PLATTSBURGH — Charles Schumer learned about the misleading nature of college loans the hard way.
With his youngest daughter heading off to college and the older one entering law school, the U.S. senator knew he needed to look into loans.
“I tried to go through the process with her,” he said. “It’s totally confusing.”
Specifically, it was difficult to tell what the rates would be, when the loans would be due and when interest would start being tacked on.
“You had to be Albert Einstein to figure out how much interest you will pay.”
Schumer hopes new legislation will clear up some of the confusion and prevent families from being unknowingly saddled with loads of debt.
CONFUSING PAPERWORK
He has unveiled a new federal plan to require complete disclosure of student-loan terms and fees on every application. It would require lenders to detail loan amounts, range of interest rates and any and all fees in a standardized, easy-to-read table on all applications.
And after students apply for loans and before signing promissory notes, the exact interest rate and other terms would be revealed in a second, mandatory disclosure form.
“A high-school graduate in upstate New York shouldn’t need a law degree to pick a loan for college,” Schumer said in a press release. “More and more college students and their families across the state use private student loans to pay for their college expenses. We need to make sure that students and their families get complete and unbiased information on all of their options, including any and all affordable loans.”
The problem, he said, is that many student-loan applications contain pages of fine print that often hide new fees, sudden rate changes and unfair terms. Some sections contain provisions contingent on sections found elsewhere in the application and that are sometimes only applicable to certain states.
“Some banks and lenders offer Web sites to supposedly clear up the confusion,” Schumer said, “but the Web sites simply attempt to clarify the company’s loan offer, rather than give students an opportunity to compare all rates and fees in the student-loan market.”
GROWING DEBT
According to figures released by Schumer’s office, nearly two out of every three students nationwide have student-loan debt, compared to less than one-half in 1993.
Debt levels for graduating seniors have soared over the past decade from $9,250 to $19,200.
College graduates in New York state face an average debt of $17,527.
About 30,242 students live in the North Country, and 81 percent of them are in debt upon graduating. In fact, the average North Country college graduate owes at least $15,000.
“This is a very serious problem, and we are going to do something about it.”
PROPOSAL
The “Schumer box” for student loans would consist of a chart describing various loan scenarios, with information on loan amounts, interest rates and payment periods. It will clearly explain how much students will owe, including interest, in order to pay off loans.
The legislation will further require lenders to make two disclosures: one on the initial application and another after the potential borrower applies but before she or he signs the promissory note.
And lenders would have to disclose that colleges may have school-specific student-loan benefits, while encouraging students to exhaust federal loans before pursuing private ones.
“This legislation will make life a lot easier and paying back loans a lot simpler and cheaper,” Schumer said.
“The advantage will be people will know what they are getting into, they will know if they are taking out too much, and there will be comparison shopping, and the rates will come down.”
E-mail Stephen Bartlett at:
sbartlett@pressrepublican.com
Local News
Schumer pushes for college-loan disclosure
- Local News
-
-
Attempted-murder trial set
The case against Robert J. McCann, who is charged with trying to kill his former girlfriend at a secluded Westville site, begins Tuesday in Franklin County Court.
-
A historic battle for interracial marriage
Forty-five years ago, the U.S. Supreme Court struck down all remaining state bans on interracial marriage in Loving v. Virginia.
-
Fireworks to close weekend carnival
The final day of the Saranac Lake Winter Carnival is filled with activities and events.
-
Arts and economic development discussed
A success story about a theater in Glens Falls underscored the importance of the arts at a presentation put on by Partnership for Community Development in Plattsburgh.
-
Essex County launches flood-recovery grant outreach
The Empire State Development Flood Recovery Grant Program provides up to $20,000 in grant funds for businesses, farms and rental property recovering from flood damage.
-
In Montreal, amour is the word
Go on a romantic getaway north of the border for under $50.
-
Liquor and Wine Warehouse honored at national convention
The business was named a Brown-Forman Retailer of the Year and received the award at the American Beverage Licensees convention in Milwaukee.
-
Cost of the Market Basket remains steady in January
Costs mark the third consecutive month of good news for consumers.
-
Of Interest: Feb. 12, 2012
Peru Central School Board to hold budget discussion.
-
Business briefs: Feb. 12, 2012
New manager; Approved appraiser; Helicopter survey; Radio co-host; Disaster relief; Professional driver; New president; Business mixer; Fundraiser set; Web chat.
-
Farm briefs: Feb. 12, 2012
Registration open for pest-management training; Water-withdrawal reporting date approaching; Farm Bureau applauds pro-farm legislation;
- February 11, 2012
-
Attempted-murder trial set
The case against Robert J. McCann, who is charged with trying to kill his former girlfriend at a secluded Westville site, begins Tuesday in Franklin County Court.
-
United Way of the Adirondack Region exceeds goal
The 2012 campaign brought in $775,112.
-
Clinton County to consolidate voting districts
The move is aimed at saving towns and the City of Plattsburgh money for hosting elections.
-
Waterway projects approved for Essex County
The State Emergency Management Office has so far identified 26 sites that need flood-mitigation or remediation; funding has come through for nine so far.
-
Area schools battle against time
Teachers and administrators around the North Country struggle over how to meet state mandates while providing quality education.
-
Champlain snowmobile crash results in serious injuries
Douglas M. Tetreault and Robert Worrell were transferred to Fletcher Allen Health Care in Burlington from CVPH Medical Center in Plattsburgh following the early morning accident along the Great Chazy River.
-
Parade highlights carnival festivities
Many other events are on course for the Saranac Lake Winter Carnival this weekend.
-
- Recent Article Comments
Pop Music Superstar Whitney Houston Dies at 48
Police: Houston Found Dead in Her Hotel Room
Paul Suffers Narrow Loss to Romney in Maine
Recording Superstar Whitney Houston Dead at 48
Maine GOP Chairman Says Romney Wins Caucuses
Palin Brings Anti-Washington Message to CPAC
Obama Scraps Birth Control Mandate
US Airmen's Killer Sentenced to Life in Germany
Navy Names Ship for Gabrielle Giffords
Raw Video: Deadly Blasts in Syria
Romney Slams President Obama at CPAC
Gingrich: Pres. Obama 'waging War on Religion'
5 Killed in Wrong-way Crash on I-10 in La.
Uzbek Man Pleads Guilty in Plot to Kill Obama
Denver's Largest-Ever Drug Bust Nets Dozens
Marines: No Punishment for Nazi-like Flag
Vets Look to Translate Military Skills Into Jobs
Raw Video: School Bus Burst Into Flames
LA School Reopens Amid Sex Abuse Scandal
$25B Settlement Reached Over Foreclosure Abuses
