Student Loan News

Planning for paying kid’s college costs consumes

student loan crisis
Student Loans rising to the sun

lots of folks these days, but the bubble is bursting.

Timing when tuition will stop rising, even decline, is a bit like timing the stock market.  This bubble will burst for sure.

Colleges Going Bankrupt?

There are over 4,000 colleges and universities in the United States, but Harvard Business School professor Clayton Christensen says that half are bound for bankruptcy in the next few decades. . . . 

“If you’re asking whether the providers get disrupted within a decade — I might bet that it takes nine years rather than 10.”

That sound you hear is the student loan bubble popping.

Glen Reynolds, and others, have written extensively on this:

In his recent book, “The Innovative University,” Christensen and co-author Henry Eyring analyze the future of traditional universities, and conclude that online education will become a more cost-effective way for students to receive an education, effectively undermining the business models of traditional institutions and running them out of business.

More Student Loan Servicer Errors

I keep calling these blog post updates Student Loan News, and I keep blogging about the same issues.

Oh, well.

The agency said it ordered Citibank to end illegal loan practices and pay $3.75 million in redress to consumers and a $2.75 million civil penalty.

How do banks keep messing up businesses that are guaranteed money-makers if they just play by the rules?

Student debt can carry tax benefits but Citi failed to guide customers through paperwork that could lead to tax savings, according to the agency.

Some clients were also made to pay late fees and interest when they were eligible to defer such loan payments, said the agency.

These errors do not even make money for Citibank.  Just incompetence, it seems.

NCT and Transworld

Yet another recurring theme of mine, bogus lawsuits on private student loan debts.

Transworld Systems has been one of most prolific debt collectors, filing more than 38,000 lawsuits in the last three years on behalf of a single client, the National Collegiate Student Loan Trusts. But many of the cases were flawed, as the debt collector churned out mass-produced documentation based on scant verification, according to legal filings by a federal regulator and a New York Times analysis of court records from hundreds of cases.

and

Alarmed by such problems, judges in Arizona, California, Florida, Louisiana, New Jersey, New York and other states have quashed hundreds of lawsuits.

“This is robosigning all over again,” said Robyn Smith, a lawyer with the National Consumer Law Center, a nonprofit advocacy group, referring to the way that banks, at the height of the mortgage crisis, brought thousands of foreclosure lawsuits without reviewing the underlying paperwork.

I wish more Michigan judges were quashing these cases, but my experience has been hit or miss.

Interesting.  An affidavit is supposed to be from personal knowledge of the facts in said affidavit.

The process for producing legal filings runs like an assembly line for making widgets. Transworld employees review 30 or 40 borrower files in a typical day, according to testimony from Bradley Luke, the company’s senior litigation paralegal, during a deposition in June.

When an affidavit, a legally binding statement laying out evidence in a case, is needed, Transworld’s software automatically fills in details like the amount owed, according to Mr. Luke’s testimony. From there, a document production team finishes preparing the file, then hands it over to an “affiant” — typically a low-level employee with no legal training — for a review and signature.

Disgusting and disgraceful.

NCT, For Profit, More Student Loan Messes

Wow, NCT (National Collegiate Trust) just gets messier. The entity, which bought private student loans, made a deal with the CPFB (Consumer Protection Finance Bureau) last week, which is being challenged. Which Entity Owns the Student Loans? This is the problem NCT has had, and I have successfully defendant some of their student loan lawsuits… Continue Reading

Student Loan Solution?

So, I have thought for a while that part of the resolution to the student loan crisis was for the government to get out of the business of student loan lending, which has caused tuition costs to skyrocket without any increase in the value of a college degree.  And that part of getting the government… Continue Reading

Student Loan Problems?

For student loan problems, be careful whom you pay. Like many attorneys, I give free consultations. And have a written retainer agreement before I take any money from clients. Game of Loans Full marks to whoever came up with the name for the crackdown on crooked student debt relief providers. Federal and state authorities are… Continue Reading

Student Loan Discharge Cases

Let’s look at a recent student loan discharge case result in bankruptcy court. Disbarred Lawyer? Not the most sympathetic plaintiff, right? First, in order to discharge, get out of, a student loan in bankruptcy court, you have to file a lawsuit against the student loan lender(s).  So, you are the plaintiff. Thanks to friend Bobby… Continue Reading

Student Loan Mess – PSLF

PLSF (Public Service Loan Forgiveness)  started ten years ago, providing forgiveness of the balance of student loans after ten years of payments IF you worked in qualified jobs during those ten years. Who Will Qualify for PSLF? Unfortunately, lots of folks who think they are getting student loans forgiven – will not. From the Jillian… Continue Reading

Is The Government About To Nail NCT?

NCT (National Collegiate Trusts) is a frequent subject of my student loan blog posts. What Is NCT again? NCT is a company, well, 15 separate trusts, that buy (allegedly) private student loans from banks, packages them into trusts that, well, let me quote from the Bloomberg news site article by Shahien Nasiripour: The trusts, created more… Continue Reading

PSLF and More Student Loan News

First, another view of the student loan   debt crisis, then, PSLF.   Donald L. Swanson frames the issue nicely, especially for high endowment schools. He goes through the high, no, astronomical, cost of attending Northwestern, even though its endowment is just shy of ten billion dollars, and will exceed that by 20% if its current… Continue Reading

Student Loan Servicer Abuses

Student Loan Servicer Abuses, another recurring topic. Jillian Bergman on the MarketWatch site: student loan servicers — the companies hired by the federal government to help borrowers manage their debt — create confusion and make paperwork errors that keep borrowers from reaping the program’s benefits.  Well, the incentive is for the servicer to get lenders… Continue Reading

Student Loan News Update

Student Loan servicers will become   student loan servicer under the new proposal 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: Ensure superior customer… Continue Reading