Refinance graduate student loans

A Diminished Market, But Still Functioning in More Limited WaysThe IRS issued Notice 2015-78 [link] (“2015 Student Loan Notice” or “Notice”) on November 13, 2015.  To some, it was unclear why the IRS would bother issuing any guidance for a narrow type of tax-exempt bond that is issued in a vastly diminished volume as a result of changes in federal higher education laws.  However, the perceived need for this Notice may have originated, at least in part, in Private Letter Ruling 201447023 (“2014 PLR”), discussed in this blog last year [link] (“2014 PLR Blog”).A Very Abbreviated and Oversimplified History of Student Loan Bonds.  The Higher Education Act of 1965 [link] (“Higher Ed Act”) created a federal student loan program that lasted for 45 years.  Prior to the passage of the Higher Ed Act, student loans were made directly by the federal government.  Under the Higher Ed Act, loans to students were made … [Read more...] about Qualified Student Loan Bonds

The Illinois House of Representatives and Senate have voted to override the veto by the state’s Republican governor of Senate Bill 1351, known as the Illinois Student Loan Servicing Rights Act.  The override means that the new law will become effective on December 31, 2018.  The bill was drafted by the office of Lisa Madigan, the Democratic Illinois Attorney General, and had strong Democratic support in the state’s House and Senate.The Act includes the following key provisions:Licensing. The Act makes it unlawful “for any person to operate as a student loan servicer in Illinois except as authorized by this Act and without first having obtained a license in accordance with this Act.”   For purposes of the Act,  a “student loan” includes federal and private student loans, including loans to refinance a student loan.  The Act contains exclusions for various types of entities, such as federal- or state-chartered banks, … [Read more...] about Illinois lawmakers override governor’s veto of student loan servicing bill

On November 13, the IRS issued Notice 2015-78, providing favorable guidance on topics of interest to providers of “supplemental” or “alternative” student loans financed with tax-exempt bonds and to underwriters of such student loan bonds. Such guidance confirms that loans financeable under such programs include (i) parent loans as well as student loans and (ii) loans that refinance or consolidate prior loans that were or could have been financed on a tax-exempt basis.Tax-exempt bonds used to finance student loans, so-called “qualified student loan bonds,” come in two flavors under the Internal Revenue Code, those issued to finance federally-guaranteed loans made under the Federal Family Education Loan Program (“FFELP”) and those issued to finance certain loans issued under programs created by the states, generally known as “supplemental” or “alternative” loan programs. While the FFELP program, historically much … [Read more...] about Helpful News from IRS on Student Loan Bonds

A provision in President Barack Obama’s proposed budget for fiscal year 2015 calls for reducing the amount of federal student loans that could be discharged under the Public Service Loan Forgiveness Program. But the ABA is marshaling its advocacy resources to oppose legislation that would implement the administration’s proposal.In resisting Obama’s proposal, the ABA is seeking to preserve a program that it played a key role in helping to create in 2007. The Public Service Loan Forgiveness Program discharges a portion of federal student loan debt for individuals who commit to at least 10 years of public service work, including employment by government and nonprofit charitable organizations.The program, in conjunction with two other federal initiatives—Income-Based Repayment and Pay as You Earn—allows eligible borrowers to repay loans at an affordable percentage of their income, and discharges any remaining balance upon completion of 120 monthly payments. … [Read more...] about ABA opposes limiting how much student loan debt may be discharged under federal program

Not many first-year associates would have the courage to march up to their firm’s chief operating officer and boldly ask for help with their student loans.Sharon Casola did. The result is that her firm, Latham & Watkins, soon partnered with a lender to help associates refinance their debt.More than 150 Latham associates have taken advantage of the program, reports LeeAnn Black, the COO Casola so boldly approached. Their savings will amount to $4.75 million in interest (an average of $31,000 per associate) over the life of the loan they refinanced.“The thing I’m most proud of is that I’ve spoken to 15 or more people at other firms,” Black says. “They’re starting to implement programs. It isn’t about us. It’s about getting that debt load off associates’ plate.”ROUGH RATESNow a second-year associate at Latham, Casola says her annual law school tuition was $50,000. By the time she graduated in 2014, the interest that had … [Read more...] about New lawyers get an assist on their student loan debt from their firms