Tag Archives: Student Loans

More Trouble For ITT Education Services: Agency Restricts For-Profit’s Use Of Federal Student Aid

by Ashlee Kieler, Consumerist

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The new restrictions from the Dept. of Education are just the latest regulatory and legal issue for ITT Educational Services. Last month, the company revealed that the Department of Justice was looking into whether the company defrauded the federal government. … Back in May, the SEC filed fraud charges against current and former executives with the company for their part in concealing problems with company-run student loan programs. … The company has faced actions from several states, including the suspension of GI Bill Eligibility in the state of California in May of this year. Read More ›

For-Profit Colleges Accused Of Fraud Still Receive U.S. Funds

by Patricia Cohen, The New York Times

Young African-American man

For-profit schools enroll about 12 percent of the nation’s college students, yet they account for nearly half of student loan defaults. … Kaplan [Career Institute’s] schools, including its online California law school, where only one in five students graduates, received $776.3 million worth of federal student loans and grants last year. Because it lacks bar association accreditation, most graduates outside California are not allowed to take a bar exam. Read More ›

It May Be A Long Time Before Many Corinthian Students Get Debt Relief

by Danielle Douglas-Gabriel, The Washington Post

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[A U.S. Education Department] team is reviewing claims where the “facts and law are clear,” such as the ones from students who attended Corinthian’s Heald Colleges in California, Hawaii and Oregon. Those schools were at the heart of a $30 million fine the Education Department levied against Corinthian in April for lying about job placement rates to students. Read More ›

Students Ask Education Department To Discharge College Debt

by Anne Flaherty, Associated Press

Young African-American man

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

Young African-American man

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

Empty pockets

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

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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

Business spying on customer phone calls

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

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“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

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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 ›

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