March 21, 2018

Family Charged With Student Loan Scam

“A trio of siblings from Savannah, Georgia – Makara Pringle, Michael Pringle and Renada Pringle Givens – have been indicted by a federal grand jury in a student loan scam with charges of financial aid fraud and conspiracy.

The siblings submitted applications for Pell Grants and Free Application for Federal Student Aid loans (FAFSA) and allegedly used the money primarily on personal items not for tuition at a college as is intended by the U.S. Department of Education programs.

The trio, who do not hold high diplomas or GEDs, allegedly carried out their fraud over a period of three years, beginning in 2007 and lasting until 2010, and received more than $40,000 in federal money in that time period.

Two of the three siblings were enrolled at University of Phoenix and appear to have used their enrollment as part of their scheme, receiving refund checks drawn on the accounts of the school, the indictment charges.

The trio is facing serious jail time as each crime carries a maximum five-year jail sentence and a $250,000 fine.”

Savannah Morning News

Federal Student Aid – U.S. Department of Education

Sallie Mae to Offer Tuition Insurance and Student Health Insurance

“Before today, investing your money in the education of yourself or your children was a choice that had to be made outright, without little insurance or security provided that would cover student loans and other necessary expenditures of college students. On July 11, 2011, the nations leading insurance company that focuses on education, Sallie Mae, announced an entirely new insurance portfolio that will help families protect the investments they make in higher education. Entitled Sallie Mae Insurance Services, this new insurance company that will be focused entirely on providing insurance for college students in America.

“”Since its founding nearly 40 years ago, Sallie Mae has helped more than 31 million people pursue their education dreams,”" said president and chief operating officer of Sallie Mae, Jack Remondi. “”These new insurance products will help students and families protect their investment in higher education.”"

In partnership and conjunction with Next Generation Insurance LLC, Sallie Mae Insurance Services plans to be the first insurance agency to truly provide complete protection for the investments that are included in paying for a college education. The Next Generation Insurance Group, in cooperation with Sallie Mae, will be licensed in all 50 states and will provide personalized insurance portfolios to the 23 million students who act as customers to Sallie Mae.

The already popular Upromise program currently offered by Sallie Mae has helped to raise $600 million towards college payments for students, and the company manages or services a whopping $238 billion in education loans and $37 billion in college savings plans. The amount that Sallie Mae already administers in collegiate insurance services is huge, and placing these new insurance portfolios on the market will only increase those numbers, making this new business move quite a hot topic for the investor crowd.

Some of the changes that Sallie Mae has put into action today includes direct tuition insurance packages to American college students, student health insurance, and renters insurance to protect the monthly expenses on living. Sallie Mae will also be offering complete offers that will provide all of the above mentioned services, as well as identify theft protection and other insurance policies designed to protect all types of investments made into greater education.”


Sallie Mae launches insurance services designed to help college students protect their investment in education

Sallie Mae launches insurance services designed to help college students

Sallie Mae Now Offers Insurance Products For Student Loans

Sallie Mae Launches Insurance Services Designed to Help College Students Protect Their Investment in Education

Fixed Rate Private Student Loans

“Wells Fargo and US Bank have announced that they will offer fixed rate student loans in addition to the variable rate which is currently the norm.

Fixed Rate Private Student Loans

This has been met with different reactions. On one hand, people who want the stability of a fixed rate loan now have that, and those who are prepared to take a chance that interest rates won’t rise can go that route, and this has been received positively by some. On the other, there is still the argument that these kind of loans shouldn’t even be necessary, if the federal government was prepared to offer more than the current $31,000 it currently offers to undergraduates.

Until recently, federal loans were available from a bank at a variable rate. They are now fixed with a rate as low as 3.4%, borrowed directly from the government. Unfortunately, these loans fall short of what it actually costs to go to school, even taking into account scholarships and grants.

Private student loans are taken out to make up the difference, but by the time a student has reached their bachelor’s degree, their debts can be enormous. The government has a program which offers lower loan payments for those with limited income, and loan forgiveness for those in public service jobs, but the banks do not.

These private ‘student’ loans are not in fact taken out solely by the student. Most teenagers, due to their limited credit history will require a co-signer. This is normally a parent. If the student fails to make timely payments, this can result on a negative reflection on the credit history of both the student and the parent.

The new fixed-rate family loans offered by Wells Fargo and US Bank have a length of 15 years. US Bank’s interest rate is 7.8%, but taking into account upfront fees the rate can rise as high as 8.46%. Wells Fargo charges nothing up front in terms of origination fees, and the rate is as low as 7.29% – lower if you are a current Wells Fargo customer. This depends on your credit rating, and it could rise to as much as 14.21% if you enroll in community college or trade school.

In contrast, the variable rates offered are between 3.39 and 10.22% at US Bank, and 3.4 and 11.74% at Wells Fargo. Why would someone choose the fixed rate, given the fact that interest rates don’t look to be rising any time soon?

Lucille Conley, senior vice president of consumer lending at US Bank said “”We think that students and parents are looking for some kind of certainty in the long run. They’ve seen things happen in the housing market that may cause them more concern that they might have had four or five years ago.”"

These loans appear to be geared towards people who are comfortable knowing that their payment will never change. Even though Well’s Fargo didn’t expect much interest in the fixed-rate loan, quite a few families have taken this option.

It should be noted that when you borrow money for college, stay away from a private loan until you have used the entire $31,000 loan offered by the government. Normally, a student can borrow $5,500 in the first year, $6,500 in the second year, and $7,500 for each additional year until they reach the $31,000. cap.

Zac Bissonnette, who is the author of “”Debt-FreeU”" suggests that people who find themselves reaching the federal loan limit may be getting in over their heads. Conversely, Joseph DePaulo, executive vice president of Sallie May, the largest education lender, thinks it depends on someone’s comfort level, relative to their goals and means when it comes to their future.

Offering a middle ground is Mark Kantrowitz, owner of Consider what your annual salary will be when you graduate, and don’t borrow more than that. Also take into account that you may change your mind about your career a number of times while in college.

This issue could be resolved if the government increased their loan amount above $31,000, but in the meantime, students will have to borrow the money where they can.”

More information:

Fixed-Rate Private Student Loans Are Still Risky