The 2020 presidential primary elections are ramping up, and student loan debt has become one of the most important issues on the campaign trail. But the candidates for the Democratic nomination have dramatically different views on how to solve the student loan crisis. Some are calling for widespread student loan cancellation, while others want to streamline and fix some of the current, broken student loan programs. Others want to create new, targeted paths to student loan forgiveness and cancellation.Read More
Defaulting on student loans can be terrifying, damaging, and costly. Federal student loan lenders have enormously powerful tools to pursue student loan borrowers in default. For example, the federal government and federally-backed guaranty agencies can garnish a borrower’s wages, offset a borrower’s Social Security benefits, and intercept a borrower’s tax refund, all without a court order. Private student loan lenders don’t always have the same powers, but they can file lawsuits against borrowers in state courts, and then try to attach assets to satisfy any resulting judgments. Defaulting on both private and federal loans can lead to financial penalties and significant credit damage, as well.
But it’s not all doom and gloom. Borrowers in default on their student loans have legal rights and options. And they may ultimately have the ability to fix their defaulted student loans.Read More
Public Service Loan Forgiveness (PSLF) is a popular program that millions of student loan borrowers are depending on. PSLF provides for complete forgiveness of federal student loans after 120 “qualifying payments.” A qualifying payment is one made on a Direct federal student loan under an income-driven repayment plan or the 10-year Standard plan, while working full-time for a qualifying employer (typically a public entity or 501(c)(3) nonprofit organization).
The program has been a hot topic lately, especially in these polarized political times. It can be difficult to stay on top of the latest developments. Here’s where things stand.Read More
Senator Elizabeth Warren (D-Mass) is running for President and has announced a major proposal to forgive a massive amount of student loan debt. Here’s everything you need to know.
Does the proposal cancel all student loans?
No, but it would effectively forgive most student loans. Warren’s proposal would allow for a maximum student loan forgiveness benefit of $50,000 per borrower. The average college graduate leaves school with between $30,000 and $40,000 in student loan debt, so many borrowers would see most or all of their student loans forgiven.
Who would be eligible for student loan forgiveness?Read More
This week, Attorney Adam S. Minsky led a coalition of attorneys and consumer advocacy organizations, along with the National Consumer Law Center, to demand that U.S. Department of Education Secretary Betsy DeVos take immediate steps to address the ongoing, unprecedented, and systemwide problems and delays currently plaguing its default servicing system. Below is the full text of the letter sent to the Dept. of Education.
April 15, 2019
The Honorable Betsy DeVos
U.S. Secretary of Education
400 Maryland Ave S.W.
Washington, DC 20202
Re: Harm to Defaulted Borrowers as a Result of System Wide Staffing Shortage
Dear Secretary DeVos:Read More
A stunning new report has just come out describing ongoing and systemwide failures by federal student loan servicing companies to manage student loan accounts. The report blames both the servicers themselves and the U.S. Department of Education for its failure to hold these servicing companies accountable for their actions. Remarkably, the report was issued and released by the U.S. Department of Education itself.Read More
The legal landscape of student loan servicing and for-profit schools is a bit like the Wild Wild West right now. There aren’t a whole lot of rules and oversight, and unfair and deceptive practices towards student loan borrowers are fairly widespread. And in our federal legal system, where we have parallel government structures at the federal and the state level, we are seeing a major divergence in prioritizing student loan borrower protections.
One the one hand, the federal government has been actively undermining the few student loan protections that had already existed. Education Secretary Betsy DeVos rescinded Obama-era guidance that was intended to incentivize better treatment of student loan borrowers by servicers, and her administration has been trying to gut student loan forgiveness protections available to people who were defrauded by their schools. At the same time, the Consumer Financial Protection Bureau (CFPB) has, under new leadership, effectively decimated its student loan oversight unit. Suffice it to say, right now the federal government is not doing much of anything to protect student loan borrowers.
But at the same, states are stepping in. State attorney general’s office are playing a big role in advocating for student loan borrowers by bringing lawsuits against servicers such as Navient and FedLoan Servicing. And state legislatures have also been stepping up and trying to pass new legislation that offers protections for borrowers at the state level. A handful of states have already passed state-level “bills of rights” specific to student loan borrowers. And more may be coming.Read More
After four years on Newbury Street in Boston’s Back Bay neighborhood, I’m thrilled to announce that the Law office of Adam S. Minsky has found a new home in downtown Boston. We’re now located near Post Office Square in the heart of Boston’s Financial District, right next to the historic Langham Hotel. Our new address is:
Law Office of Adam S. Minsky
265 Franklin Street, Suite 1702
Boston, MA 02110
The office is conveniently located near major transit lines. There are three nearby MBTA stations – Aquarium (Blue line), State (Blue and Orange lines), and South Station (Red, Silver, and commuter rail lines), and Government Center and North Station aren’t too far, either. There’s also parking available at the Post Office Square garage and the nearby Langham Hotel and 1 International Place.
I’m excited to start this new chapter!
The longest federal government shutdown in American history continues this week, with no signs of ending anytime soon. Nearly a million federal employees are currently not being paid, and hundreds of thousands of additional workers (such as independent contractors and private vendors) who depend on contractual work with the federal government are feeling the impacts, too.
Many people who are affected by the shutdown have student loans that are due, and they are about to miss additional paychecks. If the shutdown continues for another couple of weeks, the impacts are going to drastically widen in scope.Read More
Last week, the New York Attorney General’s office reached a $9 million settlement with ACS – one of the country’s major student loan servicers – for systematically harming student loan borrowers by misinforming them, misleading them, misapplying payments, and more.
As far as I can tell, no one who works with student loan borrowers is surprised. The types of problems that the New York Attorney General’s office found are widespread, and by no means limited to ACS. The Consumer Financial Protection Bureau (CFPB) has reported extensively on rampant student loan servicing problems throughout the industry. Major lawsuits brought by other state attorney general’s offices are still ongoing against giants such as Navient and the Pennsylvania Higher Education Assistance Authority (PHEAA), which also runs FedLoan Servicing. Even smaller servicers such as ECSI have been under investigation.
Why is Student Loan Servicing a Mess?
It doesn’t take a rocket scientist (or a student loan expert) to understand what’s going on here: the federal government outsources the servicing and day-to-day operations of its entire student loan portfolio to a handful of private companies. And it pays them handsomely; one servicer, Nelnet, made more than $200 million in profits in 2016 alone. But there is virtually no oversight of these companies, and no accountability. It’s often up to individual states (usually via proactive attorney general offices) to try to protect borrowers, leading to a patchwork of enforcement actions that can sometimes get results (like we just saw in New York) but doesn’t always lead to systemwide change.