Busy week in student loan land:

• What’s the average student debt levels by state?  The HuffPost provides a graphic for students  to see how their state stacks up.

• This is a fee that you cannot avoid:  origination fees on federal student loans (The Hill); note that Stafford Loans carry 1.073% fee and PLUS loans 4.292% fees.

Last month, Rep. Susan Davis (D-Calif.), introduced legislation that would eliminate origination fees on federal student loans. Her office estimates that these administrative fees cost borrowers around $1.5 billion per year.

• Yikes!  From a financial aid director:  What is the biggest misconception about student loans (NerdWallet)?

Students forget that loans are self-help and must be repaid. Although loans are an easy way to satisfy a student’s current bill, they need to understand that this is money that must be repaid after graduation.

• More dangerous thinking:  Almost 1/4 of students believe that their student loans will be forgiven (Time):

A new study from Junior Achievement USA and PwC US conducted by Ypulse finds that 24% of millennials think their student loans will be forgiven.

“It’s a scary statistic,” Junior Achievement president Jack Kosakowski tells CNBC. The survey doesn’t explore why roughly a quarter of young people have such an optimistic — and for the majority, unrealistic — expectation.

• Student debt balances continue to climb; approaching $31,000 maximum allowed for federal loans (Consumerist); might be interesting report for students to analyze

The latest Institute for College Access & Success’ Project on Student Debt report [PDF] on student debt found that 69% of 2013 graduates of four-year public and nonprofit colleges owed an average of $28,400, up 2% compared to $27,850 in 2012.

• Overall federal student loans declined in 2013-14 (International Business Times); might be interesting for students to read this article and the preceding one and discuss why one shows increasing student debt burdens and this one suggests declines in student loans:

In the 2013-2014 year, parents and undergraduate students borrowed $106 billion in federal and nonfederal education loans, according to the College Board’s Trends in Student Aid report released Thursday. That’s $8.7 billion less than in 2012-2013 and 13 percent less than the borrowing peak of $122.1 billion in 2010-2011. Experts identified two major, linked reasons behind the decline: shrinking enrollment and a flourishing economy.

• Additional lenders providing private student loan modifications in response to recent criticism from CFPB (Washington Post); don’t get too excited as number of loans being modified is still small:

On Wednesday, Wells Fargo said it would lower interest rates for eligible borrowers starting this month and extend repayment periods starting in February. The bank, which has $11.9 billion worth of private student loans, anticipates the move will save borrowers thousands of dollars in interest payments over the course of the loan.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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