Tag Archives: Student Loans
Students Ask Education Department To Discharge College Debt
by Anne Flaherty, Associated Press
Almost 12,000 students are asking the federal government to discharge their college loan debt, asserting that their school either closed or lied to them about job prospects, according to government data released Thursday. … In the report released Thursday by the Education Department’s new “special master” for debt relief, Joseph Smith called the collapse of Corinthian [Colleges] a “landmark event” that triggered an immediate 1,000 “borrower’s defense” claims and contributed to a claims list that now surpasses 4,000. Most of the claims are from Corinthian students, although some are from other schools. Read More ›
Plan To Require Unaccredited Law Schools In California To Disclose Dropout Rates OKd
by Jason Song and Corina Knoll, Los Angeles Times
A panel of the State Bar of California approved a plan on Friday to require unaccredited law schools to disclose their dropout rates, in an effort to improve transparency for prospective students. … California is one of a handful of states that allow students from unaccredited law schools to take the bar, the state’s legal licensing exam. About 1 in 5 of them pass the bar, according to state records. Read More ›
Garnishing California’s Future: New Bill Seeks To Curb Wage Seizures
by Bill Raden, Capital & Main
Unable to keep up payments, loans fall into default and too often result in crippling court-ordered garnishments that claim up to a quarter of earnings. … “People’s lives are being ruined by these very high, 25 percent garnishments – the national maximum – being taken out of their check before they get it home,” [one expert said]. … [SB 501 would] eliminate the current law’s penalty against garnished workers who might want to work more than 40 hours a week. As the law stands now, every additional dollar above $360 a week is taken by the creditor. Read More ›
For-Profit Colleges Recruit Vets For Cash
by Chris Kirkham and Alan Zarembo, Los Angeles Times
For-profit colleges have collected $8.2 billion from the latest GI Bill since it went into effect in 2009, according to a Los Angeles Times analysis of government data. … That money for years helped prop up some of the industry’s most distressed institutions — including ITT Educational Services Inc. and bankrupt Corinthian Colleges Inc. … Together, ITT and Corinthian have collected more than $1 billion in GI Bill benefits since 2009, the Times analysis shows. That’s more than double the University of California, California State University, University of Texas and Arizona State University systems combined. Read More ›
AB 925 Dies: Secret Recording Of Business-Customer Cell Phone Calls Remains A Crime
Democrats on the Assembly Committee on Public Safety approved AB 925 on a 5-2 party line vote after strenuous opposition from CFC and other consumer, privacy, senior, student, labor and immigrant advocacy groups weakened the bill. Amendments were not yet in print but reportedly would require notification to customers that a call may be recorded 20 seconds into a cell phone conversation, so it remains a bad bill. Read More ›
Corinthian Closing Its Last Schools; 10,000 California Students Displaced
by Chris Kirkham, Los Angeles Times
“This has really exposed the shortcomings of federal and state oversight, and the accreditation system,” said Pauline Abernathy, vice president of the Institute for College Access & Success. “The fact that a school could be allowed to get so big and so reliant on taxpayer funding — and to harm so many students without action being taken sooner — really exposes the need to reform the system at all levels.” Read More ›
Corinthian Students To Get $480 Million Relief From ‘Predatory’ Loans
by Chris Kirkham, Los Angeles Times
As many as 170,000 students who took out private loans offered by Corinthian will see an immediate 40% reduction in their balances — about $1,880 on average — with additional reductions likely in the future. All students will see a 20% tuition reduction. And those enrolled in poor-performing programs can seek a full refund or transfer into another program. … Corinthian has been on a downward spiral since last summer, when the U.S. Department of Education restricted its access to federal student aid amid concerns that the company had falsified student job placement data. Read More ›
CFPB Takes Action Against Two Alleged Student Debt Relief Scams
by Ashlee Kieler, Consumerist
The CFPB alleges that College Education Services promised consumers quick relief from default and garnishments. However, the principal debt relief approach the company used – loan consolidation − did not and could not ensure those benefits in all cases, and not in the quick timeframe the company promised. … In a separate but related filing today, the CFPB filed a lawsuit against Student Loan Processing.US to stop the company’s illegal conduct and provide restitution to consumers harmed by the fraudulent actions. Read More ›
Private Student Loan Companies Provide Few Options for Borrower, Driving Them to Default
by Ashlee Kieler, Consumerist
Officials with the CFPB say these shortcomings reflect an industry that has done little to make good on commitments by lenders to expand alternative repayment options. “The response by the private student loan industry to distressed borrowers is failing to help them avoid default,” Rohit Chopra, CFPB student loan ombudsman says in the report. “Too many borrowers are barely treading water, losing hope that these companies will throw them a lifeline.” Read More ›
Report: Student Loan Debt Isn’t Just An Issue For Young Americans
by Ashlee Kieler, Consumerist
A new report from the Government Accountability Office found that 3 percent of households headed by those ages 65 years or older carry student loan debt, totaling $18.2 billion in 2013. Nearly a quarter of older Americans’ loans are in default – which often leaves the retirees living below the poverty threshold. One California resident told a recent Senate Aging Committee hearing she might be well into her 80s before she pays off her student loans, and she now worries that her Social Security benefits will decline to make payments on the debt. Read More ›
GI Bill loophole keeps 4 major for-profit educators from violating law
by Aaron Glantz, Center for Investigative Reporting
Senate investigators found eight of the top 10 recipients of GI Bill funds were for-profit colleges. In addition, the report said, “the amount of taxpayer dollars paying for veterans to attend for-profit colleges meanwhile has skyrocketed from $640 million in the 2009-10 school year to $1.7 billion last year.” The University of Phoenix’s San Diego campus has received more GI Bill money than any brick-and-mortar campus in America. The school’s overall graduation rate is less than 15 percent, according to the U.S. Department of Education. Read More ›
Corinthian Colleges to sell off 85 campuses; close 12 others
by Chris Morran, Consumerist
For-profit education company Corinthian Colleges – operators of Everest University, WyoTech, and Heald College – which had been receiving around $1.4 billion a year in funding via federal student loans, is currently being sued or under investigation by numerous state and federal authorities for its recruitment and marketing practices. The U.S. Dept. of Education put a hold on its access to loan funds, effectively ringing the death knell for the company. Read More ›
Nasty surprise for some student loan borrowers
by Herb Weisbaum, CNBC
Students who take out private loans to pay for college could face a nasty surprise if their co-signer dies or files for bankruptcy: The lender may suddenly demand the loan be paid in full—or even worse, put that loan in default—even though all payments are being made on time. The Consumer Financial Protection Bureau issued a consumer advisory on Tuesday, warning borrowers that these “auto-default” clauses may be in their loan agreements and serious financial consequences could result. Read More ›