Boston Student Loan Lawyer

Law Office of Adam S. Minsky

New Student Loan Protections Are Coming

| Articles Current Events For-Profit Colleges Policy & Reform

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 Education Secretary Betsy DeVos rescinded Obama-era guidance that was intended to incentivize better treatment of student loan borrowers by servicers, and her administration has been trying to gut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.

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What the Election Results Mean for Student Loan Borrowers

| Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

Well, it’s the day after Election Day 2018. Analysts and pundits are still trying to figure out what the election results mean nationally. However, today I want to focus specifically on student loan borrowers.

Ballots are still being counted in many precincts, and not all races have been called. But as it stands, it looks like Democrats have retaken the House of Representatives, while Republicans have expanded their Senate majority. Democrats have flipped at least seven state governorships, while Republicans have held on to several others. There was a Democratic wave in many states, but Republicans also generally held their own or exceeded expectations in several key races. So, how does this all add up for student loan borrowers?Read More

Major Changes Are Coming to Student Loan Servicing

| Articles Current Events Income-Driven Repayment Policy & Reform

Brace yourselves. Major student loan servicing changes are coming.

First, some quick background. Most federal student loans are either owned directly by the U.S. Department of Education via the “Direct” loan program, or are held by a private lender via the now-defunct “FFEL” program (also known as the “guaranteed” loan program). The vast majority of Direct and FFEL student loans are not handled by the lender, however. Instead, the lenders hire contractors – called student loan “servicers” – to manage the day to day operations of the loan accounts such as payment processing and application evaluation. These servicers generally do not own your student loans, even though you have to deal with them to do anything with your account. They are simply contractors working on behalf of the lender.

The U.S. Department of Education is moving forward with a major overhaul of its student loan servicing system that will transform every aspect of federal student loan repayment – from payment processing, to re-certification for income-driven repayment plans, to requests for deferments and forbearance.Read More

Student Loan Legislation Update

| Articles Current Events For-Profit Colleges Income-Driven Repayment Loan Forgiveness Policy & Reform Private Student Loans

There is quite a lot going on right now when it comes to student loans. It seems that every month there’s a new bill or a new rule that could significantly impact student loan borrowers. But keeping track of it all can be a bit overwhelming.

First, a very brief overview of how law-making works. Our legal and political system is multi-layered and may seem complicated, but I’ll break it down for you:

  • Legislation – or a proposal for a new law – must be passed by a law-making body like Congress (at the federal level) or a state legislature (at the state level). Congress, and most state legislatures, have two chambers – the House and the Senate – and legislation must pass both chambers, and be signed by the President (or a Governor) to become law.
  • Regulations (also simply called rules) can be created by executive agencies, such as the U.S. Department of Education. Agencies have broad powers to issue new rules or regulations under existing statutes, which can dramatically impact programs that were already created by previous legislation. When agencies create new rules or regulations, they have to follow a formal process before they can go into effect, but they do not typically require approval by Congress (or an equivalent state legislature).

So, with the above in mind, here’s my overview of the most important developments during the last few weeks.Read More

BREAKING: New Details on Expanded Student Loan Forgiveness

| Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

A couple of months ago, Congress passed new legislation expanding eligibility requirements for Public Service Loan Forgiveness (PSLF). That legislation gave the U.S. Dept. of Education 60 days to create formal notice and a procedure for evaluating applicants requesting forgiveness under this expanded program. We haven’t known what the procedure would be, and how or when borrowers could gain access to this program – until now. And, unfortunately, I think it’s going to be a mess.

First, a recap of PSLF. To get your student loans forgiven under the program, a borrower must make 120 “qualifying payments.” A “qualifying payment” is one that is made (1) on the right type of federal student loan, which is a Direct loan; (2) under the right type of repayment plan – which is either an income-driven repayment plan or the 10-year Standard plan; while (3) working in qualifying employment. Read More

Here’s a List of Rollbacks to Student Loan Protections

| Articles Current Events For-Profit Colleges Income-Driven Repayment Loan Forgiveness Policy & Reform

The Trump/DeVos administration has been busy during the past 18 months, rolling back significant protections for student loan borrowers and their families. Just in the past couple of weeks, there have been two new developments that curtail regulation of predatory schools, lenders, servicers, and debt collectors.

First, the Consumer Financial Protection Bureau (CFPB), now under the leadership of Trump appointee Mick Mulvaney, effectively eliminated its student loan division by rolling it into a different department that has no investigatory or enforcement power. Previously, the CFPB’s student loan division had issued comprehensive, data-driven reports on the atrocious state of federal student loan servicing. It had also brought numerous enforcement actions and filed several lawsuits against predatory companies, including Navient, returning upwards of $750 million to student loan borrowers and other consumers harmed by unfair or harmful business practices. It looks like we can no longer count on the CFPB to do this work. Read More

MA Senate Passes Student Loan Bill of Rights

| Articles Current Events Policy & Reform

This week, the Massachusetts State Senate unanimously passed the Student Loan Bill of Rights – powerful legislation that would enshrine new state-level protections for student loan borrowers in the Commonwealth. I was proud to testify at the State House last year in support of the bill, and I am thrilled to see it pass the State Senate with bipartisan support.

The bill still has to pass the House and be signed by Governor Baker before it becomes law. But this is a major first step. If it becomes law, the legislation could do a lot to protect student loan borrowers. Here’s how:Read More

BREAKING: Expanded Eligibility for Public Service Loan Forgiveness

| Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

Last week, Congress passed – and the President signed – a major spending package that touches nearly every element of society. Buried deep within the 2,200 pages of legislation are some interesting provisions regarding the Public Service Loan Forgiveness (PSLF) program, which allows borrowers to get any remaining balance on their federal student loans forgiven after 10 years of “qualifying payments.”

First, a recap of the PSLF program. It’s not so much about “10 years” of qualifying payments as it is 120 individually qualifying monthly payments (which, if made consecutively, add up to 10 years). A “qualifying payment” is one that is (1) made on Direct federal student loans, (2) under a qualifying repayment plan – which is either the 10-year Standard plan or an income-driven repayment plan, while (3) working full-time for a qualifying public service employer.Read More

BREAKING: Budget Targets Loan Forgiveness and IDR Programs

| Articles Current Events Default Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Policy & Reform

The Trump administration released a budget blueprint yesterday, outlining how it wants Congress to address government spending. The proposal calls for sweeping changes to student loan programs – reforms that would have a major national impact. Here are some specifics:

  • Public Service Loan Forgiveness (PSLF) would be eliminated.
  • Current Income-Driven Repayment (IDR) programs like Income Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) would be eliminated, and a new IDR plan would take its place. This plan would have payment amounts somewhere between PAYE/REPAYE and IBR, with a shorter repayment term (15 years) for undergrads and a longer term (30 years) for grad students.
  • Subsidized federal loans would be eliminated, meaning all federal loans would accrue interest at all times, even during periods of in-school deferments.

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Student Loan Law End-of-Year Review

| Articles Current Events For-Profit Colleges Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Policy & Reform Private Student Loans Taxes

Well, 2017 has been quite an explosive year, hasn’t it? And there’s been a lot going on in the world of student loan law – so much, in fact, that it can be a bit overwhelming to keep everything straight. So as we wrap up this year, here’s an overview of what went down for student loan borrowers, and some hints of what’s to come in 2018.Read More