Category Archives: Educational loans

Fun with Phone Scams

It seems that telephone scams are alive and well even in this digital age.  Several times a week I’ll get a phone call (on my cell phone) from a number I don’t recognize.  Sometimes I don’t answer.  Sometimes I do.

Recently I decided to answer one of these calls and ended up listening to a computer voice tell me that this was my last chance to save money on my student loans before certain federal programs end.  Since my student loans have been paid off for a very long time, and I also happen to know more than a little about federal student aid programs (such as that no federal student aid programs are currently scheduled to end), I decided that I would try to have a little fun.

The computer voice told me to press 5 if I knew my FSA ID or 8 if I needed help retrieving it.  So this was a cue to me that the mission of this scammer was likely to get my FSA ID and use that to retrieve other private information about me (like my Social Security number and birth date).  I pressed 5 and then was put on hold for a minute or so.  This seemed weird since I was on the receiving end of the phone call.  But I held.  I wanted to play.  Eventually I was greeted by someone who asked if I was having trouble making my student loan payments.  I said that no, that wasn’t really a problem, and then they promptly hung up.  But much to my delight, they called back just a few minutes later, so the game could continue.  I pressed 5 and waited my turn again.  And this time the voice on the other end asked me if I had student loans.  I said that I assumed they knew I did, since they had called me about this issue.  Again…a hang up.

The student loan people have not called me back since that day.  My game wasn’t much fun.  I’ve had financial aid administrator friends keeps folks like this on the line for up to half an hour.  My experience pales by comparison.  But the message was received.  Phone scammers are out there, disguised as student loan consolidators.  Beware if you get a call from these folks.  They are not trying to help you.  And if you do have questions or concerns about your student loans, your answers are best found with either your loan servicer or your friendly neighborhood Financial Aid Director in suite 105 of the Katz Building.  And never give out any personal information on a telephone call you did not initiate.

 

The Latest News from Capitol Hill for Law Students

 

While law students were hunkering down over the weekend studying for exams, the eyes of the rest of the country were on Washington, D.C..  Let me catch you up on the pertinent info for law students.

First, the Senate passed their version of tax reform.  There are several differences between the House and Senate tax bills, so now both chambers need to sit down and hammer out the differences to decide what the final version (which will then go to the President for approval) will look like.  Without getting political or partisan, the most pertinent issue for law students is the elimination of the above the line deduction for student loan interest.  For several years student loan borrowers have been able to deduct up to $2,500 per year in student loan interest paid, without having to itemize deductions.  This deduction is wiped away in both the House and Senate versions, so it’s pretty safe to say this one is going to be gone.  The next most pertinent thing is the education tax credits.  Law students are able to take up to $2,000 a year from the Lifetime Learning tax credit for tuition and fees paid.  The House bill eliminates this credit, but the Senate bill does not.  So we’ll have to wait and see how that one plays out.  And finally there is the taxability of tuition waivers, which is less pertinent to law students, but a very big deal to many other graduate programs.  The House bill proposes that tuition waivers (such as those offered to grad students with assistantships) will count as taxable income.  This is also not in the Senate version, so I am hopeful that grad students throughout the country will be spared this burden.  (But don’t worry about scholarship and grant funds—these are taxed differently than waivers and will not be affected.)

Meanwhile, while the Senate was talking tax reform, the House introduced a bill specifically for higher education student aid reauthorization.  And it scares me.  There are a few things I like about the bill.  For starters, it would do away with student loan origination fees.  And it would also provide for more intensive student loan counseling.  But that’s pretty much where my happiness ends.  Here are some of the proposed changes that could affect future law students:

  • Graduate student annual federal loan limit of $28,500
  • Aggregate grad federal student loan limit of $150,000
  • The multitude of income driven payment options that we have now replaced by only one plan that would not allow for forgiveness after a certain number of years (only after the full amount of principal and interest is repaid in full).
  • The end of Public Service Loan Forgiveness
  • No more work study for graduate students

This bill is, of course, just the starting point.  The House will be talking about it and marking it up more in the coming weeks.  And then the Senate has to come up with their version, and then the whole reconciliation of the two different bills has to happen.  So it’s likely that this will not all come to pass…this is the lowball offer that we’re starting with, so there will be plenty of room for negotiation going forward.

Now is the time when the constituents come into play.  If you have an opinion on any of this proposed legislation, you have the right (and duty) as an American to make your Representatives and Senators hear your voice.

It’s been a busy few days in D.C..  And it definitely looks like lots of interesting (and sort of scary) stuff is coming down the pipeline.  Feel free to reach out if you would like to discuss any of it with me.

And good luck on exams!

What I Learned in Washington

DC

I was lucky enough to go on a true adventure last week.  I accompanied a group representing the Pennsylvania Association of Student Financial Aid Administrators to Washington, DC to talk with various groups about issues of concern to the financial aid community.  We met with staff from several Pennsylvania Representatives, and also met in person with Representatives Charles Dent and Glenn Thompson. In addition to these meetings, we also met with staff from the House Committee on Education and the Workforce, the Senate Committee on Health, Education, Labor, and Pensions, as well as a representative from the Consumer Financial Protection Bureau.  These last three I mentioned were perhaps the most valuable meetings, as they had as many questions for us as we had for them.  Talking with the people in the trenches, dealing with real students, is quite valuable for these folks and they were happy to pick our brains a bit.

While the other aid administrators in my group were focused on things like Pell grants, my focus was strictly on the income-driven loan repayment plans and the federal Public Service Loan Forgiveness (PSLF) plan. The Pay as You Earn (PAYE) loan repayment option and the PSLF plan have been under the microscope a bit too much for my comfort lately.  These programs have been tagged by both sides of the political fence as being unsustainably expensive…though there is no real proof that that is the case.  President Obama’s most recent budget proposal called for capping the amount forgivable under PSLF at $57,500, as well as increasing the number of years required for non-public service loan forgiveness under PAYE from 20 to 25.  A recent Senate tax reform proposal called for making amounts forgiven under PSLF taxable.  Assorted other changes have been tossed around as well.  Thankfully every one of these proposals has been tied to legislation that is doomed not to move forward.  But once something is placed on “the list” of things that can be looked to for budget cuts, it is in danger of change.  It was my mission in DC to remind the decision makers that these programs were created in order to make it possible for student loan borrowers to be able to afford to choose a career in public service work.  I sat in various offices on Capitol Hill and explained how important it is for students to be able to choose their loan repayment option based on their chosen career path, rather than letting their amount of student loan debt choose the path of their career.

The reactions I received were a pleasant surprise.  I did not encounter anyone who wants PSLF to be taken away.  And of the eight Representatives’ staffs we met with, only Rep. Dent expressed strong feelings about wanting to make changes to the PSLF program.  I find this encouraging for the future of this program.  Maintaining the PSLF program protects career choice for prosecutors, public defenders, government workers, and public interest attorneys.  The other positive response was in regard to grandfathering existing borrowers if future changes to these programs should come.  The general consensus on the Hill is that if changes do happen to these programs in the future, those who have already borrowed student loans relying on the existence of these programs should not be subject to any changes—the changes should start with new borrowers as of a certain future date.

It was a whirlwind tour of Capitol Hill.  And I don’t know if I made any difference at all.  But I definitely feel a bit better knowing that I gave it a good effort.  And I definitely feel a bit more confident about the future of these federal student loan programs that I care about.  Change may come.  But I’m feeling like my current students and alumni are going to come out just fine.