Student Loan Lawsuit Defense News

October 31, 2014

Student-Loan Servicers Are Often ‘Unfair’ to Borrowers, U.S. Finds

Report: “Supervisory Highlights”

Summary: Earlier this month, in the third annual report of its student-loan ombudsman, the bureau reported that private loan servicers aren’t doing much to help borrowers understand their repayment options.more...

October 30, 2014

CFPB Outlines Debt Collection Violations in Latest Supervisory Highlights Report

The report also identifies violations in the student loan and mortgage servicing markets and serves as a source for collection agencies to evaluate their operations with the CFPB’s guidelines.more...

October 27, 2014

Is Grandma Struggling With Student Loan Debt?

In the past ten years, the amount of student loan debt Americans owe has doubled to well over $1 trillion. It’s estimated that this includes more than 700,000 households headed by someone age 65 or older. According to a report by the General Accounting office, while student loan debt owed by seniors is a “small fraction” of the total, it is growing “at a much faster pace- from about $2.8 billion in 2005 to about $18.2 billion in 2013- more than a six-fold increase.”more...

October 26, 2014

Making your student debt worth its burden

If you write about personal finance for enough years, you end up on a lot of strange email lists. So I wasn't surprised when a message intended for debt collection agencies turned up in my inbox yesterday. But I did raise an eyebrow over its content.more...

October 25, 2014

The Government Lets Almost Anyone Collect on Defaulted Student Loans

Debt collection is an awkward business for the federal government. Government agencies have to handle debtors with more care than, say, banks, which can dispense with a distressed borrower by kicking his file over to their favorite collection agency. Or so one would think.more...

October 19, 2014

Consumer Regulator Vows Action As Student Loan Borrowers Suffer

In October 2012, the federal agency charged with protecting households from predatory financial companies issued a report lamenting the lack of opportunities for distressed borrowers to rework their troubled private student loans.more...

October 18, 2014

Give student loans the finger: A new solution to a massive generational outrage

Young people and their future families are being bankrupted. Here's a radical response to the heist of the century more...

October 12, 2014

Uncle Sam won’t forget about your student loans

Your notices to pay your student loans might be stuffed into a drawer and you might be ignoring them, but Uncle Sam will come looking for the money.more...

October 11, 2014

4 Ways Student Loan Holders Can Master Their Debt

Nearly 40 percent of younger Americans are carrying some amount of student debt and the Pew Research Center's research shows that an inability to manage and pay off that debt can impact future earning potential. The center's 2014 Young Adults, Student Debt and Economic Well-being Study released earlier this year shows that those without student debt earn as much as seven times those with student debt.more...

October 5, 2014

What Really Happens if You Default on Your Student Loans?

With many young graduates carrying anywhere from thousands to hundreds of thousands of dollars in student loan debt, students are currently facing a mountain of a financial challenge. On top of already high numbers, student loan debt is a sticky kind of debt, as in it stays with the borrower or cosigner no matter what.more...

September 30, 2014

Student loan defaults put Oregon community colleges in harm's way

They're breathing a sigh of relief at Klamath Community College.

The Klamath Falls institution escaped by the narrowest margin possible fatal sanctions by the U.S. Department of Education after the Oregon college managed to reduce its student loan default rate to 29.4 percent.more...

September 29, 2014

Cradle to Grave: Student Debt Now Bankrupting Seniors

As if aging in America isn’t hard enough these days, a new government report has uncovered that seniors are facing yet another barrier to a secure retirement: their student debt. Once thought to be a young person’s issue, new data released by the Government Accountability Office shows that older Americans are also finding themselves buried under the weight of their student loans.more...

September 28, 2014

Student Loan Debt: The Only Debt You Can’t Discharge in Bankruptcy

Today’s students are being crushed with John Bunyan’s proverbial burden on their backs – student loan debt. Until relatively recently this debt could have been discharged in bankruptcy.more...

September 27, 2014

When you can max out student loans — and not have to pay it all back

Programs that set student loan payments based on a person’s income and offer loan forgiveness after a certain number of payments are meant to encourage people with college debt to choose jobs based on the merit of the work and not the size of the paycheck.more...

September 19, 2014

Department of Education criticized for how it pays debt collectors to chase student loan dollars

The Department of Education is not doing enough to crack down on debt collection agencies that are too aggressive about seeking payments from student loan borrowers, a consumer group said Wednesday.more...

September 19, 2014

Debt collections spike

Debt collectors increasingly are filing lawsuits against northern Michigan residents for defaulted debts, court records show.

Filings at the 86th District Court that covers Grand Traverse, Leelanau and Antrim counties indicate three of the nation’s prominent debt collection agencies — Midland Funding, Portfolio Recovery and LVNV Funding more...

September 18, 2014

Feds demand college forgive $569 million in student loan debt

Federal regulators are demanding that Corinthian Colleges refund more than $500 million in predatory student loans, arguing the school "lured" students in with "bogus" job prospects and then saddled them with tens of thousands of dollars of debt.more...

September 17, 2014

Student Loans Increasingly Burden the Elderly, Not Just the Young

An estimated two million Americans age 60 and older ... are in debt from unpaid student loans, according to data from the Federal Reserve Bank of New York. Its August Household Debt and Credit Report said the number of aging Americans with outstanding student loans had almost tripled from about 700,000 in 2005, whether from long-ago loans for their own educations or more recent borrowing to pay for college degrees for family members.more...

September 14, 2014

Young Woman's Dream of Becoming Midwife Blocked by Credit-Killing Debt

Binta Niang dreams of becoming a midwife and returning to her native Mali to help women. But her dream is blocked by a credit-killing debt for — of all things — an uninsured visit to an emergency room.more...

September 13, 2014

Lingering Student Loans May Be Forcing More Seniors Into Poverty

More than 20 percent of the 155,000 Social Security recipients whose checks are docked to pay back student loan debt are seniors, according to a new report from the Government Accountability Office (GAO).more...

September 7, 2014

CFPB Readying Action Against College Over Debt Sales and Collection Methods

For-profit higher education firm Corinthian Colleges revealed in a recent SEC filing that the CFPB has initiated settlement talks relating to an enforcement action over the company’s debt collection tactics and treatment of certain loans.more...

August 31, 2014

How to Fact-Check Student Loan Advice

When Johnnie was trying to figure out what to do about his student loans that were in collections, he got more than the run-around. He was almost misled into making what could have easily been a costly, bad decision.more...

August 30, 2014

Is This Student Loan Debt Collection Tactic Out of Control?

Much like back taxes and delinquent child support payments, college loan debt cannot be extinguished by bankruptcy. And, much to the dismay of thousands of Americans, long-ago student debt that borrowers thought had either been paid off or forgiven is coming back to haunt them – in the form of income garnishment. more...

August 25, 2014

College debt: For some it lasts into retirement

Student debt is growing faster for seniors than for any other age group, according to the Federal Reserve Bank of New York, Bloomberg Businessweek reported.more...

August 24, 2014

Student loans scammers want your cash

Debt-burdened college graduates are ripe targets for scams that come in the guise of programs offering help.

If you re a University of Washington Husky or a Washington State Cougar, you probably have one thing in common more...

August 23, 2014

How to Fact-Check Student Loan Advice

When Johnnie was trying to figure out what to do about his student loans that were in collections, he got more than the run-around. He was almost misled into making what could have easily been a costly, bad decision.more...

August 18, 2014

Student Debt Threatens the Safety Net for Elderly Americans

Until his Social Security check arrived nearly $300 lighter last June, Eric Merklein, 67, had no idea that he was carrying outstanding student debt. Merklein eventually learned that the government was taking money from his Social Security payments to repay loans he took out roughly four decades ago;more...

August 17, 2014

Half Of Federal Student Loan Borrowers Not Paying On Time

Less than half of borrowers with the most common type of federal student loan are repaying their debt on time, new data released by the U.S. Department of Education show.more...

August 10, 2014

Debt collectors knocking on too many doors

Americans' apparent indifference to debt appears, at last, to be waning.
Data show that credit card balances are at their lowest level in a decade, a good sign that we either have more money at the end of the month or that we are beginning to realize that paying 20 percent interest on yesterday's purchase isn't great financial planning.more...

August 9, 2014

Wellwishers help pastor pay off $200,000 student loan debt passed on by late daughter

Late daughter's $100,000 student loan debt has doubled in five years.

Pastor Steve Mason and his wife, Darnelle, have renewed hope after an outpouring of support has substantially decreased a $200,000 debt owed to student loan lenders.more...

August 6, 2014

What are my options when dealing with a debt collection agency working for the U.S. Department of Education?

Generally speaking, you have three options when dealing with the collector of a federal student loan:more...

July 31, 2014

Grieving parents drowning in $200,000 student loan debt receive relief

People have donated more than $8,000 through' GoFundMe

NEW YORK (CNNMoney) - Steve Mason and his wife Darnelle have been struggling to pay their daughter's six-figure student loan debt ever since she passed away five years ago -- and now they are starting to get some much needed relief. more...

July 30, 2014

Report shows 35 percent of Americans facing debt collection

A new report shows that more than 35 percent of Amercians have debts and unpaid bills that have been reported to collection agencies.more...

July 27, 2014

Hope for those who think they have fallen hopelessly behind with student loan defaults

They knew, like so many others who have defaulted, that student loans really never go away. Having them is like being in a debtor’s prison.more...

July 25, 2014

The New Student Loan Fixers

Paying off student loans is a Byzantine process, and good luck getting guidance from the Department of Education

A few years ago, a man in his late 20s, who prefers not to be named, felt he was drowning in his student debt.more...

July 19, 2014

Illinois sues student-loan "debt relief" companies

Illinois Attorney General Lisa Madigan has staked out a new area of consumer protection with a pair of lawsuits against two supposed debt-relief companies that claim they can reduce or eliminate outstanding student loans.more...

July 16, 2014

Student loan collectors giving you trouble? You're not alone, federal auditor says

LANSING -- If you've ever complained about a company trying to collect a defaulted student loan, the U.S. Inspector General's office says those complaints fell on deaf ears.more...

July 13, 2014

Am I Completely Screwed If My Student Loan Co-Signer Dies?

Imagine this scenario: You’ve been out of college for several years, have a good job and you have no problems making your student loan payments in full and on time. Then tragedy hits; your parent dies or declares bankruptcy. If this loved one was a co-signer on your student loan, this change can trigger an often-overlooked clause that allows the lender to claim you are in default on your loan, potentially wreaking longterm havoc on your credit and finances.more...

July 12, 2014

New rules on student loan rehabilitation

Loan rehabilitation is a one-time opportunity to bring a student loan that has gone into default up-to-date. A student loan typically goes into default after a borrower misses nine monthly payments. At this point, the federal government turns the loan over to a private debt collection agency.more...

July 11, 2014

Student Debt Takes a Bite Out of More Paychecks

Government Ramps Up Wage Garnishment of Defaulted Borrowers

The federal government is stepping up wage garnishment of student-loan borrowers who have defaulted, another lingering effect of the nation's ballooning college debttmore...

July 5, 2014

Student Loans Company used Wonga-style letters from fake legal firm to frighten graduates

The Student Loans Company (SLC) sent graduates letters under the name of a fake debt recovery firm to frighten them into paying up, it has emerged.more...

June 30, 2014

Fake letters scandal spreads to Student Loans Company

Graduates falling behind on debt repayments were sent threatening letters from what appears to be an independent debt collection agency – but is in fact a pseudonym for the Student Loans Company.more...

June 29, 2014

The First Steps to Take When Your Student Loans Enter Repayment

Whether you consolidate loans or stay in forbearance, you need a debt repayment plan.

You’re freshly graduated from college, holding a degree in your hand and ready to enter the workforce. Unfortunately, along the way, you accumulated a bunch of debt to pay for your education.more...

June 27, 2014

My Private Student Loan Debt Is Not Being Eliminated Because of My Disability

I am a 62 yr. old male. I am disabled since approximately 1977. Have been on Disability from work and on SSDI forever. I have tried schooling twice, but my disability has kept me from getting and keeping work.more...

June 25, 2014

What Happens If I Ignore My Student Loans?

By some estimates, nearly one in three student loan borrowers in repayment are behind on their payments. Some of those borrowers may be paying as much as they can, when they can, but others may feel their debt is hopeless and are taking the ostrich approach instead. more...

June 22, 2014

Debt collectors can't:

*Call you before 8 a.m. or after 9 p.m. They can call you at work, but they have to stop if you tell them your boss doesn't approve.

*Fail to provide you with written information. Within five days of calling you to demand payment, the collector must send you a letter telling you the amount you owe, the name of the creditor you allegedly owe it to and instructions for disputing if you believe there's an error.more...

June 21, 2014

Wall Street Sees Big Money in Student-Loan Defaults

Leave it to Wall Street to figure out how to make a quick buck from the burgeoning student-loan crisis.

The FOX Business Network has learned that investment firms such as private-equity powerhouse Carlyle Group are weighing whether they should snap up student-loan collection agencies -- companies that help lenders recover funds from borrowers who default on their loans.more...

June 15, 2014

Why Don’t We Know More About Student Loan Debt Collectors?

One hundred years ago, U.S. Supreme Court Justice Louis D. Brandeis wrote a series of articles for Harper’s Weekly in which he made the case for the merits of public disclosure: “…sunlight is said to be the best of disinfectants…”more...

June 13, 2014

Student Debt Takes a Bite Out of More Paychecks

Government Ramps Up Wage Garnishment of Defaulted Borrowers

The federal government is stepping up wage garnishment of student-loan borrowers who have defaulted, another lingering effect of the nation's ballooning college debt.more...

June 8, 2014

How to Get a Co-Signer Off a Private Student Loan

Private student loans are bad news all by themselves but when you add in a co-signer, things can get very financially messy.

Co-signers think they are doing a nice thing for their relative or child when they co-sign. They think they are helping to further the persons education and give them a hand-up in life.more...

June 7, 2014

Young and in Debt in New York City

Student Loans Make it Hard to Rent or Buy a Home

For young people, moving to New York City hasn’t made much mathematical sense for decades. The jobs don’t pay enough, the internships don’t pay at all, and the rents are prohibitive by any sane standard.more...

May 31, 2014

Student Debt Collector Takes Out Loan For Unaccredited Law School

One thing I’ve learned as I get older is that most people are incapable of learning from other people’s mistakes. It’s just not something humans are good at, I guess. If you see somebody jump off his roof and impale himself on a fence post, the human reaction seems to be “Wow, what a stupid place to put a fence post,” not, “I’M NEVER GOING TO JUMP OFF A ROOF.”more...

May 28, 2014

What you need to know about student debt collection

Your federal student loan is considered to be in “default” if you don’t make payments based on your loan agreements. For most federal student loans, you will default if you have not made a payment in over nine months. If you do hit that point, what comes next isn’t pretty.more...

May 26, 2014

Many blind to college loan needs

Figuring out the best way to pay for college can be overwhelming even for the savviest families. A new survey suggests that many people have no idea where to start.

Almost half — 48 percent — of the people surveyed by the Credit Union National Association, a trade group, said they don’t know how many loans their children will need to pay for college.more...

May 24, 2014

Dept. Of Education Sued For Access To Info On Private Debt Collectors

After being denied access to what it claims are public documents about financial incentives the U.S. Dept. of Education provides to private debt collectors, a consumer advocacy group has filed suit under the Freedom of Information Act to have those documents released.more...

May 20, 2014

Making Sallie Mae Pay

WASHINGTON -- Sallie Mae and its student-loan servicing spinoff Navient on Tuesday agreed to pay a total of $97 million to settle allegations by the federal government that the company overcharged military servicemembers and misrepresented late fees on student loans.more...

May 19, 2014

Cohen: More fairness for student loan hardship cases

WASHINGTON, DC (Press Release) – Congressman Steve Cohen (TN-09) joined several U.S. Senators and Representatives today in urging the Secretary of Education, Arne Duncan, to bring more fairness to struggling students by establishing clear standards of eligibility for “undue hardship” discharge of federal student loans in bankruptcy. more...

May 18, 2014

The Increase in Student Loan Debt has been Irrationally Epic

For at least the past two years, we’ve been hearing about the rapid rise in student loan debt in the U.S. By most measures, outstanding student loan balances are surpassed by just one other debt type: mortgages. Americans owe more for attending college than for anything else, except buying a home.more...

May 16, 2014

Defaults on loans may cost LCC feds’ revenue

Lane Community College risks a disastrous loss of money because students who left the school in recent years — by graduating or dropping out — are defaulting on federal education loans at high rates.more...

May 10, 2014

Advocates: Bill Requiring IRS To Use Private Debt Collectors Would Harm Consumers

It makes sense that the federal government would want to collect owed taxes and a proposed law would require the IRS to push that duty off to private debt collectors. However, a history of abusive practices by debt collectors and the failure of similar programs in the past has consumer advocates warning that the provision will only hurt consumers and the government in the long run.more...

May 9, 2014

How Military Members Can Avoid Illegal, Unfair Debt Collection Efforts

The Association of Credit Counseling Professionals – ACCPros – Offers Tips for Servicemembers With Student Loans and Other Debts

Members of the military face a host of enemies abroad: everything from terrorists and suicide bombers to inhospitable land and severe weather conditions.more...

April 30, 2014

Advocates seek to help trade school students burned by debts

Schools accused of exploiting students for their aid

"Everybody was basically just sitting around," Janice Peete-Bey said of trade school experience. "I don't even remember the instructor being there. It was more of a hangout spot as opposed to a school. ... I knew there was definitely something wrong with this whole scenario."more...

April 29, 2014

Sallie Mae to Split-Off Loan Servicing and Debt Collection Unit this Week

Student loan giant SLM Corp., better known as Sallie Mae, will be split into two separate companies this week: one a consumer bank focusing on education lending and the other a loan servicer and collection agency.more...

April 25, 2014

Private Student Loan Borrowers Face Automatic Default Because Of Co-Signer Provisions

College graduates with private student loans know the importance of staying current on their payments. But a new report by the Consumer Financial Protection Bureau finds that even consumers who pay their loans on time are finding themselves placed in default when the co-signer of their loan dies or declares bankruptcy.more...

April 21, 2014

Student debt holds back many would-be home buyers

Of the many factors holding back young home buyers — rising prices, tougher lending standards, a still-shaky job market — none looms larger than the recent explosion of college debt.more...

April 20, 2014

Debt Adviser: How to deal with student loan debt default

QUESTION: My student loan is in default, and my wages are being garnished. I've already consolidated the loan and performed a loan rehabilitation. Neither has worked. I'm looking for a new way to deal with this situation, and fortunately, I'm now in a stronger position to do so with a better-paying job. How do I get out of default and stop the wage garnishment?more...

April 19, 2014

Sallie Mae faces probe for massively ripping off soldiers on federal student loans

Sallie Mae is in danger of losing lucrative loan servicing contracts with the U.S. Department of Education and some of its high-level employees may face criminal penalties pending the outcome of a probe involving evidence that the student-loan behemoth has cheated active-duty soldiers who have taken out federal student loans.more...

April 13, 2014

Bankruptcies Should Cover Student Loans, Too

Allowing student loan debt to be discharged under bankruptcy laws, as recently advocated by Sen. Richard Blumenthal, is a matter of fairness.

Currently, student loans are not dischargeable. Many people oppose the senator's proposal because they think it would be too easy for debtors to rid themselves of student loans and that they should be responsible for paying those loans back. What most people don't realize is that, with a few exceptions, almost every other kind of debt can be discharged in a Chapter 7 bankruptcymore...

April 12, 2014

Dept of Ed Fails with Student Loan Debt Collection

Efforts by the U.S. Department of Education to rehabilitate defaulted student loans have been seriously flawed, according to federal investigators.

Testifying before Congress on March 12, an official from the Government Accountability Office (GAO) highlighted “serious weaknesses” in the department’s management and oversight of the loan rehabilitation process.more...

April 9, 2014

Advocates seek to help trade school students burned by debts

Schools accused of exploiting students for their aid

"Everybody was basically just sitting around," Janice Peete-Bey said of trade school experience. "I don't even remember the instructor being there. It was more of a hangout spot as opposed to a school. ... I knew there was definitely something wrong with this whole scenario."more...

April 6, 2014

Former students in uproar over debt collector

Hundreds of thousands of people with student loans outstanding from the 1990s have been sent shock letters from the company that bought the debt from the Government.

Erudio Student Loans was set up last year by the debt-recovery specialist Arrow Global. Credit industry insiders say the firm is renowned for “carpet bombing” potential debtors and, since taking over the loan book last November, it has been busy.more...

March 31, 2014

Debt Adviser: How to deal with student loan debt default

QUESTION: My student loan is in default, and my wages are being garnished. I've already consolidated the loan and performed a loan rehabilitation. Neither has worked. I'm looking for a new way to deal with this situation, and fortunately, I'm now in a stronger position to do so with a better-paying job. How do I get out of default and stop the wage garnishment?more...

March 28, 2013

Taking risk, credit unions push student loans

Interest rates, default level high

Credit unions, in the hunt for younger customers and higher returns, are rapidly expanding sales of private student loans and grabbing the attention of regulators worried about the increased risks these member-owned institutions are taking.more...

March 27, 2014

Portions of Student Loans are Increasingly Going Toward Non-College Expenses

It’s no wonder that the ballooning U.S. student loan debt — currently exceeding $1.1 trillion — is worrying economists.more...

March 23,2014

Debt Adviser: How to deal with student loan debt default

QUESTION: My student loan is in default, and my wages are being garnished. I've already consolidated the loan and performed a loan rehabilitation. Neither has worked. I'm looking for a new way to deal with this situation, and fortunately, I'm now in a stronger position to do so with a better-paying job. How do I get out of default and stop the wage garnishment?more...

March 22, 2014

Discover Financial Services Faces Student-Loan Probe

Discover Financial Services DFS -1.63% is facing a government probe over its student-loan business, the consumer lender said in a regulatory filing Tuesday.more...

March 21, 2014

Student Loan Collection Co. Accused Of Deceptive Practices

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Law360, Los Angeles (March 03, 2014, 7:01 PM ET) -- The National Collegiate Student Loan Trust and the Law Offices of Patenaude & Felix APC are accused of violating federal and state laws by trying to collect student loan debts through deceptive means, according to a putative class action filed Friday in California federal court.more...

March 20, 2014

Why Most Student Loan Debt Advice Is Bad or Just Wrong

As a consumer debt expert it is exceedingly frustrating hearing from people all around the country on a daily basis who are seeking good help for their student loan troubles, only to get really bad advice, or worse, ripped off.more...

March 9, 2014

Debt Consolidation Scams To Avoid Regarding Student Loans

Debt consolidation sounds like a great idea to a young adult who has recently graduated from college or grad school, doesn’t have a job lined up yet, and their student loan payments are now coming due. For many students, loans are the only way they can pursue a college degree, which they feel is necessary in order to compete for a desirable career. more...

March 8, 2014

Private vs. Federal Student Loans: Different Rules, Different Collection Strategies

It’s a tempting prospect: the student loan market now represents the second-largest debt pool in the U.S., second only to home mortgages.more...

March 7, 2014

Sallie Mae Student Loan Horror Stories Bring a Slap on the Wrist

BOSTON (TheStreet) -- One in 10 borrowers defaulted on their federal student loans in the first two years after graduation, with one in seven defaulting in the first three years, the Department of Education reported last week. These defaults often lead to debt-collection methods including late fees and penalties and the garnishing of wages, federal tax refunds and even Social Security and disability payments.more...

February 27, 2014

Feds crack down on for-profit college ITT

The newly created Consumer Financial Protection Bureau took its first public action against the for-profit education industry with a lawsuit against ITT Educational Services for what investigators called "predatory lending."more...

February 25, 2014

Discover Financial Services Faces Student-Loan Probe

Discover Financial Services DFS -0.59% is facing a government probe over its student-loan business, the consumer lender said in a regulatory filing Tuesday.

The Consumer Financial Protection Bureau has issued Discover a civil investigative demand seeking documents and other information regarding the student-loan-servicing practices of Discover Bank, the company's banking subsidiary, the filing said.more...

February 24, 2014

Illinois AG investigating Sallie Mae and other student loan collectors

he massive student loan debt in America has now reached a staggering $1.2 trillion. Some students wonder if they’ll ever pay it off.more...

February 21, 2014

Debt collectors are gorging themselves on student loans

And until DC gets its act together, they can't be stopped

The cost of college is skyrocketing. The labor market is atrocious. Employers demand a college degree for pretty much any job these days. Yes, at this point, it has become commonplace to note the crushing burden of college debt (the total amount of which is now something like $1.2 trillion). But there's another side to this story that hasn't gotten as much play: the implications for debt collection.more...

February 20, 2014

Ready to pop: $1.2 trillion student loan bubble

With the $1.2 trillion student loan crisis accelerating, President Barack Obama gave a nod in his State of the Union speech to the millions of young Americans starting their adult lives in crushing debt but offered no new proposals for relief.more...

February 19, 2014

Bullet Points: Inside the 2014 Student Loan Borrowers' Bill of Rights Act

In the summer of 2013 the debate over the high level of student loans in this country reached a crescendo. In the absence of a bipartisan solution, rates for federal student loans doubled. A month later, thanks to media pressure, Congress was able to pass legislation reducing them slightly, but still devoid of any lasting legislative solution.more...

February 18, 2014

Surging Student-Loan Debt Is Crushing the System

Student-loan defaults surged in the first three months of 2013, while efforts to collect bad loans are faltering, according to credit analysts and government audits. It is the latest twist in a college debt crisis that is hanging over recent graduates and dragging on the broader economy.more...

February 17, 2014

Finally, a Law That Would Protect People From Student Loan Hell

The proposed Student Loan Borrower Bill of Rights Act would restore bankruptcy protections and other consumer safeguards for federal and private student loans.

Many well-intentioned graduates can't afford to pay off their student loans because of the sour economy. They are being sacked with debt and penalties that outweigh their best efforts to keep up. more...

February 6, 2014

How Can I Deal With My Private Student Loans?

I am currently only employed as a contracting social worker and make about 2,000 a month from which I pay about 700 in rent, 200 in miscellaneous bills, 400 in federal student loans and have an additional 33,000 dollars in private student loan debt which is now in collections.more...

February 1, 2014

Texas District 77: Candidate Lyda Ness-Garcia filed for bankruptcy included is $200,000 in student-loan obligations

The bankruptcy records touch on the candidate's long history of delinquently paying federal taxes and fines from the Texas Ethics Commission.more...

January 28, 2014

New York Times Investigative Report Focuses on Student Loan Guaranty Agency

The New York Times Thursday ran a lengthy investigative report on one of the largest student loan guaranty agencies in the country and their practices related to rare bankruptcy petitions to expunge student loans.more...

January 27, 2014

The Hard Truth About Defaulting On Student Loans

Skipping a student loan payment might seem like the easy way out — but it could be more trouble than it's worth. Guest host Celeste Headlee learns more from Sandy Baum at the Urban Institute, who says parents and even grandparents could end up on the hook.

HEADLEE: How big is this problem? How many people default on student loans every year?more...

January 26, 2014

Loan Monitor Is Accused of Ruthless Tactics on Student Debt

Stacy Jorgensen fought her way through pancreatic cancer. But her struggle was just beginning.

Before she became ill, Ms. Jorgensen took out $43,000 in student loans. As her payments piled up along with medical bills, she took the unusual step of filing for bankruptcy, requiring legal proof of “undue hardship.”more...

January 24, 2014

What are my options when dealing with a collection agency working for the U.S. Department of Education?

If you default on a federal student loan, a third-party collection agency may attempt to locate you and collect payments from you.more...

January 19, 2014

First, everyone should apply for direct loan consolidation.

Direct Loan Consolidation:
Most of us have loans from many different servicers. Even though I went to one school for my Master's Degree, my loans came from Sallie Mae, Nelnet, UASecho, and Chase. Direct Loan Consolidation takes all of your loans and consolidates them into one lender. This makes it easier to keep track of your payments, and your interest rate is just for that one, large loan.more...

January 17, 2014

3 Potential Student Loan Changes to Eye in 2014

Higher interest rates may be on the horizon for federal loans in the 2014-2015 school year.

Legislation signed by President Barack Obama in 2013 lowered student loan interest rates, but borrowers should expect rates to rise in 2014.more...

January 16, 2014

Repayment strategies for your student loans

The party is over for the class of 2013.

Students graduating from college enjoy a six-month grace period before they have to start repaying their loans. But for the latest crop of graduates, that period is now over, and those who have loans are figuring out how to pay them off.more...

January 15, 2014

U.S. Education Department’s Student Debt Collector Accused of Ruthless Tactics

The three words that might best describe the federal government’s student-loan debt collector are petty, incompetent and ruthless.more...

January 11, 2014

Loan Monitor Is Accused of Ruthless Tactics on Student Debt

Stacy Jorgensen fought her way through pancreatic cancer. But her struggle was just beginning.

Before she became ill, Ms. Jorgensen took out $43,000 in student loans. As her payments piled up along with medical bills, she took the unusual step of filing for bankruptcy, requiring legal proof of “undue hardship.”more...

January 4, 2014

Worrisome Spike in Student Loan Write-Offs

The dramatic rise in student loan volume is a worrisome trend for policymakers, but perhaps a more troubling one for banks is a big spike in write-offs (see chart 1).

Between January and August of last year, lenders wrote off $13.6 billion in student loan debt, a 46 percent increase from the same period of 2012 and the highest amount for this period in any of the last eight years, according to the data from Equifax (See chart 2).more...

December 29, 2013

2012 grads have highest-ever student debt

The college graduating class of 2012 is, on average, deeper in the hole with student loan debt than any class before. And graduates of Pennsylvania colleges -- state and private -- are more likely than graduates of other colleges nationwide to be burdened with student debt, according to data from the U.S. Department of Education and national surveys of colleges and college graduates.more...

December 26, 2013

Student Loan Default Protection May be Near

If your heart involuntarily jumps whenever you see “student loans” trending in the news with the hopes that well— maybe they’re finally ruling them away somehow…

Democratic senators Dick Durbin, Jack Reed, Elizabeth Warren and Barbara Boxer may soon become your new best friends.more...

December 23, 2013

You Can Still Save for Retirement When You Have Student Loans

If you have student loans, you already know they can be overwhelming. But as any responsible spender knows, they aren’t the only demand on your budget.

Along with rent or a mortgage, the day-to-day business of living and any credit card debt you have, there’s also saving for retirement, that period of 20 years—or far longer—during which you may need to live almost completely off the money you’ve saved.more...

December 22, 2013

Bureau will be powerful ally in the corner of student-loan borrowers in March

Got a problem with your student loan? Not sure where to turn when the company managing your payments isn’t responding to your complaints?

Come March you’ll have a powerful ally, because the Consumer Financial Protection Bureau will have supervisory authority over nonbank student-loan servicers.more...

December 21. 2013

‘Skin in the Game’ on Loans

WASHINGTON -- A group of Senate Democrats announced Thursday a new push to provide student loan borrowers with more protections and hold colleges more accountable for loan defaults.more...

December 15, 2013

Educational Opportunity? Globe University's Murky Student Loan Partnership With Debt Collection Agency

Recently, Jeff Myhre, CEO of the Globe Education Network, issued a statement in response to my article, Globe University: Profiteering off the Backs of Students and Taxpayers. In Jeff Myhre's response, he specifically takes issue with my pointing out that Globe Education Network schools and the Myhre family have profited off lending money to students at 18% interest, loans which they must use to pay for the schools' extremely high tuition.more...

December 14, 2013

Feds to monitor student debt collectors

Companies that collect and process student loan payments are about to be placed under the eyes of the federal government.

On Tuesday, the Consumer Financial Protection Bureau – a key creation of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010more...

December 10, 2013

Durbin pushing bill to ease struggle of repaying private student loans

U. S. Sen. Dick Durbin, D-Ill., said Tuesday he is introducing a bill when the Senate convenes next week to protect students from getting overwhelmed by private-loan payments that grow out of control without explanation.more...

December 8, 2013

Student loan forgiveness: What you don't know (but should)

The Consumer Financial Protection Bureau estimates that one-fourth of the American workforce may be eligible for repayment or loan-forgiveness programs, the Associated Press reported last month.

That's how many students tend to think about the thousands or -- in extreme cases -- hundreds of thousands of dollars they borrow in student loans over the course of their higher education.more...

December 5, 2013

Student-Loan Servicers Face Scrutiny

WASHINGTON—Companies that collect payments on student loans will face stepped-up government scrutiny next year as a federal regulator examines whether they are breaking any laws or treating borrowers unfairly.more...

November 30, 2013

Settle your student loan debt using this one weird trick

Settling student loan debt isn’t easy, but it can be possible — if you’re in exactly the right circumstances.

Troubled borrowers who can offer a substantial lump sum may be able to free themselves from years of wage garnishments, tax refund seizures and other collections efforts, according to student loan experts.more...

November 28, 2013

Tips for Dealing with a Debt Collector

1. Know how the collection process works. Why are you being contacted by a collection agency? It usually means that a creditor has not received payment from you for several months. They have negotiated with another company or are using an in-house affiliate called a debt collector to attempt to get you to pay.more...

November 27, 2013

Ranking the Highest Student Loan Default Rates in Central MA

See How Worcester colleges and post-secondary schools ranked for student loan default
The U.S. Department of Education recently released its annual student loan default data, and while the latest three-year default rate average for Massachusetts students at 8.5% is well below the national average of 14.7%, 7,531 Massachusetts students defaulted on their loans from the FY 2010 cohort.more...

November 26, 2013

The Education Department is Rolling in Revenue Thanks to Your Student Loans

For those of you struggling to make ends meet due to being thousands of dollars of debt from student loans, maybe you should think about it this way: at least you are helping out the Department of Education!

Financial reports from the 2013 fiscal year show that the Education Department has reaped $42.5 billion in profit from federal student loans in 2013. more...

November 21, 2013

I Defaulted on My Student Loans. Here’s What I Did to Get Back on Track

When I began taking out student loans for university, I had a fool-proof five-year plan for paying them off. I was going to go to graduate school, become an elementary school teacher, work in a high-needs public school for five years, and have the rest of my federal debt forgiven. Simple. If I stuck with the plan, I didn’t need to worry about those loans at all.more...

November 17, 2013

USA Funds prevents $22.3 billion in student loan defaults

INDIANAPOLIS, Nov. 5, 2013 (GLOBE NEWSWIRE) -- USA Funds® reports that it prevented $22.3 billion in defaults on nearly 1.2 million past-due federal student loan accounts during the fiscal year ending Sept. 30. USA Funds' default prevention efforts succeeded in averting default on 93 percent of loan accounts on which payments were reported by the lender as being 60 days or more past due.more...

November 16, 2013

National Collegiate Student Loan Trust sues to collect delinquent student loan

A student loan trust sues to collect an unpaid student loan from two Port Arthur residents.

National Collegiate Student Loan Trust 2007-3 filed a lawsuit Oct. 31 in the District Court of Jefferson County 136th Judicial District against Arlesia Carrier and Willie Carrier, citing breach of contract. lsc pamore...

November 13, 2013

New rules ease rehabilitation of defaulted student loan

In a September column, I discussed the three major ways to get out of default on a student loan: repayment, consolidation and rehabilitation. Of the three, rehabilitation is the only way to have a default removed from your credit report. It involves making a series of on-time payments. I described it as a "lengthy process full of red tape."more...

November 9, 2013

New Student Loan Rules Add Protections for Borrowers

If you are a former student having trouble paying back college debt, you may be relieved to hear that the Education Department has created new rules that will bolster borrower protections for federal education loans.more...

November 7, 2013

Why it's so hard to settle student loan debt

Settling student loan debt isn't easy, but it can be possible — if you're in exactly the right circumstances.

Troubled borrowers who can offer a substantial lump sum may be able to free themselves from years of wage garnishments, tax refund seizures and other collections efforts, according to student loan experts.more...

October 31, 2013

Five Ways Student Debt Resistance Is Taking Off

On September 9, Sallie Mae became the 50th corporation tocut ties with the American Legislative Exchange Council—and the first to do so under pressure from students.more...

October 31, 2013

Student Loan Default Rates Rise for Sixth Year

New data show more than 600,000 borrowers have defaulted on their loans in the last few years

The number of borrowers who defaulted on their student loans two and three years after entering repayment have continued to increase in the last several years, according to new data released Monday by the Department of Education.more...

October 30, 2013

Defending Against National Collegiate Student Loan Trust Lawsuits

National Collegiate Student Loan Trust is suing consumers across the country for past due private student loans. National Collegiate Student Loan Trust is not a lender but is a Delaware Trust that holds private student loans guaranteed by TERI rather than by the federal government.more...

October 28, 2013

RI student loan default rate hits 12.8%; second-worst in New England

PROVIDENCE, R.I. (WPRI) – Rhode Island has the second-highest student loan default rate in New England, but remains well-below the national default rate of 14.7%, according to data released Monday by the U.S. Department of Education.more...

October 27, 2013

As loan repayment nears, students warned to guard against default

The first student loan payment date is quickly approaching for students who graduated from college in May.more...

October 24, 2013

Student Loan Default Rate Up for 6th Consecutive Year

The percentage of graduates that default on federal student loans has risen for the sixth year in a row, the U.S. Department of Education announced in early October.more...

October 17, 2013

Managing College Student Finances at a Credit Union

Despite his best of intentions, University of Florida junior Tyler Reeves ended up hitting his own personal debt ceiling, maxing out his credit card and emptying his bank account--and it’s only October.more...

October 15, 2013

Student Loan Defaults Surge To Highest Level In Nearly 2 Decades

Recent college students are defaulting on federal loans at the highest rate in nearly two decades, reflecting "crisis" levels of student debt and a lackluster economy that leaves graduates with bleak employment prospects.

One in 10 recent borrowers defaulted on their federal student loans within the first two years, the highest default rate since 1995, according to annual figures made public Monday by the Department of Education.more...

October 11, 2013

Sallie Mae accused of mistreating student veterans

The student loan company Sallie Mae is under investigation for allegedly violating federal laws protecting student veterans.

The company is accused of excessive interest charged on veterans’ student loans despite clear legislation prohibiting such practices.more...

October 6, 2013

Globe University students sue, claiming they were misled about jobs

Five former and current students at Woodbury-based Globe University have filed a class-action lawsuit alleging the school misled them about their post-graduation prospects.

The suit in Hennepin County District Court comes after a jury awarded a former Globe dean almost $400,000 in an August whistleblower trial. The dean, Heidi Weber, alleged Globe fired her after she raised concerns about the for-profit school's student recruitment practices, among other issues.more...

September 30, 2013

The Parent Loan Trap

More than a decade after Aurora Almendral first set foot on her dream college campus, she and her mother still shoulder the cost of that choice.

Ms. Almendral had been accepted to New York University in 1998, but even after adding up scholarships, grants, and the max she could take out in federal student loans, the private university—among the nation’s costliest—still seemed out of reach.more...

September 28, 2013

Obama Wants to Halt Soaring Student Loan Default Rates

This past August, President Barack Obama took to the road to speak publicly about the need to control college costs. Embedded in his new plan -- which includes ranking colleges and universities according to their success at launching students into the working world -- is the acknowledgement that student loan defaults are skyrocketing.more...

September 26, 2013

Common Defenses to Student Loan Lawsuits

If you default on a student loan and the creditor files a lawsuit seeking payment, you may have a defense to the lawsuit. If one of the below defenses applies in your situation, you may not have to pay the student loan debt. However, you must raise any applicable defense in a formal response to the lawsuit, otherwise you will most likely lose the chance to defend yourself.more...

September 24, 2013

Financial column: Understanding student loans

Last week, I gave a presentation on credit to a class of roughly 20 individuals and was surprised to find that the majority did not know the specifics of their student loans. Furthermore, not one student was able to explain the difference between a subsidized and an unsubsidized loan. I did some digging and realized this trend holds true for students across all regions and colleges. A study conducted by Iowa State University released in May 2012 revealed that one in eight students with college loans do not actually know they have debt until they graduate. That is a very scary concept.more...

September 21, 2013

For All Our Good, Let Student Debtors Go Bankrupt

BOSTON (TheStreet) -- We've all heard the figures: Student loan debt in the United States now exceeds $1 trillion dollars, surpassing our nation's collective credit card debt.

Yet, unlike our credit card debt -- or any other debt, for that matter -- student loans for the most part cannot be discharged in bankruptcy. A report released in August by the Center for American Progress, though, calls for that to change.more...

September 15, 2013

Student Loan Debt: The Bottomless Pit of Our Generation

Rodney Johnson, Senior Editor of “Survive & Prosper,” a newsletter from the economic research firm Dent Research, calls student loans the “worst business idea” of the decade. According to his findings, he could be right. As of right now, America has 1.2 trillion in student loan debt, and this debt is rising dramatically.more...

September 14, 2013

Even Ivy Leaguers default on student loans

How the top-ranked schools fare when it comes to student debt

The latest college rankings by U.S. News & World Report are out, and Princeton University once again tops the list. But is the New Jersey Ivy League school the smartest financial move for the nation’s smartest students?

One data point to consider is the rate at which graduates default on student loans, a commonly cited barometer and one that’s been embraced by the federal government.more...

September 12, 2013

Parent can’t pay old school debt

A federal law established to protect student records stands like a brick wall between an elderly Raytown woman and her daughter’s nearly 30-year-old student debt.

Mom says she just wants to do the right thing: Find out exactly what her daughter still owes for the education she got in the mid-1980s and pay off those pesky loans, one at a time and once and for all.more...

September 10, 2013

Student loan forgiveness: What you don't know (but should)

Emily Atteberry, USA TODAY 7:19 a.m. EDT September 7, 2013
The Consumer Financial Protection Bureau estimates that one-fourth of the American workforce may be eligible for repayment or loan-forgiveness programs, the Associated Press reported last month.

If you just don't think about them, they're not real­ -- right?more...

September 5, 2013

Parents face the student loan double whammy

At age 51, Charlene Rose had hoped to be socking away money for retirement by now. But instead, she's still paying off her student loans, largely for a master's degree she got to advance her career. And now she's got three kids in college, each of whom is taking out student loans of their own to pay for higher education.more...

August 31, 2013

8 Cringeworthy Allegations From The New Lawsuit Against Donald Trump

New York is suing Trump University for alleged fraud.

Until this weekend, when the suit was announced, most of us were probably unaware that there was such an institution.

But for more than 5,000 Americans, it was a very real organization that NY Attorney General Eric Schneiderman says collectively cost them $40 million.more...

August 30, 2013

How bankruptcy could help solve the student loan crisis

This week, President Barack Obama introduced a proposal that would give colleges federal money based on performance and affordability for students. Such measures, Obama said, would require accountability at institutes of higher education across the country in an effort to curb the escalating costs of student loans.more...

August 28, 2013

Student Loans Will Haunt You to the Grave

We’ve devoted considerable space on this blog documenting the ways in which student debt prevents young people from beginning their lives as adults. A study from Demos, for example, finds that among college graduates, those without student debt are more likely to own a home and enjoy lower interest rates on their mortgages. But the effects of debt can also linger into older adulthood, even when the loans are paid off: the study found that debt-free grads build up a hefty $208 thousand more in wealth over the course of their lifetime. Time breaks down the reasons why:more...

August 23, 2013

Student loan default rates soar in Colorado

Alicia Evangelista, 30, who racked up more than $30,000 in student loan debt from CollegeAmerica, was at her Denver home Monday with her associate degree and student loan papers. "I'm trying my best, but it's hard," said Evangelista, who just pulled herself out of default. She said none of her credits will transfer toward the degree she needs to become a registered nurse.more...

August 20, 2013

Ex-dean wins whistleblower lawsuit against Globe University

Heidi Weber accused the for-profit school of dismissing her for exposing unethical practices.

A jury has ordered Globe University in Woodbury to pay $395,000 to a former dean who said she was fired for complaining about unethical practices at the for-profit school.more...

August 16, 2013

10 Questions for a Student Loan Consultant

Ever since he was a kid, John Smith knew that his calling was in medicine. But while Smith didn’t have to struggle with the ubiquitous “What am I going to do with the rest of my life?” question, the newly minted M.D. has struggled to pay off his high-interest-rate student loans.

The problem? Although Smith never missed a payment on his student loans, he was frequently unable to make the entire monthly minimum payment.more...

August 14, 2013

How The $1.2 Trillion College Debt Crisis Is Crippling Students, Parents And The Economy

Total Student Loan Debt: $1 Trillion

Two-thirds, that’s right, two-thirds of students graduating from American colleges and universities are graduating with some level of debt. How much? According to The Institute for College Access and Success (TICAS) Project on Student Debt, the average borrower will graduate $26,600 in the red.more...

August 13, 2013

The curse of student loan debt: owe while you're young, live when you're old

Student debt and dead-end jobs have put many young Americans in dire circumstances outside their own control

Once upon a time, we invested in our young people so that they could enter the world without debt. Now, we turn them into deadbeat debtors before they're old enough to legally buy a drink, left far behind their financial betters.more...

August 8, 2013

How The $1.2 Trillion College Debt Crisis Is Crippling Students, Parents And The Economy

Two-thirds, that’s right, two-thirds of students graduating from American colleges and universities are graduating with some level of debt. How much? According to The Institute for College Access and Success (TICAS) Project on Student Debt, the average borrower will graduate $26,600 in the red. While we’ve all heard the screaming headlines of graduates with crippling debt of $100,000 or more, this is the case for only about 1% of graduates. That said, one in 10 graduates accumulate more than $40,000.more...

August 7, 2013

Former college student failed to repay loans, lawsuit says

The National Collegiate Student Loan Trust has filed suit against the Beaumont woman who it claims failed to repay her student loans.

It claims it lent defendant Janet Nichols money, which she was supposed to repay in a series of payments beginning after a deferral period. However, it has received none of the money from Nichols, despite its written requests, according to the complaint filed July 16 in Jefferson County District Court.more...

July 31, 2013

U.S. Bank, Affiliated Computer Services, NextStudent Facing Class Action Lawsuit Over Student Loans In New York

A new federal class action lawsuit claims three student loan lenders and servicers aimed to keep borrowers trapped in debt.more...

July 29, 2013

Default on a Student Loan? What to do

Earlier this month, the Senate rejected a proposal to reset interest rates on student loans to their pre-July 1 level of 3.4% instead of doubling to 6.8%. Now, lo and behold, another group of Senators is trying to push through a compromise whereby undergraduates with Stafford loans would pay an interest rate of 3.85% next year. Either way, those with higher education loans are in dire straits.more...

July 26, 2013

Dealing with a debt collector? Tips for borrowers

Debt collection can be an unpleasant business, but it's a big one.

The industry generates $12.2 billion in revenue for the roughly 4,500 firms chasing down borrowers who owe money on credit cards, auto loans and other accounts, according to figures from the Consumer Financial Protection Bureau.more...

July 23, 2013

Arrested development courtesy of student debt: How student debt is putting the lives of many young Americans on hold.

Many young Americans view student debt as a necessary evil in pursuing higher education. The level of student debt now reaches Himalayan levels as many are falling behind on keeping up with payments. A double-edged sword has befallen young Americans. First, the path to middle class jobs no longer runs through a blue collar industry (as I’m sure Detroit would testify to this fact). Second, the required skills for middle class jobs (i.e., healthcare, engineering, sciences, etc) run through formal education for better or worse.more...

July 18, 2013

$13 million awarded in lawsuit against Vatterott College

Jennifer Kerr finally feels vindicated.

The Lee’s Summit single mother was looking for a way to improve her family’s future in 2009 when she decided an education at Vatterott College would be her key.

Like thousands of others, Kerr, who was then living partially on state assistance, had seen Vatterott’s ads on television.more...

July 15, 2013

Forever in Student Debt?

SAN DIEGO (MainStreet)—Massive student loan debt is having a profound impact on twenty- and thirty-somethings, including delaying the ability among both generations to build any wealth and causing anxiety among borrowers of all income levels about whether the loans can be repaid.more...

July 12, 2013

How do student loans affect you?

A plan to lock in the subsidized 3.4 percent rate for another year for one type of federal student loan commonly used by undergraduates failed in the Senate Wednesday on a procedural vote. Lawmakers continue to negotiate the issue.

These federal Stafford loans have been subsidized at a rate of 3.4 percent by the government for the past two years, but on July 1, the rates doubled to 6.8 percent. While these changes don’t affect all students, loan debt remains a pressing concern for many students and recent graduates.more...

July 10, 2013

Student loan defaults can beat college grad rates

Schools with this issue 'should set off a red flag,' researcher says

Tens of thousands of Oregon students attend colleges where borrowers are more likely to default on a loan than full-time freshmen are to earn a degree, an analysis of federal data shows.more...

July 5, 2013

Interest Rates Rise On Student Loans Despite Increase In Defaults

PHILADELPHIA (CBS) — Interest rates on new federally subsidized Stafford loans were set to double Monday after Congress failed to act before the deadline. That means more debt for college students.

Right now, there is $1.2 trillion in federal student loan debt in the United States and the default rate is on the rise. Doctor Wesley Leckrone, professor of political science at Widener University, says graduating, but being underemployed means students can’t pay back loans. But there’s something worse.more...

July 4, 2012

Student Loan Debt Statistics

Here are some important facts about the state of student loans in the United States today:

How many Americans borrow/have borrowed for college?
* Nearly 20 million Americans attend college each year. (Source: Chronicle of Higher Education)
* Of that 20 million, close to 12 million – or 60% - borrow annually to help cover costs. (Source: Chronicle of Higher Education)More...

June 29, 2013

The student loan debt perfect storm

With Congress and the Obama administration focused on Monday’s deadline to prevent student loan interest rates from doubling, it is an apt time to examine the larger consequences of America’s staggering student loan debt load. Even as mortgage, credit card and other consumer debt levels have decreased, today’s students carry unprecedented — and growing — debt burdens. With outstanding student loan debt in the first quarter of 2013 totaling a record $986 billion, the impact on individuals is disturbing. But add to that the fact that this debt load threatens the nation’s very ability to compete in the global economy, and you have the makings of a national crisis.More...

June 28, 2013

Student loan rates will spike on Monday after Senate fails to reach agreement

WASHINGTON — Student loan interest rates will go up on Monday, after the Senate recessed Thursday evening without reaching a compromise to avert the hikes.

After Senate Majority Leader Harry Reid rejected a bipartisan compromise agreement that he termed the “Republican” plan, in spite of support from Democratic Sen. Joe Manchin and Independent Sen. Angus King, Democrats released their own plan: a one-year extension of the current rates to give them time to craft a solution to the larger problem of student loan debt.More...

June 26, 2013

Jury Awards Former Student $13 Million In Lawsuit Against For-Profit College

One of the more common complaints against for-profit colleges is that the institutions make promises to prospective students about job placement and salary that the schools don’t make good on. A woman in Missouri recently sued one such for-profit school, saying it misled her about its medical assistant program. She had been seeking somewhere between $2-4 million in damages, but the jury went ahead and awarded her $13 million.
The plaintiff had originally enrolled at Vatterott College, which has 19 campuses in 9 states, with the understanding that she was in the school’s medical assistant program. She said the school told her it was a fast-track to an eventual nursing degree and that the medical assistant certification alone would land her a job earning $15-17/hour.More...

June 21, 2013

Supreme Court Ruling in Student Loan Case May Discourage Lawsuits

In a case involving a student loan collections dispute, the U.S. Supreme Court issued a ruling in favor of a debt collector, the ABA Journal reports.

This ruling, which awarded court costs to the debt collector, could potentially send a powerful message to the little guy: Don't sue your debt collector, no matter how much they allegedly harass you.More...

June 19, 2013

Student Loan Repayment Tips for College Dropouts

Nearly 50 percent of students leave college without a degree, but many still pile up student debt.

Dropouts are four times more likely to default on their student loans than those who finish college, experts say.

College isn't always a walk in the park. Many students struggle through, stretching their four-year plan into a six-year one. Many more never make it that far.More...

June 15, 2013

Surviving Student Loan Default

Bankruptcy proceedings a viable option

Rising student loan delinquencies have become worrisome, with banks writing off $3 billion in student loan debt during the first two months of this year alone. By February, about 850,000 students had defaulted on their loans in 2013, according to a March article on the website.More...

April 14, 2013

Lawsuit over Michigan student loan program moves to federal court as borrowers seek class-action status

LANSING -- A pair of student loan borrowers who were being sued by the Michigan Finance Authority in connection to a now-defunct interest rate reduction program have filed a counter-claim in federal court.More...

May 11, 2013

Jefferson County women sued for alleged failure to repay student loans

The National Collegiate Student Loan Trust has filed two suits against two Jefferson County women who it claims failed to repay the more than $30,000 in student loans they each borrowed. student-loan-debtMore...

June 6, 2013

Students Seek To Enforce Zero-Percent Student Loan Contracts Against Michigan Finance Authority In New Federal Lawsuit

Two student loan borrowers who were eligible for the zero-percent interest contractual benefit known as “Michigan Students First” filed a class-action counterclaim against the Michigan Finance Authority (MFA) in federal court. The students are being represented by Hank Law in Lansing, Michigan and other law firms located in Michigan and California. More...

June 4, 2013

Student Loans

Understanding Bankruptcy

In the United States, there are two types of student loans. “Government student loans” are those that are issued or guaranteed by the federal government. Examples are Direct Loans, Perkins Loans, and Stafford Loans. “Private student loans” are made by nongovernment lenders, such as banks or Sallie Mae (a large, private student loan company).More...

May 31, 2013

Student Loans -- Do Criminals Have More Rights?

Student lenders have collection powers denied most creditors. Credit card companies can't garnish your wages without a court order. A federal student loan collector can garnish your wages just by sending a notice in the mail to your employer. Credit card companies can't sue you after the statute of limitation has expired. Even IRS debt has a ten year time limit on collection and can often be discharged in bankruptcy. Student loans used to have a five year statute of limitation, then seven years, before Congress eliminated it altogether. Common criminals like burglars and arsonists are protected from prosecution by a statute of limitations. Murderers, kidnappers, federal student loan borrowers and the like -- you know, society's worst offenders -- have no statute of limitation. They can be taken to court until the day they die.More...

May 28, 2013

Student Loan Problems: One Third Of Millennials Regret Going To College

Here’s an indication of how burdensome student loans have become: About one-third of millennials say they would have been better off working, instead of going to college and paying tuition.

That’s a according to a new Wells Fargo WFC +0.7% study which surveyed 1,414 millennials between the ages of 22 and 32. More than half of them financed their education through student loans, and many say the if they had $10,000 the “first thing” they’d do is pay down their student loan or credit card debt.More...

May 24, 2013

Common Defenses to Student Loan Lawsuits

If you are sued for nonpayment of a student loan, you might have a defense to the lawsuit.

If you default on a student loan and the creditor files a lawsuit seeking payment, you may have a defense to the lawsuit. If one of the below defenses applies in your situation, you may not have to pay the student loan debt. However, you must raise any applicable defense in a formal response to the lawsuit, otherwise you will most likely lose the chance to defend yourself.More...

May 23, 2013

Kirsten Gillibrand Aims To Jumpstart Student Loan Refinancings With New Bill

Debtors with high interest rates on their federal student loans would refinance into cheaper loans under proposed legislation to be unveiled this week, in a move that would lower borrowers’ burdens and potentially hurt private lenders and investors.

The plan sponsored by Sen. Kirsten Gillibrand (D-N.Y.) would force the U.S. Secretary of Education to automatically refinance most government loans carrying interest rates above 4 percent into fixed, 4-percent loans. Roughly nine of 10 federally-backed loans would be affected, saving nearly 37 million borrowers billions of dollars in annual interest payments.More...

May 16, 2013

Obama Student Loan Policy Reaping $51 Billion Profit

The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation's most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.More...

May 14, 2013

Supreme Court Ruling in Student Loan Case May Discourage Lawsuits

In a case involving a student loan collections dispute, the U.S. Supreme Court issued a ruling in favor of a debt collector, the ABA Journal reports.

This ruling, which awarded court costs to the debt collector, could potentially send a powerful message to the little guy: Don't sue your debt collector, no matter how much they allegedly harass you.More...

May 10, 2012

Bankruptcy May Become a Way Out of Student Loan Debt

While students get breaks on their loans in some ways, filing bankruptcy has never been one of them. But if a federal appellate opinion and action in Congress are any indicators, that could be changing.More...

May 9, 2013

Elizabeth Warren: Students should get the same loan rate as big banks

Sen. Elizabeth Warren introduced her first bill, a simple proposal to give students the same loan rates as the nation's biggest banks. Her proposal would allow the cut-rate loans for students for one year, to give Congress the time to come to agreement on a long-term solution to interest rates. Federal Stafford subsidized loan rates for new students are set to double on July 1 to 6.8 percent.
Here's a snippet from her floor speech introducing the billMore...

May 7, 2013

The Debt Collector Lied I Could Settle My Private Student Loan Debt

The background information is something like this: I went delinquent on a student loan (private) after a period of financial hardship.

It defaulted and went over to NCO Financial for debt collections. I wasn't sure how the whole process worked at the time, and I started a payment plan. My agent at NCO was named John and would call every month after the 15th to get a monthly payment. He seemed cordial enough..More...

May 4, 2013

Supreme Court Ruling in Student Loan Case May Discourage Lawsuits

In a case involving a student loan collections dispute, the U.S. Supreme Court issued a ruling in favor of a debt collector, the ABA Journal reports.More...

April 29, 2013

Colleges sue students over unpaid loans

About 5 percent of University students defaulted on Perkins loans in 2010-11.

As student debt rises, some schools nationwide are withholding degrees from graduates who default on federal loans.More...

April 24, 2013

Student debt worries? Options for paying it off

Opening up the mailbox to find those long-awaited college acceptance letters is one of the high points for high school seniors. Incurring student loan debt, however, is the reality for millions of these young students who need a way to finance their education.

According to a TransUnion study, student loan balances increased a whopping 75% from 2007 to 2012. The average debt per borrower increased by 30% to $23,829.More...

April 23, 2012

The Shame of Student Loans

There is more student loan debt outstanding -- $1 Trillion -- than credit card debt! And the government is making a huge profit on it -- an estimated 36 percent profit margin.

Here's the real shame: The government gets to borrow for 10 years paying less than 2 percent interest on U.S. Treasury notes, while students must pay 6.8 percent interest on the loans they get from the government!More...

April 20, 2013

First Three Months Of 2013 Were Worst On Record For Student Loan Defaults

Student loan debt is already reaching crisis levels in the United States, as borrowers are struggling to pay back the money they used to obtain higher educations. Borrowers were already defaulting on their debts in record numbers heading into this year, and the first three months of 2013 were the worst on record for loans going bad, CNBC reports:More...

April 17, 2012

US student loan debt by the numbers

Some essential facts and figures on the state of student loan debt in America that everyone should know

Amount of student debt owed in the US: $1 trillion

* Number of student loan borrowers in the US: 37 millionMore...

April 14, 2012

State sues Brockton for-profit school over ads

The state is suing a Brockton for-profit school, saying it falsely promised to train graduates for well-paying positions in the medical industry, made misleading claims about job-placement success rates, and left many students mired in debt.

Sullivan & Cogliano Training Centers Inc. advertised that 70 percent to 100 percent of its graduates landed jobs in a medical office, when less than 25 percent of graduates actually found that type of work, Attorney General Martha Coakley’s office said in a complaint filed in Plymouth County Superior Court Wednesday.More...

April 10, 2012

Plan to Discharge College Student Loans through Bankruptcy Avoids Real Issues

Senator Dick DurbinHigher education debt suddenly has become one of the nation's hottest domestic issues. In response, a number of lawmakers believe they have a way to preserve both the integrity of the financial system and the opportunities to attend college. Several weeks ago the House and Senate introduced legislation to enable adults to discharge outstanding student loans in bankruptcy court that had been underwritten by private-sector lenders. The bills, the Fairness for Struggling Students Act (S.114) and the Private Student Loan Bankruptcy Fairness Act (H.R. 532), would repeal the portion of the 2005 bankruptcy law overhaul that removed this option. Sen. Dick Durbin, D-Ill. (in photo), declared in late January, "We can no longer sit by while this student debt bomb keeps ticking." Yet the details lead the conclusion that the legislation would enable irresponsible lending more than curb it. More...

April 8, 2012

Student loans default rate ticking upward

HOUSTON (KTRK) -- There's alarming information surfacing about college student loans. The default rate is the highest it has been in 17 years. But why? And What you can do to avoid becoming one of the statistics?

When the payments, interest and tight due dates became too much for Steve's son to handle, the father was forced to take over the student loan payments. He had cosigned and didn't want it to go into default, tanking both their credit ratings.More...

April 5, 2013

Student loan debt collectors may lose out on commission rates

Private collection agencies and the U.S. Department of Education remain unclear about the specifics on their new contract conditions that began in March to limit private debt collection agency commissions.

According to a representative of the U.S. Department of Education, who wished to remain on background, private debt collectors may now receive a smaller commissions on defaulted federal student loan borrowers they persuade to make loan payments.More...

April 2, 2013

2.5% of Ohio State students default on loans

OSU President E. Gordon Gee said less than 1 percent of OSU students with loans default on their debt in an interview with The Lantern on March 25.

Ohio State students have a lower rate of loan default compared to students at other nationwide universities.

OSU President E. Gordon Gee said a lower than average number of OSU students default on their debt.More...

March 29, 2013

Surging student-loan debt is crushing the system

Student-loan defaults surged in the first three months of 2013, while efforts to collect bad loans are faltering, according to credit analysts and government audits. It is the latest twist in a college debt crisis that is hanging over recent graduates and dragging on the broader economy.

Credit-rating firm Equifax said $3.5 billion in government and private student loans went bad in the first three months of 2013, the most since the company began keeping track. The U.S. Department of Education said 6.8 million federal student loan borrowers are now in default, representing $85 billion in debt. And the department's systems for collecting the bad loans are struggling to keep up.More...

March 28, 2013

Obama Cuts Student-Debt Collector Commissions to Aid Borrowers

President Barack Obama’s administration slashed the commissions paid to private collection companies that chase overdue student loans, reducing an incentive to squeeze borrowers.

Previously, the U.S. Education Department paid a commission as high as 16 percent of the entire loan amount only if collectors convinced defaulted borrowers to make stiff monthly payments. Starting this month, the fee dropped as low as 11 percent, no matter the payments’ size, according to a copy of a new contract obtained under the U.S. Freedom of Information Act.More...

March 25, 2013

You Might Want To Think Twice About Suing Your Student Loan Company

The U.S. Supreme Court handed down a ruling Tuesday that could stop indebted grads from taking their student lenders to court, the Wall Street Journal reports.

The high court ruled that Olivea Marx had to pay Sallie Mae subsidiary GRC $4,543 on top of all the student loan money she already owes the company.More...

March 19, 2012

Attorney general supports federal bill to curb college recruiting abuses

FRANKFORT, Ky. (March 18, 2013) — Attorney General Jack Conway supports a federal bill aimed at restricting institutions of higher learning from using federal financial aid for recruitment, advertising and marketing purposes.
College can be a costly endeavor.

College can be a costly endeavor. Kentucky Attorney General Jack Conway publicly announced his support Friday of a federal bill aimed at restricting institutions of higher learning from using federal financial aid for recruitment, advertising and marketing purposes.More...

March 17, 2013

HBCUs Threaten to Sue Obama Administration Over Federal Loan Changes

The Obama administration may be the target of a lawsuit by the nation’s historically black colleges and universities (HBCUs), stemming from new federal financial aid policies that disproportionately affect students at the majority black institutions.

The new policies raised the criteria for parents trying to secure PLUS loans for their children’s education, subsequently making a large number of black parents ineligible.More...

March 11, 2013

Student Loan Debt Makes Top 10 Consumer Complaint List in Illinois

Attorney General Lisa Madigan today released her annual top 10 list of consumer complaints for 2012 in recognition of National Consumer Protection Week.

Madigan’s Consumer Protection Division received 26,316 complaints in 2012. Consumer debt was the top concern among Illinoisans for the fifth consecutive year, reinforcing the financial challenges that continue to plague Illinois residents amid economic uncertainty.More...

March 10, 2013

Colleges Sue Former Students for Defaulted Loans

While many graduates struggle to stay on top on monthly student loan payments, some are finding that defaulting on certain loans can have litigious results.

Bloomberg reports that disadvantaged borrowers have defaulted on almost $1 billion in Perkins loans, a program designated for students with serious financial need, and schools such as Yale University, the University of Pennsylvania and George Washington University have sued former students over nonpayment. More...

March 6, 2013

Members of Congress Report Large Student Loan Debts

A new report by the Center for Responsive Politics states that 46 Senators and House representatives have student loan debt.

According to 2011 financial disclosure forms, each member listed student loan debt as a liability. The debts, for themselves or their children, add up to a total ranging between $1.8 million and $4.3 million. Exact amounts are unknown because Congressional members are allowed to report debts in ranges.More...

March 4, 2013

Universities File Suit over Unpaid Student Loans

Student loan borrowers are used to creditor calls, but what happens with the university itself comes after you?

George Washington University (GWU), Yale University, and the University of Pennsylvania (UPenn) have all filed recent lawsuits against former students who defaulted on their Perkins loan payments.

One student is Kyle Lopinto who owes the University of Pennsylvania $7,000 in Perkins loans and $15,607 in unpaid tuition and legal fees. The case, University of Pennsylvania v. Lopinto, was filed in November 2012.More...

February 28, 2013

Rate of lawsuits against delinquent student loans in eastern Michigan among nation's highest

People who are delinquent on paying student loans from the eastern part of Michigan have one of the highest chances of being taken to federal court to recoup payments, the Detroit Free Press reported Sunday. More...

February 27, 2013

A new federal class action lawsuit claims three student loan lenders and servicers aimed to keep borrowers trapped in debt.

Cindy Breitman filed a lawsuit in a Manhattan Federal Court this week against Affiliated Computer Services (ACS), a student loan servicer; NextStudent, a student loan lender; and U.S. Bank, Courthouse News reports. She's seeking class certification and treble damages for breach of contract.More...

February 25, 2013

US student loan lawsuits increase

The federal government is expanding its lawsuit campaign to recover the $76 billion of the $1 trillion of student debt that is in default, defined as 270 or more days without a payment. Private law firms are being hired under lucrative contracts, some granting the forms 25 percent or more of what is recovered, to hunt down those in default using mail, phones and house calls. This is part of a general program of the federal government to collect delinquent civil debts.More...

February 21, 2012

Troops get $2.3M in Citibank student loan deal

A Minnesota National Guard officer has won a $2.3 million settlement for herself and thousands of other troops in a class-action lawsuit against Citibank and The Student Loan Corporation.

Maj. Lyndsey M.D. Olson challenged the way Citibank administered the student loans of service members who were entitled to an interest-rate reduction to 6 percent under the Servicemembers’ Civil Relief Act. She gets about $7,500 of that $2.3 million as the representative plaintiff in the lawsuit; the rest goes to other service members identified as being affected by the alleged actions.More...

February 19, 2012

Schools Suing Graduates for Defaulting on Loans

As more college graduates default on their student loans, some schools are taking drastic measures to ensure repayment. According to a Bloomberg report, Yale, the University of Pennsylvania and George Washington University have taken defaulters to court in recent years to try to force them to pay up.More...

February 18, 2012

CFPB to Investigate Financial Products Aimed at College Students

The Consumer Financial Protection Bureau is launching an inquiry into the impact of financial products marketed to students through colleges and universities. It will then determine whether these arrangements are in the best interest of students.

"We have seen many colleges establish relationships with financial institutions to offer banking services to their students," said CFPB Director Richard Cordray. "The Bureau wants to find out whether students using college-endorsed banking products are getting a good deal."More...

February 14, 2013

CFPB to Investigate Financial Products Aimed at College Students

The Consumer Financial Protection Bureau is launching an inquiry into the impact of financial products marketed to students through colleges and universities. It will then determine whether these arrangements are in the best interest of students.

"We have seen many colleges establish relationships with financial institutions to offer banking services to their students," said CFPB Director Richard Cordray. "The Bureau wants to find out whether students using college-endorsed banking products are getting a good deal."More...

February 12, 2012

RI student loan default rate second-worst in New England

11.2% have defaulted since 2009

PROVIDENCE, R.I. (WPRI) - More than 2,000 people who attended Rhode Island colleges and started repaying their student loans in 2009 have already defaulted, according to a analysis of federal data.More...

February 9, 2012

2 Ivies sue alums over student loan default

Students defaulted on $964 million in school-administrated Perkins loans in the year ending June 2011, up 20 percent from five years before. That's reportedly led some schools to file lawsuits against former students who defaulted on their student loans.

Bloomberg reports three universities, including two in the Ivy League, have sued former students: Yale University, the University of Pennsylvania, and George Washington University have all sued former students over nonpayment of Perkins loans – a category that often goes to the neediest students. While most student loans are distributed and collected by the U.S. government, Perkins loans are administered by the colleges themselves.More...

February 9, 2012

Yale Suing Former Students Shows Crisis in Loans to Poor

Needy U.S. borrowers are defaulting on almost $1 billion in federal student loans earmarked for the poor, leaving schools such as Yale University and the University of Pennsylvania with little choice except to sue their graduates.

The record defaults on federal Perkins loans may jeopardize the prospects of current students since they are part of a revolving fund that colleges give to students who show extraordinary financial hardship.More...

January 30, 2012

Student Loan Delinquency Rate Jumps 22 Percent

The student loan industry faces a triple threat with wider economic implications.

The student loan industry – issuer of more than $1 trillion in unsecured debt - faces a triple threat with far reaching implications, according to a report released today by FICO Labs. Heavier borrowing, lower credit ratings among borrowers and rising student loan delinquency rates could ultimately burden U.S. taxpayers and slow economic growth.More...

January 25, 2012

The Truth about Student Debt

In 40 percent of cases where a student loan debtor sought forgiveness of their loans as part of a bankruptcy case, the judge granted at least some relief. Only 0.1 percent took the bait.

There are a few ready talking points when discussing the student-loan crisis: the collective $1 trillion burden of debt, how student debt is now larger than credit card debt in this country, the fact that the 90-day delinquency rate spiked to 11 percent last year, meaning over one in ten borrowers are behind on their payments—all facts that don’t give much hope to those with loans, or those trying to resolve the financial crisis.More...

January 23, 2013

Local woman sued by National Collegiate Student Loan Trust

The National Collegiate Student Loan Trust claims a Jefferson County resident has failed to pay back the money she incurred when borrowing money for college. college-grad-cap

The Trust filed a lawsuit Jan. 10 in Jefferson County District Court against Kathy Morris and Robert Marshall.More...

January 19, 2013

Class action lawsuit launched against government over missing student loan info

A Newfoundland lawyer will file a class-action lawsuit Wednesday against the federal department that lost the personal information of 583,000 student loan borrowers late last year.

Bob Buckingham, who is based in St. John’s and specializes in privacy breach claims, said the decision to move forward with the lawsuit against Human Resources and Skills Development Canada was made Monday.More...

January 17, 2013

Student loan delinquency rate now higher than all other consumer loans

For the first time in the history of the United States, the delinquency rate on student loans is higher than the rate of all other consumer loans, including credit and car loans. According to the latest data from the New York Federal Reserve, total student loan debt stands at $956 billion.More...

A new infographic from puts the U.S. student loan dilemma into perspective.

January 14, 2013

Lawsuit Says Florida Bright Futures FAFSA Requirements Violate Right to Privacy

Should students have to disclose highly personal details of their families' finances to the federal government as a precondition for receiving state scholarships based on academic merit? The Florida Legislature thinks so, but a new lawsuit insists it is unconstitutional.

The suit, originally filed in Miami-Dade County Court but subsequently removed to Leon County in November, is brought by attorney Adam Lawrence. Adam joins Bonnie Daniels and their son, William Lawrence, as plaintiffs in the action, which alleges that a 2011 state law that requires students to fill out a Free Application for Federal Student Aid (FAFSA), as a precondition for qualifying to receive a Bright Futures Scholarship, violates Florida's constitutional right to privacy.More...

January 10, 2013

Core Recoveries reaches $20 million in student loans collected

This week, Louisville-based Core Recoveries LLC, which specializes in student loan collections, reached $20 million worth of loans collected, said executive vice president and chief operating officer Thomas Wantuck.

That was a significant milestone for the company, which was created in April 2011 and now employs 14 full-time workers plus several part-time workers and contractors, Wantuck said.More...

January 8, 2012

Loans Weighing Down Students' Futures

Sylvia Zukowski only works two jobs now, down from the four she had when she returned to college for a second undergraduate degree.

After her first time through Illinois Wesleyan University, the 28-year-old turned her business degree into a consultant's job in Chicago. But the career didn't work out, and she returned to IWU to study social studies so she can teach history.More...

January 4, 2012

110 for-profit colleges accused of lying, defrauding taxpayers

TAMPA - A whistleblower at one of the biggest for-profit college companies in the country is speaking to the I-Team, claiming Education Management Corporation, which operates more than 100 schools nationwide, is involved in lying to students and defrauding taxpayers.

The I-Team first exposed allegations of unethical practices at Education Management Company (EDMC) in an investigation in October. More...

January 2, 2012

For-Profit Colleges Manage Student Loan Default Rates, Senators Call For Investigation

As growing numbers of students at for-profit colleges have defaulted on their debts in recent years, bringing government scrutiny and the threat of financial penalties, some institutions have unleashed a novel strategy aimed at improving their numbers: They have systematically encouraged students to stay current on their debts just past the point at which the government measures default rates.More...

December 31, 2012

Another suit filed against MSU alleging racketeering activity

A Shepherdstown attorney has filed another federal lawsuit on behalf of a former Mountain State University student accusing the school of racketeering activity.

Sherman Lambert Sr. filed the suit for his client, Adama C. Kargbo, Dec. 19 in U.S. District Court in Martinsburg. Defendants in the suit are former MSU president Charles H. Polk, Mountain State University Inc., MSU Building Company, MSU Foundation Inc. and the MSU Endowment Fund Inc.

This is not the first suit alleging racketeering filed against the university. Lambert has filed approximately 20 other suits on behalf of other former students.More...

December 27, 2012

Graduates, Parents Riddled With Student Debt Turn to Bankruptcy

A mourning father in California finally resolved his dead son's student loan debts more than four years with an exhausting journey through the courts and other maneuvers.

Francisco Reynoso, 57, of Palmdale, Calif., is a self-employed gardener. His son, Freddy, died in a car accident on Sept. 5, 2008 after graduating from the Berklee College of Music in May 2008.More...

December 26, 2012

Stop Handing Out Student Loans Like Candy, Or Else You’ll Get Sued Like Sallie Mae

You may recall that back in 2011, before all of the law school litigation came into being, the California Culinary Academy (CCA) was hit with a multi-million dollar class action lawsuit filed by its graduates. The allegations contained therein — misleading job data, high tuition, and difficulty finding jobs after graduation — were very, very similar to those found in the law school lawsuits we revel in covering. Unlike the law schools that are currently under fire, the CCA offered to settle the case for $40 million, and that settlement was approved and entered as a final judgment this summer.More...

December 24, 2012

Appellate Court Affirms Dismissal of Placement Data Lawsuit Against New York Law School

NYLS LogoA New York appellate court yesterday affirmed the trial court's dismissal of a proposed class action brought against New York Law School by nine alumni who claimed that the school misrepresented its placement data. Gomez-Jimenez v. New York Law School, 2012 NY Slip Op 08819 (A.D. Dec. 20, 2012):

This appeal involves the propriety of the disclosures of post-graduate employment and salary data by defendant New York Law School to prospective students during the period August 11, 2005 to the present. Plaintiffs allege that the disclosures cause them to enroll in school to obtain, at a very high price, a law degree that proved less valuable in the market-place than they were led to expect. We hold that defendant's disclosures, though unquestionably incomplete, were not false or misleading. We thus affirm the dismissal of the complaint. ...More...

December 18, 2012

Consumer Financial Protection Bureau Finds Student, Mortgage Lenders Have 'Uncanny Resemblance'

The private student loan industry smells a lot like the subprime mortgage industry: Dead ends, runarounds and few live customer service representatives to speak with. The same tactics that mortgage borrowers have faced are now happening for student loan borrowers, according to a new report from the Consumer Financial Protection Bureau.

The government watchdog on Tuesday released its annual report on student loans, including details from a database of complaints that opened to student loan borrowers in March. More...

December 14, 2012

Student loan delinquencies hit new high

Late last year, total student debt outstanding surpassed $1 trillion for the first time. Now, the problem of student loan delinquency is generating its own eye-popping numbers.

New data released today shows 11% of student loans were 90 days or more past due in the third quarter, up from 8.9% in the previous quarter and 8.8% a year prior, according to the Federal Reserve Bank of New York. It’s also the highest since at least 2003, when the bank first started tracking student loan delinquencies. “It’s a red flag and a warning sign that more Americans are struggling to repay their student loans — things are bad, really bad, and getting worse,” says Rich Williams, higher-education advocate at the U.S. Public Interest Research Group, a nonprofit based in Washington.More...

December 12, 2012

Marx v. General Revenue Corporation

Olivea Marx filed a complaint under the federal Fair Debt Collection Practices Act after General Revenue Corporation sought to collect a student loan. Marx said she was subjected to threatening phone calls and a fax sent to her employer seeking information about her employment status. A trial court agreed with GRC that the fax to her employer did not violate the law. Pursuant to Federal Rules of Civil Procedure 54(d), the court ordered Marx to pay GRC's court costs. AARP's friend-of-the-court brief in this case argues that the FDCPA prevents the costs from being shifted to a losing FDCPA plaintiff unless the lawsuit was filed in bad faith and for the purposes of harassment.More...

December 10, 2012

Dupuy seeks to have bankruptcy case, including a 145,333 student loan dismissed

GALVESTON — A county court judge who filed for Chapter 13 bankruptcy protection in February is seeking to have the case dismissed, according to federal court documents filed Thursday.

Christopher Dupuy was elected judge of Galveston County Court of Law No. 3 during a 2010 Republican landslide. He has come under scrutiny related to incidents both before and after he became judge.

In October, Dupuy listed $299,772 as the amount in which creditors hold unsecured, nonpriority claims, court documents state.More...

December 6, 2012

Student-Loan Collection Targeted for Overhaul in Congress

Congress will consider overhauling debt collection in the $100 billion-a-year U.S. student loan program, replacing it with automatic withdrawals from borrowers’ paychecks tied to their income -- a system used in the U.K.

Legislation that Wisconsin Republican Representative Tom Petri plans to introduce as soon as this week would require employers to withhold payments from wages in the same way they do taxes. Payments would be capped at 15 percent of borrowers’ income after basic living expenses.
Congressman Tom Petri of WisconsinMore...

December 4, 2012

The Needless Tragedy of Student Loan Defaults

For the first time on record, the delinquency rate on student loans has jumped above the rate for credit cards, car loans, or any other kind of consumer loan. The tragedy? Many of those loans will default, with stunningly harsh consequences, even though there are many good options for debt relief—deferment, forebearance, or reductions in monthly payments.

“There is actually no rational reason for a borrower to be delinquent or default on their loans,” says Mark Kantrowitz, president of MK Consulting in Cranberry Township, Pa., and operator of the website.

Borrowers who are unemployed, in the military, or back in school can ask for up to three years or full or partial deferment on repayment of a federal loan. For those who have a job but don’t earn enough to cover the monthly payment, there are six options: graduated repayment, extended repayment,More...

November 30, 2012

What is A deferment or forbearance in relation to student loan default?

A deferment or forbearance allows you to temporarily postpone making your federal student loan payments or to temporarily reduce the amount you pay.

Find out if you qualify for a deferment or forbearance.
Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your federal student loan payments. Postponing or reducing your payments may help you avoid default.More...

November 27, 2012

College’s Bankruptcy Lawyers Target Endowment Money

Struggling to pay the mortgage on its dorms, Lon Morris College in Texas never tried to dip into its $11 million pool of endowment money that supported the 158-year-old United Methodist-affiliated school.

But in the hunt for money after the school’s collapse, its bankruptcy attorneys want the charitable funds to pay its final bills—an unlikely wish for those who donated to the endowments in their wills and family trusts.

The Texas Methodist Foundation, which holds the money, has filed a lawsuit to protect some of the college’s endowment money, arguing that spending it on creditors and the professionals who are now preparing to auction off the college piece-by-piece “is not consistent with the charitable intent” of the endowments, according to papers filed with the U.S. Bankruptcy Court in Tyler, Texas.More...

November 23, 2012

Conquering Student Loan Debt: What You Need to Know about Repaying Your Loans

I recently got my Master of Business Administration (MBA) degree, which marked the highest achievement of my academic success. Awarded with a head full of business knowledge and a fancy frame-able degree, I was feeling pretty cool. But nothing rubs off that rock-star feeling quite like the letter that comes in the mail telling you it’s time to pay up. Because, if you’re like me and you took loans to finance your education, graduation doesn’t just lead to an open road, it also comes with a huge financial obligation in the form of the “D word”: debt.

I had dreaded the “D word” all my life. In fact, when I pictured debt I saw images of a ball and chain, an eternity of ramen noodle soup dinners, and a closet full of white t-shirts. So when I received that letter announcing that my payments were scheduled to begin, I took it very seriously. I decided rather than fearing the “D word,” I was going to conquer it. I sat down, researched my options, and figured out a plan. If you’re considering taking a student loan, keep reading to learn what you’ll need to know about taking a student loan and repaying your debt.More...

November 20, 2012

Wage Garnishment: What it is and how it works

Wage garnishment is when a debt collector or creditor gets permission from a court to take money directly from a consumer's earnings or tax refunds. However, consumers have certain legal protections regarding wage garnishment at both the state and federal level. These restrictions include the amount that can be garnished and, in certain states, the length of time the garnishment can take place. Also, you have the right to dispute a wage garnishment with the court that issued the judgment by filing a form with the court.
The basics of wage garnishment

Most wage garnishments are initiated by court order after a creditor or debt collector obtains a judgment that allows the creditor or collector to take personal earnings to pay the debt. The payments come directly from your employer by deducting the payment amounts from your paychecks.More...

November 17, 2012

Saving Your Personal Finances: Getting Out of Student Loan Default

“We continue to be concerned about default rates and want to ensure that all borrowers have the tools to manage their debt,” - U.S. Secretary of Education Arne Duncan

Student loan default is a terrifying and ambiguous term used to define student loans that have been delinquent for 90 consecutive days. Essentially it means that lenders have lost confidence that the loan will be repaid. During this period, loans will be subject to hefty collection fees, 25-40%, depending on the type of loan.More...

November 14, 2012

4 ways debt collectors should be regulated, and how you can protect yourself

The phone never stops ringing for about 30 million Americans who owe money and are hearing, perhaps a little too frequently, from debt collectors.

And what if you don't even really owe money?

Nearly 1 out of 10 Americans is dealing with debt collectors for an average of about $1,500 apiece, according to the Consumer Financial Protection Bureau.More...

November 10, 2012

New Student Loan Repayment Option Could Help Recent Graduates

November is an anxious time for many recent graduates as grace periods end and payments come due on student loans. And last Thursday, as the month began, the Department of Education issued final rules for the new Pay As You Earn plan, giving many federal loan borrowers a new income-driven repayment option.

Income-driven repayment plans can help you avoid default by basing your payment amounts on your income. More...

November 8, 2012

RSHT goes into mediation with students after lawsuit

A lawsuit calling a "for-profit" college in Henrico County a sham, may never go to trial.

According to court documents, a settlement has been reached in the class action suit against the Richmond School for Health and Technology.

The two sides went into mediation and agreed to some sort of settlement - how much money the settlement could be is unknown.More...

November 5, 2012

Student Loan Lawsuit Default Consequences

Most federal loans enter default when payments are more than 270 days past due. Other loan types may default earlier.

If you are struggling with your loans, you may think 270 days sounds like a long time. Just remember that the consequences of default can impact you even longer.

Student loan default can mean:

Your entire loan balance will be due in full, immediately.More...

November 1, 2012

Soured Student Loans Bankrupt Parents, Grandparents

Lenders who extended $132,000 in student loans to Kristina Pietras before she dropped out of the University of Toledo knew she couldn’t afford to pay them back.

But they convinced a bankruptcy judge that her parents could.

That’s how Pietras’s parents, who co-signed on the loans, got stuck paying off their daughter’s massive student-loan debt, obligations they couldn’t even shake after filing for bankruptcy protection.More...

October 29, 2012

Student loans threaten a generation with 'debtors' prison,' some say

Kourtnee Brooks, a 21-year-old Middle Tennessee State University student, welcomes the help that federal student loans provide, but also fears them.

“Without the loans, I wouldn’t be able to attend school,” said the nursing student.

But then she added, “I know I am borrowing too much.”

Brooks, a junior from Jackson, has been borrowing about $5,000 a year, which she combines with federal grants, some scholarship funds and money she earns working as a waitress three times a week, to make ends meet.More...

October 25, 2012

Half Of All Private Student Loan Complaints Target One Lender

Military Nurse Battles Sallie Mae Over $120,000 In Private Student Loans

This Woman's On The Hook For A $25,000 Private Student Loan She Never Knew Existed
Of the 2,857 private student loan complaints that have poured into the Consumer Financial Protection Bureau's mailbox since March, Sallie Mae has proven the most popular target by far.

The private lender was named in just under half of all complaints –– 1,145 in total, according to the CFPB's latest Ombudsman report.More...

October 23, 2012

Student-Loan Borrowers Average $26,500 in Debt

The average student-loan debt of borrowers in the college class of 2011 rose to about $26,500, a 5 percent increase from about $25,350 the previous year, according to a report by the Institute for College Access and Success’s Project on Student Debt.

Rising College Costs Pose Test for Obama on Education Policies (October 18, 2012)
Well-Off Will Benefit Most From Change to Student Debt Relief Plan, Study Says (October 16, 2012)More...

October 17, 2012

Well-Off Will Benefit Most From Change to Student Debt Relief Plan, Study Says

With nearly one in six student loan borrowers in default, the federal government is making changes to its income-based repayment plan to help borrowers with relatively high debt and low incomes keep up with their payments.

But a report that will be released on Tuesday by the New America Foundation, a nonprofit and nonpartisan policy institute, says the changes ultimately will provide only marginal help for low-income borrowers who are at the greatest risk of default.More...

October 15, 2012

Did a Minnesota debt-collection agency go too far?

A Minnesota-based debt collection agency is at the heart of a lawsuit filed by an Arizona couple over a defaulted student loan.

Michael Collier, a 100% disabled Army veteran, claims in the lawsuit that the company, Gurstel Chargo, garnished their savings to to cover his wife's $6,000 student loan, even though the money came from Social Security disability payments, which are exempt from garnishment.

But it's the accusation of the tactics the company allegedly used when the couple tried to get their money back that's getting attention.More...

October 11, 2012

Federal lawsuits for student loan recovery far less common in West Michigan than elsewhere in state

GRAND RAPIDS, MI -- If you’ve defaulted on your student loans, you’re far less likely to wind up in front of a judge if you live in West Michigan as opposed to the east side of the state.

Data collected by Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, show a sharp difference in the number of lawsuits filed for student loan recovery in Michigan’s two U.S. District Courts – the western and eastern districts.More...

October 9, 2012

Misleading Advice for Student Borrowers

Federal student loan default rates are rising ever higher, with the worst rates among those who attended for-profit colleges. For-profit schools account for about 13 percent of higher education enrollment but nearly half of all defaults. New data from the Department of Education show that 22.7 percent of students from for-profit schools who began repayment in 2009 defaulted within three years. That’s twice the three-year default rate of public colleges and three times the rate at private, nonprofit institutions.

In 2014, the federal government will have the power to cut off federal student aid to colleges whose graduates have default rates of 30 percent or higher for three consecutive years or 40 percent in a single year. The aim is to root out colleges that saddle students with crippling debt while giving valueless degrees or often no degrees at all.

Now prompted by the threat of sanctions, some schools are urging students to enter “default management” programs that allow them to stop making payments temporarily. The problem is that, for many students, these plans can be costly and inappropriate.More...

October 5, 2012

Dallas Texas Jury’s Unanimous Verdict Finds Lockhart, Morris & Montgomery, Inc. Guilty Of Violating State and Federal Law

A unanimous jury verdict found in favor of the plaintiff in the recent trial of Shannon Whaley v. Morris & Montgomery, Inc, and John Hickman (No. DC-10-14604) in the 68th Judicial District Court, Dallas County Texas, for violations of the Fair Debt Collection Practices Act(FDCPA), the Texas Debt Collection Practices Act (TDCPA) and the Texas Deceptive Trade Practices Consumer Protection Act (DTPA).The plaintiff was represented by Noah Radbil of Weisberg & Meyers, LLC, Attorneys for Consumers. Lockhart, Morris & Montgomery and John Hickman were represented by Robbie Malone of Robbie Malone, PLLC, and the jury verdict awarded Ms. Malone no attorney fees for her representation of the defendants in this trial.

Shannon Whaley is a nurse who, in 2007, signed up for a home study course through the College Network. She financed the cost through a loan from Southeast Financial Credit Union. After receiving the course materials, More...

October 3, 2012

Student Loan Debt in Bankruptcy

Usually you cannot wipe out student loans in bankruptcy, but there is one exception.

Most debtors will not be able to discharge (wipe out) student loan debt in Chapter 7 or Chapter 13 bankruptcy. However, if you can prove that repaying your student loans would cause an undue hardship to you, you can get rid of your student loans in bankruptcy.

The Undue Hardship Exception

In order to have your student loans wiped out in bankruptcy, you must demonstrate that it would be an undue hardship for you to pay them. The test for determining undue hardship varies between courts.More...

October 1, 2012

Student loan default rates jump

Borrowers are having a harder time repaying their student loans.

The percentage of borrowers who defaulted on their federal student loans within two years of their first payment jumped to 9.1% in fiscal year 2011, up from 8.8% the previous year, according to U.S. Department of Education data released Friday.

That represents 375,000 of the more than 4.1 million borrowers who were required to start making payments on their student loans in the 12 months prior to October 2010 and defaulted before September 2011.More...

September 28, 2012

Price of student loan cancellation: hopelessness

PLAIN CITY, Ohio — It isn’t easy to stand up in an open courtroom and bear witness to the abject wretchedness of your financial situation, but by the time Doug Wallace Jr. was 31 years old, he didn’t have much left to lose by trying.

Diabetes had rendered him legally blind and unemployed just a few years after graduating from Eastern Kentucky University. He filed for bankruptcy protection and quickly got rid of thousands of dollars of medical and other debt.

But his $89,000 in student loans were another story. Federal bankruptcy law forces those who wish to erase that debt to prove that repaying it will cause an “undue hardship." And one component of that test is often convincing a federal judge that there is a “certainty of hopelessness" to their financial lives for much of the repayment period.More...

September 27, 2012

Troops get $2.3M in Citibank student loan deal

A Minnesota National Guard officer has won a $2.3 million settlement for herself and thousands of other troops in a class-action lawsuit against Citibank and The Student Loan Corporation.

Maj. Lyndsey M.D. Olson challenged the way Citibank administered the student loans of service members who were entitled to an interest-rate reduction to 6 percent under the Servicemembers’ Civil Relief Act. She gets about $7,500 of that $2.3 million as the representative plaintiff in the lawsuit; the rest goes to other service members identified as being affected by the alleged actions.

The plaintiff’s attorneys are awarded fees of $650,000, so Citi’s tab will be closer to $3 million. The attorneys’ fees are separate from the $2.3 million being paid to service members.More...

September 24, 2012

Regina Friend Stuck With Tax Bill For Deceased Son's Student Loan Debt After It Was Discharged

Regina Friend, a security administrator in IT at PHH, faces a $14,000 bill to the IRS on her son's student loans, which were forgiven after his suicide last year.

A mother in Maryland is stuck with a $14,000 tax bill from the Internal Revenue Service for her deceased son's student loans.

Roswell Friend, a Temple University student, committed suicide in 2011. Since Friend's death, Sallie Mae discharged the $55,400 he and his mother, Regina, owed for a Parent Plus Loan.

But the Baltimore Sun reports the IRS treats forgiven debt as taxable income, and expects $14,000 from Regina Friend.More...

September 20, 2012

U.S. Bank, Affiliated Computer Services, NextStudent Facing Class Action Lawsuit Over Student Loans In New York

A new federal class action lawsuit claims three student loan lenders and servicers aimed to keep borrowers trapped in debt.

Cindy Breitman filed a lawsuit in a Manhattan Federal Court this week against Affiliated Computer Services (ACS), a student loan servicer; NextStudent, a student loan lender; and U.S. Bank, Courthouse News reports. She's seeking class certification and treble damages for breach of contract.

U.S. Bank, NextStudent and ACS schemed to keep "borrowers trapped in student loan debt that borrowers were actively seeking to repay as fast as possible to lower the total cost of borrowing," the lawsuit claims.More...

September 18, 2012

Letter Stating that Student Loan is “Ineligible for Bankruptcy Discharge” is False, Deceptive and Misleading Statement under FDCPA

Student loans are presumptively nondischargeable in bankruptcy. However, student loans can be discharged in bankruptcy if a debtor demonstrates, by a preponderance of the evidence, that requiring their repayment would impose an undue hardship on the debtor. To seek an undue hardship discharge of student loans, a debtor must commence an adversary proceeding by serving a summons and complaint on affected creditors. To succeed in such a proceeding, the debtor must show: (1) that the debtor cannot maintain, based on current income and expenses, a ”minimal” standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.More...

September 14, 2012

Student Loan ARM Firm Loses Debt Collection Letter Appeal

Lighten Texas student debt load

As Texas college students enter their third week of classes, many of the back-to-school jitters are fading. They have chosen their classes, are getting to know their instructors and classmates, and are settling into study schedules and campus life. But for a substantial number of college students, one persistent anxiety remains how to make ends meet with less grant aid and a much higher loan burden than their peers just five years ago.

As the Senate Higher Education Committee meets this week, our state legislators have the opportunity to combat the student loan crisis by declaring a statewide goal to reduce student loan dependence. Increasing investments in grant aid and work-study to alleviate the student loan burden will further promote college attendance and completion. Other strategies to improve student success include encouraging student loan counseling, financial education and early financial preparation, including encouraging participation in matched college savings accounts through programs offered by the Texas Match the Promise Foundation.More...

September 12, 2012

The Student Loan Debt Bubble Is Creating Millions Of Modern Day Serfs

Every single year, millions of young adults head off to colleges and universities all over America full of hopes and dreams. But what most of those fresh-faced youngsters do not realize is that by taking on student loan debt they are signing up for a life of debt slavery. Student loan debt has become a trillion dollar bubble which has shattered the financial lives of tens of millions of young college graduates. When you are just starting out and you are not making a lot of money, having to make payments on tens of thousands of dollars of student loan debt can be absolutely crippling. The total amount of student loan debt in the United States has now surpassed the total amount of credit card debt, and student loan debt is much harder to get rid of. Many young people view college as a "five year party", but when the party is over millions of those young people basically end up as modern day serfs as they struggle to pay off all of the debt that they have accumulated during their party years. Bankruptcy laws have been changed to make it incredibly difficult to get rid of student loan debt, so once you have it you are basically faced with two choices: either you are going to pay it or you are going to die with it.More...

September 10, 2012

Student Loan Disclosure Bills Seek To Prevent Heavy Debt Burdens

When Steve MacIntyre connected with a recruiter at the Art Institutes about enrolling in online classes to work toward a bachelor's degree, he told them he had no money to pay for school and would probably need assistance with any paperwork thrown his way. He says the for-profit art college chain told him no problem and it could help.

"I allowed them to represent me for filling out financial paperwork, so they were able to take out loans and grants in my name," MacIntyre told The Huffington Post. It was a choice that the 40-year-old now calls "foolish."

With only a high school diploma, MacIntyre had struggled to find work for a few years. In the 2004-05 term, he began taking Art Institutes classes.More...

September 4, 2012

Student Loan Lawsuit before the Supreme Court Could Curb Debt Collection Lawsuits

Fearing that the legal playing field could be tilted against consumers, a group of federal and private consumer agencies have filed briefs in a U.S. Supreme Court case that threatens to shift the cost of a lawsuit to consumers in debt collection cases.

Collectors have in the past absorbed court costs in "good faith" suits by consumers, even if the consumer loses. It's an exception, written into federal rules, to the usual "loser pays" rules that apply to most lawsuits. Without it, people would be discouraged from suing debt collectors, say the Federal Trade Commission, the Consumer Financial Protection Board and a group of private consumer advocacy groups in legal briefs filed this month.

In doing so, they say they're attempting to preserve a delicate legal balance between consumers, who sometimes fail to pay their debts, and debt collectors, who occasionally break the law by harassing or threatening consumers who are behind on their bills.More...

August 31, 2012

Soaring student loans defy debt decline

Americans are slowly whittling down their debts and defaulting on fewer bills — except when it comes to student loans.

Debt incurred to pay tuition continued to rise, and a higher percentage was delinquent in the second quarter, according to a report yesterday by the Federal Reserve Bank of New York.

Student-loan debt rose to $914 billion last quarter — double 2006 levels. Plus, the rate of delinquencies, those 90 days late or more, rose to 8.9 percent from 8.69 percent in the first quarter, the report said.More...

August 28, 2012

Lawsuit Claims Virginia College is Guilty of Fraud

A report from a U.S. Senate pane says students who attend for-profit colleges leave with high debt and many of those don't even graduate. MPB's Daniel Cherry reports how several students of Virginia College in Jackson are suing the school.

Crystal Larkin, a single mother of two, finished the Medical Assistants program at Virginia College. She claims the certification provided by the schoo doesn't meet the minimum requirements for her to find a good job. Now she says she's saddled with student loan debt holding a certification that's worthless.More...

August 23, 2012

More Social Security Money Withheld Because of Unpaid Student Loans

About twice as many Social Security recipients are not receiving all of their Social Security payments this year because they have unpaid federal student loans, according to a report by

According to a 1996 law, the federal government has the authority to withhold portions of Social Security payments if defaulted debt is owed to the government, including federal student loans.

“It’s quite extraordinary because normally Social Security benefits can’t be touched by creditors,” said Deanne Loonin, a staff attorney with the National Consumer Law Center.More...

August 21, 2012

Defaults on student loans skyrocket among senior citizens

Student loans never just “go away” — not even for senior citizens collecting Social Security. In this struggling economy, that means more seniors than ever before are seeing portions of their Social Security checks seized by the U.S. government due to defaulted student loans.

After poring over Treasury Department data, the financial website SmartMoney concluded Monday, “The federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees' Social Security checks on those grounds.

“That's nearly double the pace of the department's enforcement in 2011; it's up from around 60,000 cases in all of 2007 and just six cases in 2000.”More...

August 17, 2012

Feds want $122,000 in unpaid student loans from D’Angelo Lee, who’s in prison for role in City Hall corruption case

A familiar name has resurfaced, once again as the defendant in a lawsuit brought by the federal government: D’Angelo Lee.

Yes, that D’Angelo Lee — the former Dallas City Plan Commissioner convicted in 2009 of extortion in the federal case that also sent Mayor Pro Tem Don Hill to prison for a long, long time. Hill got 18 years; Lee, the man who helped him shake down low-income housing developers wanting to do business in southern Dallas, received 14. Since May 2010, Lee’s been doing his time at the Federal Correctional Institution in Safford, Arizona, a low-security facility. Records say he’s due to be released on April 14, 2022.

But the feds aren’t done with Lee just yet: As you’ll note below, yesterday in Dallas federal court the U.S. Attorney’s Office filed suit against Lee in the hopes of collecting $122,730.46 in unpaid student loans. That’s how much the Department of Education says Lee owes per Title IV of the Higher Education Act of 1965. Around $28,000 of that dates back to loans taken out in the early and mid-1990s, when the L.A. native Texas Two-Stepped to Southern Methodist University’s Perkins School of Theology, from which he would eventually receive his master of divinity degree. Records say he never paid back a penny of that loan, on which the interest now stands at $23,707.97. More...

August 14, 2012

Does student loan debt put a damper on your relationship?

Add this to the list of awkward questions you reserve for potential dates and mates:

So, how about those student loans?

About 37 million Americans are weighed down by college debt, according to a recent report from the Federal Reserve Bank of New York. Twenty-seven percent of those students and ex-students also have past due balances.

The loans, whether they are his, hers or collectively his-and-hers, can be toxic for budding romances or new marriages.

When Allison Marek, 26, finishes the graduate school of social work at the University of Houston next spring, she will be roughly $60,000 in debt.

“I was brought up believing that you have to have your own stuff together — you have to be stable financially and emotionally — before you can engage in a serious relationship and get married,” says Marek, who is single. “Student loans are one reason women are so focused on their careers today. They have to be to pay off their debt.” More...

August 11, 2012

What Happens If You Default on Your Student Loans Know what to expect if you fall behind on student loan payments.

Tax Refund Offsets

The IRS can intercept any income tax refund you may be entitled to until your student loans are paid in full. This is one of the most popular methods of collecting on defaulted loans, and the Department of Education annually collects hundreds of millions of dollars this way. In some cases, you can challenge a tax refund offset. You can learn how at You may need the assistance of an attorney.

Your Paycheck Garnished

The government can take ("garnish") a limited portion of the wages of a student loan debtor who is in default. It can take up to 15% of your disposable income. However, it cannot take more than the equivalent of 30 times the current federal minimum wage. More...

August 11, 2012

Student loan default in the United States

Defaulting on a student loan in the United States can have a number of negative consequences. To understand loan default, it is helpful to have a few common terms defined:

Loan Deferment is a postponement of a loan's repayment. There are many reasons why someone might seek to defer a loan, including a return to school, economic hardship, or unemployment.

Loan Delinquency is a failure to make loan payments when they are due. Extended delinquency can result in loan default.

Loan Default is the failure to repay a loan according to the terms agreed to in the promissory note. A lender may take legal action to get the money back. More...

August 11, 2012

Increasing Student Loan Debt Burdens Well-Off Families While Elite Colleges Scale Back Support

Students coming from families earning six-figure incomes are taking on more debt than previously thought.

According to a Wall Street Journal analysis of recently released Federal Reserve data, households with annual incomes of $94,535 to $205,335 saw the biggest jump in the percentage with student-loan debt from 2007 to 2010, the latest figures available. That group also saw a sharp climb in the amount of debt owed on average.

In 2007, 19.5 percent of families from this income group had students taking out loans to pay for college. That figure jumped to 25.6 percent in 2010. They're also carrying an average of $32,869 of student loan debt, up from $26,639 in 2007. Upper-middle income families have seen a sharp increase in amount of student loan debt they are carrying over the past 8 years. More...

August 9, 2012

500 More Students At FSCJ Potentially Forced To Repay Pell Grants

Imagine you received financial aid to help pay your pricey college tuition bill. Then, out of nowhere, the university demands the money be returned to government because the grant was given to you by mistake.

The nightmarish scenario has come true for nearly 1,300 students at Florida State College in Jacksonville, Fla.

On Monday, officials at FSCJ announced that another 500 students may be forced to repay their Pell Grants. The Pell Grants were granted not through the initial application process, but rather, were given to students submitting appeals without proper documentation. This number is in addition to the initial 780 students affected. More...


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