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Student Loan Debt? 770-671-8830

FEBRUARY 8, 2018
By Jane S. Shaw
Federal student grants and loans increase the cost of tuition at colleges and universities, a newly published survey of scientific studies concludes.

“In 1987, then-secretary of education William J. Bennett penned an article in the New York Times entitled “Our Greedy Colleges,’” Jenna A. Robinson writes in her research paper “The Bennett Hypothesis Turns 30,” published by the James G. Martin Center for Academic Renewal in December 2017. “In it, he wrote, ‘If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase,’” Robinson wrote.

Evidence ‘Is Compelling’

Robinson’s research merged findings from 25 empirical studies on the Bennett Hypothesis. Fourteen studies, more than half of the total, reported increases in federal aid had a positive effect on increases in tuition. Seven found student aid had no effect on tuition prices.

“Taken together, the research suggests that it is likely that federal financial aid does enable or contribute to increases in tuition, probably to a large degree,” wrote Robinson. “The evidence in favor of the Bennett Hypothesis is compelling. It is most likely that federal financial aid significantly increases the cost of college, possibly across all sectors.”

‘An Ugly Cycle Ensues’

“The theory is really just common sense,” Robinson wrote in an article for the James G. Martin Center summarizing the study. “If the government gives money to students to spend on education, then students will be able and willing to spend more on that product. Universities, knowing that the funds are available, raise tuition without worrying about whether students can afford it. An ugly cycle ensues.”

Indeed, college tuition has increased faster than inflation for many years, Robinson states in the study. “The price of college tuition and fees has risen 1,335 percent since 1978: much faster than inflation and faster even than medical care (704 percent) and housing (511 percent),” Robinson writes.

Not So Simple?

Michael Rizzo, an economist at the University of Rochester who studies higher education, says it’s unwise to assume too simple a connection between federal aid and tuition.

“There are many reasons for high and increasing tuition,” Rizzo said. “Subsidizing college increases the demand for college. Whether one would expect a small, large, or negligible effect on tuition depends in a huge way on the underlying elasticity of supply of seats at colleges. I think private schools choose not to expand seats, even though doing so would not be very expensive.”

Rizzo’s theory may explain why not all the studies found aid affected tuition. The Martin Center report says the effect is clearer with student loans than with grants. Pell Grants are often less than the price of tuition and less likely to push it up.

“Going forward, the Department of Education’s main focus should be on Pell Grants to the nation’s neediest students,” Robinson wrote.

Such grants, which are limited in scope and size and meet a true need, are the policy least likely to encourage colleges and universities to raise tuition, Robinson states in her article. Robinson also recommends “skin in the game,” a policy in which universities have to bear some of the repayment costs when students borrow taxpayer money and then drop out. Such a provision is part of a proposed congressional revision of the Higher Education Act.

Far-Reaching Consequences

Thomas Lindsay, director of the Center for Higher Education at the Texas Public Policy Foundation, says our entire nation is affected by higher tuition prices.

“The tuition hyperinflation under which we have suffered injures not only students, their parents, and college professors, but the American economy as a whole,” Lindsay said. “As William Bennett stated it in 1987, ‘Federal student aid policies do not cause college price inflation, but there is little doubt that they help make it possible.’

“The Martin Center’s recommendations would do much to right the ship,” Lindsay said. “Universities must share some of the costs of these policies in order to incentivize them to economize on their expenses. Moreover, we must refocus our funding to address the truly needy through Pell Grants, which studies demonstrate are the means of support least likely to cause universities to hike tuitions further.”
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Georgia Bankruptcy & Student Loan Attorney
· February 5 at 3:36pm · Roswell ·
Unfortunately, this story is all to familiar for many of us. Give us a call today an lets get those monthly payments down! Give me 5 minutes of your time and I can show you how to drastically reduce your monthly payments!
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Private Student Loans Call us 770-671-8830

Private loans are not issued by the federal government. Instead, they’re funded by banks, credit unions, and other types of lenders. Private Student Loans are a totally different issue. Although they are similar in some aspects in getting the initial loan, the repayment of these loans can be quite different and very difficult at best. With so many people (not just millennials) buried in student loan debt, finding ways to crawl out from under this massive mountain of debt, can sometimes seem unreachable. Meanwhile, the threat that such debt presents, not just to day-to-day finance problems, but also to retirement issues when the debt grows, especially if that loan balance isn’t being paid down and doesn’t shrink.

Over the past few years, a lot of progress has been made to help borrowers who have been struggling with Federal student loan debt. There are quite a few different loan repayment plans and student loan forgiveness programs that can help and keep you on track. However, that’s not the case with private student loans. Until recently, when Wells Fargo and Discover Bank announced that they would help student loan borrowers, there was not a lot of options for borrowers with Private Student Loan debt.
The truth is, whether you’re in default, have a judgment or a collection agency is ringing your phone off the proverbial hook, your private student loan troubles are quite similar to thousands of borrowers across the country. So what is a private student loan borrower to do? Get legal help! We use tried and true methods to navigate the Private Student Loan nightmare.

Phase 1
• Gather all your Private Student Loan information
• Legally challenge each and every lender’s debt to its content and validity.
Phase 2
• Evaluate all documents returned by the lender for completeness of content and compliance with current governing laws.
Phase 3
• Determine the most favorable path for our client to solve his Private Student Loan problems based on the information provided by the lenders and our client’s goals. (payment plan, settlement etc.)
Call Galler Law and speak to our friendly staff. 678-905-8686 We will schedule a consultation that will leave you smiling.
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Federal Student Loans Call us for help ! 770-671-8830

Total student loan debt has increased by over 150% in the last decade. Currently over 44 million people in the U.S. now have student loan debt.

Student Loan debt has now surpassed Credit Card debt and is now the second largest consumer debt in the U.S. with Mortgage debt taking the top spot. There were 5,344 complaints against student loan servicers so far in the Consumer Financial Protection Bureau’s complaint database in 2016. These are just 6 of the most common Servicers:

• NAVIENT: Navient came out the worst, with 1,317 complaints made about federal student loans, which breaks down to 19.54 complaints per 100,000 borrowers. When you add in private student loans, Navient had an additional 1,596 complaints against it, for a total of 2,913.

• PHEAA (FedLoan and AES) With 907 complaints against it so far this year just for federal loans, PHEAA had 10.86 complaints per 100,000 borrowers—better than Navient, certainly, but then it had 8,350,000 borrowers compared with Navient’s 6,740,000 borrowers. Overall PHEAA had 1,385 complaints—it logged another 478 complaints about private loans.

• NELNET: Although the five not-for-profit servicers collectively actually finished third from the bottom, with a surprisingly large number of complaints in aggregate, when all servicers were considered individually Nelnet claimed that spot with 406 federal loan complaints (an average of 6.51 complaints per 100,000 borrowers) and 87 private loan complaints. The Student Loan Report pointed out that, “despite private student loans making up only around 10 percent of the total student loan market, 42 percent of all complaints against servicers were made regarding private student loans.”

• GREAT LAKES: Great Lakes had an average of 3.09 complaints per 100,000 borrowers on federal loans, with 255 complaints from a total of 8,260,000 borrowers. When you add in the 46 complaints it received about its handling of private student loans that gave it its sixth-place finish.

• EdFINANCIAL/HESC: Another not-for-profit servicer, EdFinancial/HESC had 49 complaints about federal loans and 11 about private loans. The report pointed out that “on average, only 1 out of every 10,585 borrowers made a complaint to the CFPB about his or her servicer (assuming there were not multiple complaints made by one person). Though this may seem pretty low, it only includes complaints made to the CFPB. Many borrowers may have filed a complaint somewhere else, or not at all, when they ran into trouble.”


You may have options if you are struggling to repay your federal student loan debt. Considering these options and choosing the right one can provide you the relief you need. Your current finances, your student loan history, and even your employment can determine which option is in your best interest. The type of loans you have could also be a big part of choosing the most favorable options for your unique situation.

Your options may include:

• Deferment or Forbearance
• Loan Consolidation
• Income Based or Contingent Repayment Plan
• Discharge or Forgiveness
Galler Law will review your outstanding student loans to determine your available options and provide you a recommended course of action. The U.S. Department of Education offers these programs to borrowers at no charge, but you must complete and submit the required forms and documents to obtain the program desired. You may choose to do this yourself or retain Galler Law to help prepare these documents correctly so you have the best chance for success in ending the Student Loan nightmare.


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