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.

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Student Loan News
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Student Loan News
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Student loan borrowers are bankrupt, why not colleges? Student loan servicer abuses and NCT student loan lawsuits.
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NCT, For Profit, More Student Loan Messes

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