Boston Student Loan Lawyer

Law Office of Adam S. Minsky

What the Election Results Mean for Student Loan Borrowers

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

Donald TrumpIt’s the political upset of the century, and this election is going to be studied by analysts and political scientists for years. But the reality is clear: Donald Trump has been elected the next President of the United States, and both houses of Congress will remain firmly in Republican control for the next two (and likely four) years. This is starkly different than what was expected by the political class just 48 hours ago – a Hillary Clinton win, with the Senate likely flipping to Democratic control.

A lot is being written right now about this election, and what it might mean for the country. I have seen very little, however, on what the election might mean for student loan borrowers. I’ve been quite clear that this election was going to be hugely consequential for student loan borrowers, regardless of who won. This is certainly still true today. And now we have to start thinking about what may be next for people with student loans.

Below are my candid thoughts on what I think student loan borrowers may be looking at over the next four years. I should be clear – while I believe my assessments below are consistent with the rhetoric and with the past actions of our next executive and legislative leaders, absolutely nothing is concrete at this time. There is a lot we just don’t know – and can’t know – at this early juncture. With that caveat, read on. Read More

Final Rules Issued for Student Loan Forgiveness Program

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

US_Capitol_Building_at_night_Jan_2006This week, the U.S. Department of Education released its long-awaited final regulations governing borrower Defense to Repayment.

As you may recall, thousands of borrowers began petitioning the federal government to forgive their federal student loans following the collapse of the for-profit college chain, Corinthian Colleges. Students argued that they should not be held responsible for student loans issued by a predatory company that took advantage of people and actively misled them. The students requested student loan relief and forgiveness under a little-known contractual and regulatory clause called “Defense to Repayment.” Since then, ITT Technical Institute has also collapsed, and many ITT graduates are requesting similar forms of relief.

The Dept. of Education had no formalized procedure for addressing Defense to Repayment, and so it began a long bureaucratic process to implement new rules and standards so that officials can determine who may be entitled to relief. After months of work, the Dept. of Education finally issued its new rules. Here are the highlights:Read More

ITT Shuts Down: What Student Loan Borrowers Need to Know

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ITT_Technical_Institute_campus_Canton_MichiganWell, that was fast.

Just two weeks after the U.S. Dept. of Education announced that it would cut off access to federal financial aid for ITT Technical Institute – one of the largest for-profit college chains in the country that has been repeatedly accused of improper conduct – the company has announced that it is closing all of its campuses. This is major news, and will have widespread implications not only for the 40,000 students currently enrolled in ITT, but also the tens of thousands of students who have already graduated. ITT’s collapse may also have ripple effects across the entire for-profit industry, as well.

Here’s what student loan borrowers need to know about the ITT closure.Read More

Major For-Profit College Chain May Collapse

| Articles Current Events For-Profit Colleges Loan Forgiveness

ITT_Technical_Institute_campus_Canton_MichiganITT Technical Institute, one of the largest for-profit college chains in the country with nearly 45,000 students, may be on the brink of collapse.

The U.S. Dept. of Education just announced that ITT will no longer be eligible to access federal financial aid. In other words, students attending ITT can no longer finance their education through the federal student loan and grant system.  This is in response to growing federal and state scrutiny of ITT over the past several years. ITT has very high tuition (anywhere from $45,000 to $85,000) and has been accused of engaging in high-pressure sales tactics, misrepresenting the quality of its educational programs, and failing to secure adequate career outcomes for its graduates. According to a July 2014 Senate Health, Education, Labor, and Pensions (HELP) committee report, 57% of ITT programs would fail the Department of Education’s proposed Gainful Employment rule. ITT also reportedly has one of the highest student loan default rates in the country.

As part of the federal aid announcement, the U.S. Dept. of Education also announced that it is requiring ITT to substantially increase its access to credit. This requirement is an indication that the federal government views ITT as a potentially significant risk to the taxpayer, should the U.S. Dept. of Education determine that ITT students and graduates are entitled to student loan forgiveness as a result of the school’s conduct.

In response to the announcement, ITT’s stock price has collapsed, and the school has stopped enrolling new students. With ITT’s main source of revenue (federal student aid) cut off, and with potentially crippling new financial requirements, it is very possible that ITT may completely collapse, leaving tens of thousands of students with an incomplete or useless degree – and lots of student debt. It is unclear at this early juncture whether these students would be entitled to student loan forgiveness under the new Defense to Repayment regulations (which are still being finalized) – but this would be the exact type of scenario that those new regulations are designed for.

Federal student loan borrowers currently enrolled in ITT campuses should be aware that if their school closes, and that closure prevents them from completing their educational program, they may be able to apply for a discharge of their applicable federal student loans. This student loan forgiveness program is distinct from Defense to Repayment.

This is an active, evolving story – so stay tuned for updates.

7 Reasons Why This Election Matters for Student Loan Borrowers

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

DT and HCThe presidential party conventions are over, and what seems like the “election that never ends” will actually be over in less than 100 days.

A lot is being said about this election – that it’s the most important in a generation; that it could fundamentally change the United States and its place in the world; that our core national values are at stake. All of this may be true, and there’s plenty of analysis out there about how big and important it is.

But as a student loan attorney, I can tell you without hesitation that this presidential election is going to have a real, tangible impact on millions of student loan borrowers. It’s going to have significant, lasting consequences. What these impacts and consequences look like, however, will depend primarily on who wins this November. If you have student loans, you should be paying attention. Here’s why:Read More

July Student Loan News Roundup

| Articles Current Events For-Profit Colleges Policy & Reform

Breaking NewsThere’s been a lot going on in the world of student loans during the past couple of weeks. Here’s a summary:

  • This week, the Massachusetts State Senate passed a bill limiting the use of credit checks in hiring. This could provide some much-needed relief to consumers who have a negative credit history (such as a prior student loan default), which can cause ongoing problems in securing employment and housing. The bill now goes to the House.
  • The Massachusetts State Senate also passed a landmark bill providing substantial new protections from debt collectors. This has the potential to be a game-changer here in terms of student loan collections, especially for private student loans. The bill will be sent to the House, where we hope it will pass.
  • The U.S. Justice Department has launched a probe into whether Bridegepoint Education, the owner of Ashford University and the University of the Rockies, is violating a law that prohibits for-profit colleges from getting more than 90 percent of their operating revenue from federal student aid funding. This is just the latest for-profit college chain to come under legal scrutiny.
  • Non-profit and for-profit colleges are having a bit of a panic attack as the U.S. Dept. of Education moves forward with new rules allowing for student loan forgiveness for borrowers whose schools engaged in fraud and misrepresentations. The rules still have to be finalized and will not be implemented until sometime in 2017.

It’s rarely a slow news day in student loan law. Expect more robust articles on these stories as they develop.

BREAKING: Proposed Student Loan Forgiveness Rules for Defrauded Students

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

DeliberationsI’ve been periodically writing about the U.S. Dept. of Education’s attempts to create a process for addressing borrowers who were defrauded by predatory for-profit institutions and who are seeking relief through Defense to Repayment. As I have previously written, while thousands of borrowers have applied for relief (and the administration has granted some relief to borrowers already), there is no regulatory structure in place to guide the government in deciding who should be eligible for relief, and how to make those determinations. As a result, the vast majority of Defense to Repayment applications submitted by student loan borrowers have been sitting in limbo.

When I last checked in with you all, the U.S. Dept. of Education was involved in what’s called “negotiated rulemaking,” whereby various stakeholders are invited to hash out the details about what a regulatory regime for student debt relief would look like.

Earlier this week, the Department issued proposed regulations for borrowers asserting Defense to Repayment. Here are the details:Read More

Major Reforms Proposed for Student Loan Credit Reporting

| Articles Current Events For-Profit Colleges Policy & Reform Private Student Loans

US_Capitol_Building_at_night_Jan_2006Representative Maxine Waters of California has introduced sweeping legislation designed to improve the credit reporting system for student loan borrowers and other consumers.

Credit reporting has become a major national issue. Even with critical consumer protection laws like the Fair Credit Reporting Act (FCRA), creditors and credit bureaus often still report inaccurate information about people’s credit histories. This can have serious and damaging consequences – credit reports can be the deciding factor in obtaining housing or employment, and negative information can make a huge difference. And even when negative events are accurately reported on people’s credit reports, their effects can be far-reaching and long-lasting, since damaging credit report information can remain on a consumer’s credit report for many years.

This new bill, called the “Comprehensive Consumer Credit Reporting Reform Act,” is designed to increase protections for consumers and make credit reporting a bit more fair. Here are some of the highlights of the bill:Read More

Obama Administration Fast-Tracks Loan Forgiveness for Over 500,000 People

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

Obama Student Loan ForgivenessIn two recent moves, the federal government is fast-tracking federal student loan forgiveness for hundreds of thousands of borrowers who need it most.

First, the U.S. Dept. of Education has announced that it is streamlining and fast-tracking loan forgiveness requests for student loan borrowers who attended the now-defunct Corinthian Colleges chain. Thousands of students have submitted requests for debt relief under the poorly-defined “Defense to Repayment” clause, and the Department has been slow to respond since there is no formal application or defined process for review. However, the government just announced the creation of a simple online form that former Corinthian students can complete to request forgiveness under Defense to Repayment. Former students of 91 campuses in 20 states will be granted automatic federal student loan forgiveness after submitting this form. This has the potential to benefit nearly 100,000 students who were defrauded by Corinthian. If the Department expands loan forgiveness eligibility to graduates of all Corinthian campuses (it is unclear if this will actually happen), approximately 350,000 former students may benefit.

This week, the Obama administration also announced the fast-tracking of federal student loan discharges for borrowers who are totally and permanently disabled. A disability discharge has existed for federal student loan borrowers for quite some time, but few people know that this program even exists. Furthermore, the disability discharge application process has historically been a long, complicated and heavily bureaucratic experience, effectively locking out many borrowers who would clearly be eligible. The federal government intends to address these problems by proactively reaching out to federal student loan borrowers who would, under federal law, be automatically eligible for a disability discharge due to their disability designation by the Social Security Administration.  This has never happened before, and nearly 400,000 disabled borrowers may benefit from these outreach efforts.

All in all, this is excellent news for student loan borrowers who are struggling with debt that they will never be able to repay – either because of a disabling impairment that prevents them from working, or because of a predatory educational institution that engaged in fraud and other illegal conduct. This is part of a larger effort by the Obama administration to more strongly address the student debt crisis – it’s certainly not enough to address the systemwide problems, but it’s something, and more may be on the way. Stay tuned.

Trump University: What’s The Deal?

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Super Tuesday has ended with significant victories for Donald Trump, and his opponents are starting to focus their attacks as he emerges as the clear Republican frontrunner. One issue that is getting some attention is “Trump University,” which is the subject of several lawsuits alleging fraud and other deceptive practices.

Here’s some background. Donald Trump founded “Trump University” in 2005 as a for-profit venture that offered courses and trainings (online and in-person) to teach people about real estate, asset management, entrepreneurship, and wealth creation. The “University” was never accredited as a formal college or university (despite the name), it doesn’t have a campus, and it has never conferred college credits or degrees. As a result, Trump University was eventually pressured to change its name to “The Trump Entrepreneur Initiative.”

Fast forward to today, and Trump University is now the subject of at least two major lawsuits: Read More