Category Archives: Student Debt

What students owe and why it matters.

by

Consumer Financial Protection Bureau Sues Nation’s Largest Student-Loan Servicer

The Consumer Financial Protection Bureau is suing Navient, the country’s largest servicer of federal and private student loans, for failing borrowers during every stage of repayment, the federal agency said on Wednesday in a news release.

In the lawsuit, which seeks undisclosed damages, the bureau states that Navient violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collections Practices Act.

Navient provided borrowers with b…

by

In Shift, Education Dept. Will Automatically Forgive Student Loans Incurred at Defunct For-Profit

With one week left before its leadership changes hands, the U.S. Department of Education announced on Friday that it would automatically grant loan-debt relief to former students at the American Career Institute, a defunct for-profit college in Massachusetts. The move is a shift from how the department has so far granted relief to defrauded borrowers, requiring them to apply for it.

The department said in a news release that it would send emails to former students of the institute starting on Tu…

by

USA Funds Moves to Further Focus on Education Philanthropy and Investing

USA Funds, which has played a growing role in education philanthropy and investing in the last few years, announced on Wednesday that it would shed its loan-guarantee affiliates.

Officials at the $1-billion organization said the move would allow it to further focus on its new mission of ensuring that college leads to meaningful results for students, which it does by making grants and investments in for-profit and nonprofit companies and organizations.

Over the last three years, the nonprofit USA…

by

New Jersey Will Forgive Student-Loan Debt of Dead Borrowers

Gov. Chris Christie of New Jersey signed a bill on Monday that forgives the student loans of borrowers who die or become permanently disabled, ProPublica reported.

Some borrowers who become temporarily disabled can also defer loan repayment under the new law, according to the Observer.

The bill’s enactment follows an investigation by ProPublica and The New York Times that found the state’s student-loan program to have “extraordinarily stringent” rules. Their July article described how a New Jers…

by

$108 Billion in Student Debt Is Likely to Be Forgiven, Government Says

In a report released on Wednesday, the U.S. Government Accountability Office said the federal government would forgive at least $108 billion of student debt in the coming years, an amount higher than expected.

The office also said the Department of Education’s method of forecasting the cost of its income-driven repayment program does not “ensure reliable budget estimates,” because, among other things, it does not factor in inflation.

The report looks at borrowers in such plans, an option created…

by

Education Dept. Details New Measures on How Defrauded Borrowers Can Seek Relief

The U.S. Education Department has released its long-awaited defense-to-repayment rules, which codify how borrowers who are defrauded by predatory colleges can obtain relief from the federal government. The rules, released on Friday at 12 a.m., were spawned by the collapse of the for-profit Corinthian Colleges and the subsequent masses of students who petitioned the department for loan forgiveness.

Among other things, the rules:

  • Allow loan forgiveness to be granted to borrowers en masse, in case…
by

One-Third of Low-Income Student Borrowers Who Rehabbed Loans Could Default Again

[Updated (10/17/2016, 11:45 p.m.) with additional information and editing changes.]

One in three student-loan borrowers with very low incomes who have “cured” a loan in default in the past year are likely to default again, according to a report released on Monday by the Consumer Financial Protection Bureau.

The federal agency’s student-loan ombudsman’s latest annual report highlights complaints the bureau has received from the “most economically distressed” borrowers about the transition from de…

by

National Default Rate on Student Loans Declines for Third Straight Year

The overall three-year cohort default rate on federal student loans dropped in newly released data, marking the third straight year the rate has fallen, the U.S. Department of Education announced on Wednesday.

The percentage of borrowers who defaulted on federal loans within three years of entering repayment dropped from 11.8 percent to 11.3 percent for those who started repayment between the 2012 and 2013 fiscal years.

Colleges with high default rates may lose their access to federal student ai…

by

Owner of Ashford U. Is Ordered to Forgive $23.5 Million in Student Debt

The federal Consumer Financial Protection Bureau has ordered Bridgepoint Education Inc., owner of the for-profit Ashford University, to forgive all outstanding private student loans and to refund any payments already made on those loans.

According to a statement from the agency, Bridgepoint deceived its students by charging them higher-than-advertised monthly loan payments and now must refund or forgive more than $23.5 million in money paid or still owed. The bureau has also ordered the company …

by

Amazon and Wells Fargo End Student-Loan Partnership

Wells Fargo has stopped offering Amazon customers reduced interest rates on private student loans, The Washington Post reported on Wednesday.

The partnership was discontinued about a month after the companies announced they were working together. Neither company responded to a request for comment, the Post said.

The short-lived program offered Wells Fargo education loans to Amazon Prime Student subscribers with an interest rate discounted by half a percentage point.

Critics said the partnership …