The Consumer Financial Protection Bureau (CFPB) has published a report discussing the 22,900 complaints it received from student loan borrowers between September 2016 and August 2017. In its Annual Report of the CFPB Student Loan Ombudsman, the consumer protection agency listed the most common repayment complaints it received from borrowers with private and federal education debt. These complaints mention problems that include: Problems accessing federal loan protections: Borrowers reported difficulties accessing basic federal loan protections. For example, borrowers reported difficulties accessing protections that are designed to prevent default during periods of economic hardship. In some cases, borrowers with total and permanent disabilities had difficulties receiving loan discharges. Problems enrolling in income-driven programs: Income-driven programs allow borrowers to cap monthly payments to a percentage of their discretionary income. However, borrowers reported difficulties enrolling in and recertifying their income for these programs each year. Complaints mention problems with lost paperwork, poor customer…
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A new report released by the National Center for Education Statistics has discovered that 52 percent of student loan borrowers who attended for-profit schools and began repayment in 2003 have defaulted on at least one loan. By comparison, 26 percent of borrowers who attended community colleges and 17 percent who attended four-year schools have defaulted. Students who did not complete their degrees had the highest default rates. Although some for-profit schools help students obtain useful job skills, others have engaged in allegedly fraudulent business practices. However, some for-profit schools have been accused of conducting misleading advertising campaigns that promise students they will obtain high-paying jobs after graduation. These schools allegedly used falsified post-graduate employment statistics to attract more students. In reality, the programs were not accredited and many students did not find jobs after graduating. Only after throwing tens of thousands of dollars into these programs did students realize that…
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There is a common misconception that it is impossible to file for bankruptcy on student loans. While it may be very difficult to completely or partially discharge student loans in bankruptcy, we can assure you that it is not impossible. You should not be deterred from speaking with a bankruptcy attorney just because it is difficult to file for bankruptcy on student loans. Student loans are different than other types of debts in bankruptcy. To receive a discharge on these debts, you must show the bankruptcy court that repayment would impose an undue hardship on you or your dependents. The Bankruptcy Code does not provide a definition of undue hardship. Bankruptcy courts have offered varying definitions for this term and what it implies. Future student loan bankruptcy cases will continue to add to these definitions. Depending on where you file your case, the court will use either the Brunner test,…
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