Florida settles suit with student loan firm

Florida and 11 other states settled with Student Loan Xpress Tuesday, forgiving $112.8 million in loans used to attend the now-closed Silver State Helicopters training school.

Students in Florida will have $17 million in loans forgiven by the financial aid company, which served as the preferred student lender for the school for at least two years and loaned about $174 million to 2,300 students across the country. School records show only a small percentage of the 2,700 students graduated and drop out rates were high.

The company had 34 locations nationwide, including schools at Fort Lauderdale Executive Airport, Jacksonville, Lakeland and Melbourne.

In 2008, Silver State had stopped operating and filed for bankruptcy. Most students were left owing Student Loan Xpress for training and certifications they didn't get. The Florida Attorney General's Office received more than 300 complaints about the company's bankruptcy and the student loans still owed.

Student Loan Xpress will forgive 75 percent of the total amount borrowed for most Silver State Helicopters students. The percentage for the remaining students will vary by the amount of training each successfully completed.

The agreement with the loan company should keep negative information about students who did not pay their loans from appearing on credit reports. At other schools where the company is the only private loan provider, it must provide written disclosures to prospective borrowers that say the loans don't constitute an endorsement of the school, its principals or the quality of education or training offered.


Source

Student loan rate goes negative

Around 390,000 graduates with outstanding student loans will see their interest rates turn negative in a move which will reduce debts over time even without repayments.
The UK's current period of Retail Prices Index (RPI) deflation will see the interest rate payable on student loans taken out before 1998 plunge to minus 0.4% - the first time the interest rate has turned negative since the Government-subsidised loan service was launched.
The Student Loans Company resets the interest rate payable every September 1, based on the level of RPI inflation in March of that year.
RPI turned negative for the first time in almost 50 years in March, plunging from zero to minus 0.4% as the recession bore down on the UK.
This will be good news for pre-1998 students with debts still outstanding and who have not yet reached the salary threshold for repayment, seeing their loans reduce without having to pay anything back.


Source