Student Loan Debt: Student Loan Repayment Options

As most of us are aware, since the recession of 2007-2009, the economy continues to struggle with job growth and wage stagnation. Are you one of the many Americans making student loan payments that far exceed your income? Or are you chronically avoiding your payment options and either in danger of defaulting or have already defaulted?

According to a recent article in the Chicago Tribune “About half of people (in the US) making student loan payments would qualify to pay less, but only 13 percent are knowledgeable enough to set up payments that would be less overwhelming. This and other studies criticize the Department of Education for “hiding the escape routes from people struggling with student loan debt”.

By the Numbers:

•  “About 41 million Americans have student loans, and some economists believe that the massive debt burdens are keeping individuals from starting families, buying homes, or spending more freely on items they might need or want.”.
• As of September 2014, One in Seven student loan borrowers — or about 14 percent of student loan volume was in default within the first three years after college. 
• In 2014, about $103 billion of the more than $1 trillion of federal student loans were in default, something that is easily avoided! (http://www.gao.gov/assets/670/661591.pdf)

Your Options

First, we must be clear that it is a borrowers responsibility to repay their student loans. Student loan debt includes undergraduate & graduate Stafford Loans; subsidized & unsubsidized. The Perkins loan program is managed directly by participating schools and helps lower income students with the cost of their education by offering a lower interest rate (https://studentaid.ed.gov/sa/types/loans/perkins). Regardless of the type of loans borrowed, all loans must be paid back or one risks defaulting, which will ruin your credit and generally narrow employ-ability options. 

1. Student Loan Deferments: https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance

• Deferments: There are many types of deferments, but basically a deferment is a period during which repayment of the principal balance of your loan is temporarily delayed. You may defer interest as well, but be aware that interest will continue to accrue and added on to the principal balance of your loan.
• Forbearance:  If you can't make your scheduled loan payments, but don't qualify for a deferment; your loan servicer may be able to grant you a forbearance. With forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. Again, interest will accrue on your loans

2. Loan Consolidation:
https://studentaid.ed.gov/sa/repay-loans/consolidation

• Each year, loans are sold to servicers and most borrowers end up with more than one servicer once they reach graduation. Consolidation helps move all your loans with one servicer, which makes it easier for borrowers to keep track of them.
• Choose your servicer wisely by checking with the U.S. DOE Website.
• If you will be attending graduate school, it is generally recommended to wait until one is completely done with their education before consolidating loans; but check with your servicer for clarification.

3. Income Sensitive Repayment Plans: http://www.finaid.org/loans/isr.phtml

• All borrowers in repayment may apply for and if qualified, participate in this repayment plan, which can significantly reduce your monthly loan payments. The monthly loan payment is pegged to a fixed percentage of gross monthly income, anywhere between 4% and 25%. While the borrower determines the interest rate, the resulting monthly payment must be greater than or equal to the interest that accrues. Some lenders set a minimum threshold on the percentage of income based on your debt-to-income ratio.

4. Student Loan Forgiveness:
 https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation

• Students that choose to work in the Non-Profit Sector or Public Service may be eligible for loan forgiveness, generally after 10 years. 
• During this time, loan payments are required, but borrowers may be eligible for Income Sensitive Repayment. 

5. Where to begin:
https://studentaid.ed.gov/sa/repay-loans

• This website contains most of the information one needs to avoid repayment pitfalls, by reducing or deferring payments. 

About the Author:
Vicki Ancell is a coach, trainer, & author and owner of Pathway Coaching. She has over 25 years experience working in higher education, helping employees & employers align career & corporate goals with the right education solution. At Pathway Coaching, Vicki continues her work with individuals & organizations by bringing her knowledge, experience, & creativity to the coaching process.

References:

1. Student Loan Borrowers Have Options http://www.chicagotribune.com/business/yourmoney/ct-marksjarvis-0927-biz-20150925-column.html
2. The NY Times: Why Student Debtors Go Unrescued http://www.nytimes.com/2015/10/07/opinion/why-student-debtors-go-unrescued.html?_r=0
3. The Government Accountability Office Report on Student Loan Default & Oversighthttp://www.gao.gov/assets/680/672136.pdf
4.  Student Borrowers are Missing out on the Best Repayment Plans:http://www.usnews.com/news/articles/2015/09/18/student-loan-borrowers-not-taking-advantage-of-best-repayment-plan-gao-says

Open source your skills development

It’s time to harness the innovations in higher education.

Early in my career, I worked for IBM. Back then, the “glass house” datacenter controlled access to all information technology resources. This model demanded centralized management of IT assets, tight control over all development efforts and long planning horizons. Stability, reliability and rigidity were hallmarks of this era. Eventually, however, the enormous cost and slow pace of this model lead to its undoing. First through the growth of distributed computing and more recently through the rise of software as a service. Each evolution has reduced the cost of managing computing, and more importantly has significantly accelerated the pace at which new technology initiatives are deployed.

A parallel situation has been occurring with the management of corporate learning and development. Trying to centrally manage training and employee development is too slow and too expensive to meet the rapid pace of change within organizations. Recent studies show the half-life of workplace skills are five years or less. How can any group possibly have the knowledge and know-how to keep up with all of the change? A more organic, open source model is needed; one that enables an organization to respond more quickly to the rapid changes in workforce skills.

Today the higher education community is taking on this challenge. Innovations are bringing about lower costs and more rapid development. In the past few years, we have seen the emergence of MOOCs (Massively Open Online Courses), competency-based learning programs, short-course formats, and accelerated degree paths, to name a few. These innovations open up a game-changing opportunity for Learning and Development professionals.

Learners (whether they are consumers or employees) are already taking advantage of this opportunity. They recognize that in today’s economy there is intense pressure to continually learn new things and stay competitive. Witness the growth of MOOCs alone over the past few years. The top 5 providers served close to 17 million students in 2014 (Source: EdSurge). Over 400 universities now offer MOOCs with 2400 courses offered increasingly in specializations that are of interest to employers - cybersecurity anyone? And this is just one of the innovations occurring.

Employers can gain the following advantages by harnessing these innovations.

• Cost-effective –it’s less costly than developing your own programs or sending employees to traditional programs.
• Speed – it allows quick access to new content in order to develop new skills in a rapidly changing world.
• Learner appeal – programs are delivered in consumer-friendly, online formats that drive utilization. Even better many of these programs provide a credential.

New model for corporate learning and development

How can Learning and Development (L&D) professionals open source skill development in their organizations? What’s needed is a new model for sourcing and managing these programs. The time and effort spent in building content and infrastructure can be redirected to providing employees access to the vast array of relevant programs already available from higher education and training providers. Changing the focus advances the real purpose for L&D: to develop employees.

The rapid changes occurring provide a great opportunity to leverage the resources to develop your own virtual academy. One that supports the skills and competencies you want. There are four key elements of this open-source model:

• Learning supplier network – some may call it a learning portal, but it’s essentially a network of participating education/training suppliers. L&D would have the ability to direct existing supplier relationships into the network as well as augment it with new providers that are providing innovative content and programs, ideally at a preferred price. Support for different formats (e.g. online, classroom, blended) to meet the different needs of learners as well as support resources such as advising will be important.

• Learning mapped to employer needs - having learning content for content’s sake serves no purpose. The learning must ultimately support the skills and competencies needed by the employer. This model can automatically map educational programs to the company’s unique talent development needs. Also needed is the ability for L&D professionals to set the standards and choose the providers that are associated with quality in their organizations.

• Sourcing and procurement – finding and identifying new suppliers is an on-going effort since the learning needs of the organization will evolve. Mechanisms to make that happen easily and quickly are critical. Since the learning is delivered by an external supplier, the need to securely purchase programs will be critical as well.

• Analytics – in this new model, it’s important for the L&D team to understand which suppliers are performing and which ones are not. This measurement can take several forms such as program utilization, employee satisfaction, cost or a combination of factors – it all depends upon the employer’s needs.

Education is undergoing a sea change and now is the time for smart employers to leverage the innovations. Organizations that adopt a different corporate learning and development model will gain significant advantages, especially in their ability to rapidly deploy new and relevant programs for their employees and stay competitive.

About the Author

John Zappa is a co-founder and Chief Operating Officer of Knoitall, which helps employers develop the skills of their workforce through private learning marketplaces.  An industry expert on lifelong learning, John has spoken at numerous industry conferences including Chief Learning Officer Symposium, Society of Human Resource Management, and The Conference Board, and has co-authored articles on corporate tuition assistance programs and talent management. 

Connecting Learning to Needed Competencies

A short explanation of competency-based learning centers.

Many people understand the inherent potential of using education and training to develop needed skills of their employees.  With the growth of MOOCs, short-course formats, eLearning and competency-based education, it seems like a great idea to harness the innovative programs that are rapidly evolving in the marketplace.

Think about it. Your employees are hungry for relevant learning opportunities that will help them to grow in their careers. And every day more learning content is developed from accredited institutions and training providers.  When managed properly, enabling the learning is good business for you. It can lead to increased retention, higher productivity and more engaged employees.  

How exactly do you, as an employer, link these very different worlds together? More to the point, how do you get access to the learning that matters for your employees? And do this without paying for more than you need, dedicating precious resources that are already overstretched, or getting bogged down in yet another IT-dependent project?

Competency-based Learning Center

At Knoitall, we have taken a novel approach to this challenge. We use software to map the world’s learning opportunities directly to the needed skills and competencies of an organization. The result is a competency-based learning center that is unique for each organization.  

There are many advantages to this approach:

• Connects employees to learning options that foster the skills and competencies desired by employers. When I led the tuition assistance business at EdLink one of the biggest concerns of employers was spending money on education that did not benefit their organization.

• Supports the skills development of millennial employees. Educational opportunities and career development are the top retention drivers for this group.

• Integrates all of the learning options into a single learning center. It eliminates the scattered approach to managing learning assets, which is common at so many organizations (e.g. separate portals for tuition assistance options, internal training programs, leadership development programs, partner school programs, etc.).

Magic behind the curtain

To support this approach, learning providers “list” programs with Knoitall. They can be degrees, certificates, individual classes, self-directed videos and more. Just as importantly, face-to-face as well as online programs are supported. As long as it delivers a learning outcome, it has a place within Knoitall

Every time a learning opportunity is listed, it is mapped to a proprietary list of almost 600 competencies. The competencies are relevant to employers and include categories such as business (e.g. project management), computers and software (e.g. cybersecurity) or science and math (e.g. bioinformatics) among many others.

The power for the employer comes from selecting the right competencies to jointly build the skills of individual employees and the skillset of the organization. We work with employers to support their process of selecting competencies. In many cases, the employer has already identified the relevant competencies. If not, we can guide them through obtaining this information within their organization.

Once the needed skills and competencies are defined and shared, our software maps the learning to the skill needs of an employer. The result is a learning center that directly corresponds to the employer’s needs. This starkly contrasts with standard learning catalogs of randomly aggregated learning content, which may or may not be relevant to an employer.

About the Author

John Zappa is a co-founder and Chief Operating Officer of Knoitall, which help employers develop the skills of their workforce through private learning marketplaces.  An industry expert on lifelong learning, John has spoken at numerous industry conferences including Chief Learning Officer Symposium, Society of Human Resource Management, and The Conference Board, and has co-authored articles on corporate tuition assistance programs and talent management.  

How knoitall supports the education assistance activities of an organization

For some organizations a private corporate learning center powered on the Knotall platform may be enough to support your tuition assistance needs.  For others, a learning center can enhance your existing education assistance activities and coexist with your current third party software and/or administration.

Key to this is the ability to filter learning content within a private marketplace to support some of the key organizational requirements of most tuition assistance programs, such as:

1. Filter by regionally accredited content-the knoitall platform can limit your learning center content to those offerings provided by regionally accredited educational providers. These would primarily be community colleges and universities, a key requirement of most tuition assistance policies.
2. Filter by competencies-most tuition assistance policies require that the education being pursued apply to needs of the organization.  The Knoitall platform supports this requirement by giving you the ability to filter the accredited educational content to those competencies you are looking to build in your organization.
3. Filter by format-content within your private learning center can be filtered by format to support the particular types of programs that may be covered under your policy.  For example, you can limit the viewable content to degree programs, or you can increase the viewable formats to include certificates and individual classes.  

Management Approval

The Knoitall platform can support a simple management approval process where the employee emails a link to the program of interest for the manager to review.  The manager can access the program of interest and review key program variables like cost, learning outcomes, program schedule, duration, course syllabus (if provided), and provider reviews.  All communications between the employee and manager regarding the program is stored in the employee's transcript, including the manager's approval or denial.  

For some organizations, a Knoitall private learning marketplace can support their critical tuition assistance policy requirements and provides an inexpensive alternative to more traditional software licensing approaches or outsourcing engagements.  For those organizations who have already made an investment in tuition assistance software or administration, Knoitall provides a value-added enhancement to these efforts by pointing employees towards programs and learning providers that support both the employee development goals as well as the skills needs of the Organization.  

A private Knoitall learning center can help enhance the education return on investment for an Organization by improving the employee discovery process and, thereby, enhancing completion rates across the enterprise.  Current Department of Education statistics show that < 50% of working adults complete the formal education covered under their company's tuition assistance policy.  Those organizations that view tuition assistance activities as an investment in their human capital find this statistic troubling.  AND those organizations who simply view education assistance as a retention tool are losing out as well since employees may not be staying through to the completion of the program.

We believe there is a direct correlation between finding the Right program and completing it.  Knoitall helps direct employees to the programs that meet the needs of the organization while providing the employee with tools to asses between the educational options being considered. These include reviews, location and pricing data, learning outcomes, long form descriptions and direct access to advisors at the schools being considered.

Knoitall has developed APIs and has direct relationships with most of the leading third party tuition assistance administrators and can support a seamless employee experience from discovery through to program completion.

If you are interested in leveraging the Knoitall platform to support your tuition assistance activities, please let us know...or get started building your private learning center on the Knoitall platform today.

How Competency Mapping Creates a Viral Network Effect for Learning

Talk to most venture capitalists about your venture, and one of the first questions is usually, "So, how does this platform create a viral network effect?" 

Viral networks are a "tricky" thing.  The very term "viral" connotes an uncontrolled growth pattern...and, in effect, that's what happens.  However, there are certain platforms that have viral DNA built in...LinkedIn, for example.  The Knoitall platform is one of these (if you're a VC reading this, I know...it's a bold statement.  I do believe, however, I can back it up).

The Knoitall "network" effect accrues to the learning provider who lists a set of learning offerings on the Knoitall platform.  Our platform is built on a competency-based learning map that scans every piece of learning as it comes into Knoitall and maps it to a set of learning competencies that are stored with the learning item in our database. This process occurs once for each learning item entered into Knoitall.  The "magic" is in how this one-time map networks that learning throughout our platform.

The Knoitall platform is used by employers and other organizations to build out private learning views for their employees and key stakeholders based upon the unique competency needs of these individual entities.  These organizations identify their competency needs using the same proprietary competency map that Knoitall uses to organize the learning that is listed by learning providers.

"So, where's the viral network effect?"  It's in the matching of learning competencies delivered by provider listings to the competency needs of each organization that creates a private learning center on the Knoitall platform.  Each time a new organization launches a private learning center on the Knoitall platform, their learning center is filled with the offerings in our database that map to their competency needs.  In essence, we grow the distribution network for a provider's content each time it matches the needs of a new organization on our platform. A learning provider enters their content once, and it automatically gets listed into new learning centers each time the competencies delivered map to the needs of the learning center.

The same process works for any individual who chooses to create their own personal learning center on our platform.  They identify the individual skills they are seeking using our competency map, and their learning center is filled with provider content that maps to those needs.

It's a new way to distribute learning content, and the beauty is in the fact that "it just happens...it's built into the architecture of our learning management platform."

Introduction From Jeff Creighton

Hi. We're happy you're here. We believe learning is going through a transformative process not seen in the past 100 years.  Nanodegrees, MOOCs, LMS 2.0, etc.  We're all struggling to stay ahead of the curve, and Knoitall is no different.  We love to learn from our clients about the challenges they face in skilling up the workforce. We love to connect with learning providers who are solving these challenges with new approaches, like competency-based models, new forms of packaging, and new ways to measure success.

As we learn from our audience we'll be sharing what we find here.  You may agree or disagree with our opinions, which only adds value to the dialogue.  Together we may discover new ways to enhance our greatest asset inside our organizations (that would be human capital).

We're glad you're here.