering a college’s price tag. This proposal will help ensure that students receive a top-notch education that is as affordable for families and students as possible.”

“This initiative will empower students and parents with the information they need to make the best financial decision for their families and to avoid taking on more debt than they will be able to repay,” said Sen. Grassley. “This is one way to address the problem of student debt on the front end rather than after the fact.  Also, the more we can help students and parents become savvy shoppers, the more colleges will be forced to rein in rising costs to compete for students.”

“I believe in America’s opportunity ladder, and higher education is an important rung on that ladder,” said Sen. Mikulski. “This legislation will help families who are stressed and stretched to make an informed financial decision by requiring all colleges to provide basic information on the costs of enrolling at the school of their choice. Higher education is part of the American dream – it shouldn’t be a financial nightmare.”

“Not all student aid is created equal and students deserve to know exactly what kind of debt they are taking on and how much they will have to pay back,” said Sen. Wyden. “Student aid packages vary from school to school and are often difficult to compare with each other. The difference between a $20,000 grant and a $20,000 high interest loan can mean the difference between an affordable and an unaffordable education for many students, yet often times this distinction may not be readily apparent. Students deserve to know as simply and clearly as possible what they are taking on and the choices they have.”

“Students today have enough obstacles keeping them from a quality education, deciphering the paperwork shouldn’t be one of them.  We need to make it easier to understand the options for financial aid and exactly what the full cost will be,” said Sen. Cardin. “I am proud to be a cosponsor of legislation that requires uniform, consumer-tested financial aid award letters with standard definitions.  This will go a long way toward helping students fully understand their funding options and commitments.”  

MSUSA June 2012 Washington DC Lobbying Trip

From June 4-7 MSUSA flew three of it's student leaders to Washington DC to lobby on behalf of the 75,000 MN state university students. Below you will find descriptions of the experience from the perspectives of our State Chair Moriah Miles, and board members Kyle Berndt and Russel Ferguson.

Moriah Miles -- MSUSA State Chair

This past week held many firsts for me. It was my first time being down in D.C.. It was my first time lobbying at the federal level. It also was my first week as State Chair of MSUSA. Overall, I think all of these “firsts” add up to one phenomenal first week! D.C. was much different than I expected for several reasons. The first being everyone in all the offices we visited were very nice! For some reason I expected everyone to be so busy getting work done that bothering them with our issues might test some peoples patience. Turns out if you take the time to make an appointment they ensure a reasonable amount of time to sit down and listen to the issues you want to speak with them about. Another part of D.C. that was interesting to me was the sheer amount of people that were down there doing the exact same thing we were. I noticed various causes make their rounds in all the buildings and it reminded me of how vast the issues our Congressmen and women have to pay attention to and work on. One of the last things that I found interesting about Washington was actually how our Senators interacted with their constituents. Senator Franken and Senator Klobuchar both held breakfast events to meet with anyone from Minnesota that wanted to talk to them. The Senators hold these events once a week while in session. I found this interesting because of the amount of time both their offices must take each week to put into these events.

Although the entire trip was very educational and the whole delegation really made progress in getting our issues out to our representatives there was one meeting that in my mind stands above the rest. This was actually a meeting that we luckily had time for and that was with Rich from USPirg. I had only briefly heard of USPirg before the trip down to D.C. and I had never heard of Rich before. However, in every meeting we were in previous to our dinner with Rich we would consistently hear from staff in the offices we were lobbying, “Oh yes, Rich from USPirg.” Almost every time we mentioned we were meeting with him about our issues the staff would know exactly who we were talking about! Therefore, by the time Wednesday night rolled around I was ready to find out, since the rest of the hill already knew who he was, who exactly Rich from USPirg was! It turns out Rich is also very nice but additionally he is passionate about higher education. Hearing about his background and where he is today was inspiring. For those of you in the world of higher education and to all the student leaders on campuses please take the time to see what USPirg does for higher ed. Also, if you’re ever down in D.C. and want a little charisma added back into your day try and schedule a meeting with Rich.  Our meeting with him was a reminder that the issues we have and will tirelessly work for are also deeply supported by phenomenal individuals around the United States like Rich.

Our trip down to D.C. was very successful. We met with the entire Minnesota delegation and were able to talk about all our issues. I think Kyle, Russel and I learned more about the issues we’re working on as well as picked up a few new issues. I look forward to the next MSUSA federal lobby trip and hope as the year moves along we continue to progress in our work for the 75,000 students of the Minnesota State University Student Association.

Kyle Berndt -- SMSU Student Association President, MSUSA Board Member

 One week ago I left for Washington D.C. to advocate on behalf of students of the MnSCU 4 year State University system. This was only the second time I had been to D.C. so it was still a very new experience for me. Lobbying, or advocating, is a very time consuming process but thanks to the great staff at MSUSA, Jon Bohn specifically, it was very easy as he set up meetings as well as coached us on the talking points for the meetings. During our time in D.C. we met with Legislative Assistants and other staffers to voice the concerns of students. We also met 7 of the 10 delegation from Minnesota and had pictures taken. The most open to talk to us was Rep. Craavack who spent 15 minutes listening to our concerns while voicing some of his own. There were three issues that we were communicating while in D.C. as follows: 1. Increase in the Stafford Loan Rate from 3.4% to 6.8%. 2. The new development of bank firms, such as Higher One, that are currently taking advantage of students and should be in some way regulated to protect students from incredibly high fees. 3. To support the True Cost of College Act which would simplify and standardize the Financial Award Letter students receive from school to be better prepared for the amount of money they will spend. While in D.C. we also met with Rich a staffer for USPirg. USPirg is a well respected student advocacy group. Rich has a great grasp on what is happening around the country and communicated that very effectively. USPirg is doing some great studies that are creating a buzz in regards to the voice of students’ in the United States.

This experience of going to Washington D.C. is one that I will not forget. I was able to meet many of the politicians from Minnesota and voice the opinion of students as well as see D.C. politics in a way I hadn’t before. I only wish that this trip would have lasted longer as the experiences that I had were spectacular. Regrettably I was unable to sightsee as much as the regular tourist would. We had long days and by the end of the day I was looking forward to getting a good nights rest to be ready to do it again the next day.

Russel Ferguson -- MSU-Moorhead Student President, MSUSA President

When I was first invited to travel to Washington D.C. I was excited but nervous. Jon was great in settling my nerves by communicating well throughout the experience. Despite the initial scramble to figure out transportation, the trip went very well.

A daily recap of the trip from my perspective would go like this: On Monday we all met up and flew to our destination. Everything went smoothly. We arrived at 7pm and briefly went over our agenda. Tuesday morning we ate breakfast together and discussed the details of our talking points. We then met with the staff of some of the congressmen that represent Minnesota. They were all excited to listen to what we had to say, but offered little information themselves. After meeting with the staff and running around capitol hill, all of us were pretty tired, so we had some downtime before going out for dinner.  After dinner the night was left open for us to do whatever we wanted. Wednesday was very similar to Tuesday. We spoke with the staff of various congress members who represented Minnesota. The most helpful person we met on Capitol Hill was a committee member of the education board. She was well informed about all our talking points and provided additional updates on those issues. Meeting with her earlier on the trip would have helped with our discussions with other staff. That night we ate dinner with another lobbyist. He was also very informed about our talking points and offered many suggestions to strengthen our discussions. It was nice having the personal experience of dining out with a fellow lobbyist. Due to the additional information, Thursday was probably the smoothest day for lobbying. We then flew home and arrived safely.

REPORT: AFFORDABLE HIGHER EDUCATION CONSUMER PROTECTION REINING IN WALL STREET

A report from u.s. pirg

see original blog post here

REPORT: AFFORDABLE HIGHER EDUCATION CONSUMER PROTECTION REINING IN WALL STREET

THE CAMPUS DEBIT CARD TRAP

Are Bank Partnerships Fair To Students?

RELEASED BY: U.S. PIRG EDUCATION FUND 

RELEASE DATE: WEDNESDAY, MAY 30, 2012 

> READ NEWS RELEASe

> DOWNLOAD REPORT (PDF)

Banks and other financial firms are taking advantage of a variety of opportunities to form partnerships with colleges and universities to produce campus student ID cards and to offer student aid disbursements on debit or prepaid cards. In addition to on-campus services, such as student ID functions offered on the card, some cards offer traditional debit card services linked to bank accounts; other cards provide additional reloadable prepaid card functions. The disbursement of financial aid and university refunds is the most significant partnership identified.

While schools are obtaining revenues and reducing costs by outsourcing certain services, the relationships between schools and financial institutions have raised questions because students end up bearing some costs directly – including per-swipe fees, inactivity fees, overdraft fees and more. Other issues include the effect of aggressive marketing strategies by partnering companies on student choice and weaker consumer protections on certain cards that hold student aid funds.

For example, students are not necessarily making their financial choices freely. When the college has selected a student ID vendor that “incidentally” offers additional banking services on the college-mascot-embellished card, the student’s choices are limited and the student is under the presumption that the college endorses the provider.

Inquiries into the privatization of government benefits through the use of prepaid cards in other sectors, such as state unemployment benefits, have suggested that transparency of terms and fees, as well as contracts, leads to governments making better deals, with fewer fees, for their clients. 

This U.S PIRG Education Fund report is an overview of the campus card marketplace and includes a survey of campus cards at the 50 largest public universities, 50 largest community colleges, and 20 largest private universities by campus population. It recommends best practices by colleges and banks and new protections for consumers, and provides tips for students. Greater transparency will help make the market work better.

KEY FINDINGS:

-  U.S. PIRG has identified almost 900 card partnerships between colleges and banks or other financial firms at schools with over 9 million students, or over 2 in 5 (42%) of all students nationwide.

-  Industry leading banks and financial firms tout that upwards of 70%-80% of students use their cards after a few years of marketing.

-  U.S. PIRG has identified that 32 of the 50 largest public 4-year universities, 26 of the largest 50 community colleges, and 6 of the largest 20 private not-for-profit schools had debit or prepaid card contracts with a bank or a financial firm.

-  Of banks, US Bank had the most card agreements, at 52 campuses with over 1.7 million students. Wells Fargo had card agreements at schools with the most students; its contracts were at 43 campuses that have over 2 million students.

-  The largest financial firm player, Higher One, has card agreements with 520 campuses that enroll over 4.3 million students.

-  Although contracts are hard to obtain, revenues to schools can be substantial. A new contract between Ohio State University and Huntington Bank includes $25 million in payments to the school over 15 years. It also includes an additional $100 million in lending and investment to neighborhoods surrounding campus.

-  Fees can be steep and frequent for students using the university-adopted cards, including a variety of per-swipe fees, inactivity fees, overdraft fees, ATM fees and fees to reload prepaid cards.

-  At least one fee listed on Higher One’s fee schedule would violate U.S. Department of Education rules if charged, other fees may violate other rules.

-  Potentially aggressive marketing tactics can make students captive customers.

-  Access to student financial aid funds placed on debit cards can be subject to limited availability of “convenient” fee-free ATMs for student loan withdrawals despite U.S. of Education rules. Students end up paying fees to access their aid.

-  Debit card contracts have been controversial at some campuses.

-  Some practices, such as outsourcing of student ID functions and pre-loading of disbursement cards, raise privacy issues.