Monthly Archives: March 2017

Fee Increase for Struggling Student Loan Borrowers

The Education Department has reversed an Obama administration rule that limited fees that guaranty companies could charge distressed borrowers. The new rule allows guaranty companies to charge borrowers 16% of their loan balance, even if they agree within 60 days to make good on their debt. This article on Bloomberg details the rule change and its impacts. You can read the Education Department memorandum on the change here. Guaranty agencies are state or private agencies that administer the federal student loan program. In addition to insuring lenders against default and paying them off when loans default, they also play a collections role with debtors.

Tax Season Tip: Income

Since taxes seem to be top-of-mind for everyone, here’s a quick tip for bringing your income down on the FAFSA or CSS PROFILE: Don’t get a state tax refund. If you do, you have to report it as income. Check with your tax preparer to determine the right amount of state withholding that avoids both a refund and a penalty for underpayment. If you use tax software like TurboTax, it can calculate correct state withholding as well.