Student loan

Thanks for nothing, college! –


Prior to 1998, student loans were dischargeable through bankruptcy, with the caveat that a former student had to wait seven years before she was eligible to use bankruptcy. This waiting period was meant to prevent students with high-earning jobs and hefty loan debt (i.e., med students) from abusing the system to free themselves of their enormous fiscal obligations immediately after graduating (the “moral hazard” argument). Interestingly, a similar rationale has been presented to argue against Obama’s call to expand the Income-Based Repayment system.

Why Student Loans Are an Even Bigger Sham Than You Know | Alternet

At a time when overall student debt approaches  $1 trillion, the facts reveal that student loans aren’t loans, not in the traditional sense. They exhibit none of the qualities of modern consumer financial instruments, and are often sold under false pretenses, with the promise of a lifelong benefit that never materializes. We need to change how these loans work and have a broader conversation about what we should be doing — including bankruptcy and refinancing — to help future generations obtain a quality, affordable education, which is critical to our economic future.

via Why Student Loans Are an Even Bigger Sham Than You Know | Alternet.


CFPB Will Regulate Student Loan Debt Servicers

The Consumer Financial Protection Bureau on Thursday announced new rules aimed at cracking down on alleged abuses by companies that collect debts for student lenders, seeking to tame an area of finance accused of afflicting debt-saturated graduates with exorbitant fees.

Under the new rules, so-called loan servicers — the companies that send out bills on behalf of lenders and process payments — will be subject to audits by the CFPB, senior bureau officials told reporters in a conference call.

via CFPB Will Regulate Student Loan Debt Servicers.

Universities Sue Students Over Defaulted Perkins Loans

Several major universities are taking former students to court in an attempt to collect on past-due bills under the Perkins student loan program.

George Washington University, Yale University and the University of Pennsylvania have all filed lawsuits against students who defaulted on their Perkins loan repayments, Bloomberg reports.

via Universities Sue Students Over Defaulted Perkins Loans.