Student Loan News Update

Student Loan servicers will become  

student loan servicer under the new proposal

Student Loan News Update
student loan burden

by Education Secretary Betsy Devos.  Article in Forbes:

In May, DeVos announced that the Education Department would select one servicer to service all federal student loans, which represented a change from the current multiple-servicer system.

DeVos outlined four primary reasons:

    1. Ensure superior customer service
    2. Maintain borrower protections
    3. Protect taxpayers
    4. Increase oversight
 Normally, I am not big on monopolies, especially government ones.
But the current student loan servicers are falling below the mark.

 Student Loan Debt Problem Still Growing

From KBMZ webiste story:

According to figure compiled by Forbes, more than 44,000,000 Americans are working to pay off some kind of student loan, owing more than $1.3 trillion in student loan debt, which is $620 billion more than the total U.S. credit card debt. The average 2016 graduate has $37,172 in student loan debt. 

The existing resolutions, the income based repayment plans and so on, are NOT fixing the student loan debt problem, and it will not go away.

Win for Student Loan Discharge

Congrats to Waterman & Mayer, a Philadelphia law firm with a win in bankruptcy court on a suit to discharge student loan debt.

Chief Judge Eric Frank discharged all the federal student loans ($26,000) of Kristin Price, a single mother of three children.

It may sound unlikely, but Price, a healthy 29-year-old who works 20 hours a week in the field of work in which she obtained her degree, was able to discharge her student loans. It is usually assumed that student loans can be paid if the person is working in his or her field of study, but, in this case, with three children and expensive child care, the court ruled in her favor applying the much criticized, Brunner Test, to conclude that Price could not pay back her loan without undue hardship within the period of her original repayment plan.

Pressure To Lower Bar Exam Standards

Two bad guys?

From my favorite blog, Instapundit:

HIGHER EDUCATION BUBBLE UPDATE, LEGAL EDUCATION EDITION: California Considers Lowering Passing Score On July Bar Exam. “I’d like to thank the deans of law schools around the state who provided invaluable input.”
The tension is between two self-interested groups: Law deans who want a higher pass rate to help their applications and rankings, and the bar which wants a lower pass rate to ensure that there’s not competition that might — shudder! — drive down fees.
Greed.  Law schools make a fortune for what they charge, especially in light of what most law degrees are worth.  If you have one from the Ivy League, Stanford, University of Michigan, Virginia, that is one thing.  But the rest are grossly overcharging, being that I am filing bankruptcies for lawyers who are making !4$ per hour. Working. As lawyers.

NCT And Me

Shout out to Susan Tompor of the Detroit Free Press                (click here) for an excellent article on NCT private student loan trusts. With quotes from yours truly. Anyway, the New York Times story I linked to last week is helping publicize the story, that NCT (National Collegiate Trust)… Continue Reading

National Collegiate Trust (NCT) Student Loans

New York Attorney General Schneiderman has set his sights on the NCT (National Collegiate Trust) vulture.  Can you find it in the picture? Stacy Cowley in the New York TImes: National Collegiate’s trusts have aggressively pursued in court borrowers who fall behind on their student loan payments. An article this week in The New York… Continue Reading

The Brunner Test

The Brunner test is the big hurdle student loan borrowers must get over to discharge student loan debt in bankruptcy. What Is The Brunner Test? The Brunner case is the bane of consumer bankruptcy lawyers trying to get their client’s student loan debt discharged in bankruptcy. Continue Reading

Student Loan News

I long for the day when I can lead with some good Student Loan News.  Today is not that day. The Seattle Times editorialized on a couple of my recurrent themes. Students from middle-class families are forced to depend too heavily on student loans to pay for college. In Washington, about six out 10 students… Continue Reading

Student Loan Seminar

I was privileged to be part of a panel on student loan issues at the American Bankruptcy Institute seminar last weekend. Student Loan Bankruptcy Law Even though bankruptcy law is federal law, it is not the same everywhere. Federal courts are divided into Circuits.  I am in the 6th, Michigan, which also includes Ohio, Kentucky… Continue Reading

Student Loan Borrowers

Most of the time I rant on this blog about student loan servicers, or lenders, including the government. So today, let’s look at student loan borrowers. America’s college grads have earned an “F” in understanding their student loans. What Do Student Loan Borrowers Think? Paul Bedard of the Washington Examiner reports the findings of a… Continue Reading

Student Loan Collections

Well, Student Loan Collections are worse – than even I thought! And my opinion of student loan collectors was, is, they are abysmal. Shahien Nasiripour has a great story at the Bloomberg site. The Department of Education has even more ways to screw up. The Education Department, which rewards its (student) loan servicers with more… Continue Reading

What If I Do Not Pay My Student Loans?

One of the strongest indictments against the value of college is the astonishing number of folks who think they will not have to pay their student loans. According to a new survey, almost half of all college students believe they won’t be burdened with repaying student loans after they graduate. Spoiler alert: They will, unless… Continue Reading