Under the law, borrowers who are permanently disabled are eligible to have their federal student loans discharged. While the government has taken steps in the past to make the process more streamlined for consumers, the Department of Education will now proactively seek out eligible borrowers. [More]
Education
Feds Shut Down Student Loan Debt Relief Operation That Collected $3.6M In Illegal Fees
By 3.30.16
Federal law bars debt relief services from receiving upfront fees before they’ve even renegotiated a single debt for a customer. But one student loan debt relief operation allegedly took in nearly $3.6 million in illegal fees, only to enroll borrowers in programs that are already available for free.
[More]
Sallie Mae To Offer Increasingly Popular Parent Student Loans
By 3.29.16
For years, parents have assisted their children in shouldering the increasingly high cost of college: co-signing private student loans, taking part in federal loan programs, and saving for years to contribute. Private student loan lenders have been offering parent loans as an alternative for several years. And now the country’s largest lender plans to enter the fray with its own version. [More]
Former Corinthian College Students To Have Easier Time Getting Student Loan Discharges
By 3.25.16
For nearly a year, advocates and lawmakers have shared their dissatisfaction with the Department of Education’s pace and complicated process on discharging the student loan debt for students of now-defunct for-profit chain Corinthian Colleges. Today, the Department is expected to clear a path for debt relief for these students after determining that state investigations into the schools found enough proof that the company widely misled students about their futures if they attended the schools. [More]
Failed For-Profit College Operator Ordered To Pay $1.1 Billion For Predatory Practices
By 3.24.16
Corinthian Colleges Inc. — which formerly ran for-profit education chains like Everest University, Heald College, and WyoTech — may have collapsed and had its remnants sold off, but the lawsuits against the failed company continue to loom. This week, a California judge ordered the defunct company to fork over $1.1 billion to the state for lying to students, investors, and regulators. [More]
$176M In Wages Garnished For Unpaid Federal Student Loans In Just Three Months
By 3.21.16
Millions of would-be students turn to the federal government in order finance their education, each taking out thousands of dollars in loans. While that influx of funds allows borrowers to seek a better life by obtaining a degree, it also has to be repaid. And when that becomes impossible for some consumers, debt collectors hired by the Department of Education sometimes resort to garnishing wages. [More]
Corinthian Colleges Allegedly Recruited Homeless Students, Advertised Non-Existent Programs
By 3.18.16
Just when you think the accusations levied against now-defunct for-profit college chain Corinthian Colleges couldn’t get worse — inflating job placement rates, grade manipulation, and questionable marketing practices — they do. The California Attorney General’s office filed thousands of pages of documents and testimony as part of its ongoing lawsuit against the school highlighting an even more egregious practice: allegedly recruiting homeless students and assisting them in taking out thousands of dollars in loans they could never repay. [More]
Are Employee Student Loan Contributions The Next 401(K)?
By 3.18.16
Any help graduates can get when it comes to repaying their mountains of student loan debt is often welcome: from cities offering debt forgiveness to keep young adults in their areas to programs in which states will pay for portions of their education. Now, more employers are jumping on the assistance train by providing student loan payment contributions as part of their compensation plans. [More]
Law Firm In Charge Of Corinthian Colleges Turnaround Fired By Dept. Of Education
By 3.15.16
When Education Credit Management Corporation completed the purchase of 56 Everest University and WyoTech campuses from now-defunct for-profit education chain Corinthian Colleges, it agreed to hire an independent monitor to oversee the turnaround of the schools. Things apparently aren’t going so well, as the Department of Education announced it has fired the law firm hired for the task. [More]
VA Suspends DeVry University’s Participation In “Principles Of Excellence” Program
By 3.14.16
The Department of Veterans Affairs announced Monday that it would suspend DeVry University’s status as a Principles of Excellence institution after reviewing a federal lawsuit that accuses the popular for-profit college chain of deceiving prospective students about their employment potential after graduation. [More]
Student Loan Companies Tell Congress: Debt-Collection Robocalls Are In Borrowers’ Best Interest
By 3.10.16
Show me someone who supports robocalls, and I’ll show you someone that has very few friends. Which is why it’s baffling that the Senate has yet to act on a bill introduced last fall that would close a loophole allowing the government to make debt-collection robocalls. But you know who does support robocalls? The student loan companies that are currently trying to convince Congress that these invasive annoyances are really for our benefit. [More]
Whistleblower Lawsuit Claims University Of Phoenix Defrauded The Federal Government
By 3.9.16
You can now add the University of Phoenix and its parent company, Apollo Education Group, to the list of for-profit educators who find themselves on the defendant end of a whistleblower lawsuit. A former Phoenix employee is accusing the company of submitting false student aid information in order to receive federal funding it was not entitled to. [More]
Student Loan Companies Could Face Enforcement Actions Over Automatic Defaults
By 3.9.16
In recent years, countless private student loan borrowers have found themselves placed in automatic default – even if they were up-to-date on payments – when their co-signer died or filed for bankruptcy. Federal regulators now appear poised to rein in this often devastating practice, warning student loan lenders and servicers that they could soon face enforcement action if they continue the practice. [More]
Appeals Court Shuts Down For-Profit College Industry’s Effort To Avoid Accountability
By 3.8.16
The for-profit college industry lost an important legal battle today, when a federal appeals court upheld last year’s lower court ruling in favor of new regulations intended to hold these controversial schools accountable. [More]
Advocates: Schools Using Forced Arbitration Shouldn’t Receive Federal Aid
By 3.4.16
For-profit colleges that require students to sign away their legal rights, forcing them into arbitration in order to enroll in classes should not receive federal financial aid, a coalition of 47 consumer advocacy groups urged acting Secretary of Education John King on Friday. [More]
AGs Seek Better Protections For Servicemembers Deceived By For-Profit Colleges
By 2.29.16
Federal regulators must do more to protect servicemembers from unscrupulous colleges seeking to get their hands on their education benefits. That’s the message eight states want to get across to the secretary of Veteran Affairs following reports that some for-profit colleges target military personnel using predatory practices. [More]
Man Claims He Was Arrested For Unpaid Federal Student Loan Debt
By 2.16.16
More than a century ago, the U.S. did away with the idea of debtor’s prison, and the Fair Debt Collection Practices Act explicitly forbids debt collectors from using the threat of jail time as a way to collect on owed money. So how does a Texas man end up with U.S. Marshals at his door, ready to arrest him for a nearly 30-year-old student loan debt? [More]
Senators: No More Federal Funding To For-Profit Colleges That Strip Students Of Legal Rights
By 2.12.16
If your college breaks the law, you should be able to pursue a legal action in court. But following the lead of banks, wireless providers, and cable companies some for-profit colleges have been stripping students of their legal rights and forcing them into arbitration. These schools should not receive federal funding, says one group of lawmakers. [More]
