Category Archives: Student Loans

Dep’t of Ed approves $6 billion in student loan relief for students of college shut down amid fraud allegations

The Department of Education today approved roughly $6 billion in student loan relief for more than 300,000 students who attended The Art Institutes, a network of for-profit colleges that was plagued by fraud allegations before completely shutting down in September 2023. The chain’s parent company, Education Management Corporation, reached a nearly $100 million settlement with […]

States sue ED claiming targeted student loan relief is a “vote-buying scheme”

As many of us feared, those who support student loan debt have used the Supreme Court’s rejection of the Biden administration’s broad-based loan cancellation scheme to attack any debt relief offered by the Department of Education, regardless of statutory basis or how targeted it may be. Yesterday, in a rambling complaint including, for some reason, […]

California Judge Threatens to Hold Student Loan Servicers in Contempt

In 2019, a group of former for-profit college students brought a class action against the Department of Education, based on the agency’s failure to rule on their applications for borrower defense relief to their loans–or anyone else’s–for more than a year. After years of litigation, the parties reached a settlement, which was approved in November […]

3rd Circuit on Scope of CFP Act and Ratification Post-Seila Law

Nearly a year after oral argument, the Third Circuit this morning released its opinion in CFPB v. National Collegiate Master Student Loan Trust. The case is a long-running enforcement action brought by the CFPB against investment trusts that were created for the purposes of acquiring and servicing student loans, seeking to enforce civil investigative demands. […]

California court upholds $21 million penalty against for-profit college

The California Attorney General brought claims against for-profit online college Ashford University and its parent company for violating the state’s unfair competition and false advertising laws by making false and misleading statements to prospective students. The trial court agreed with the AG, and imposed over $22 miillion in civil penalties. Yesterday, an intermediate appellate court […]

CFPB reports on borrowers’ experiences after resumption of student-loan payments

The Consumer Financial Protection Bureau has published a report on student-loan servicing practices since the resumption of federal student loan repayments in the fall, after a three-year payment pause in light of the COVID-19 pandemic. The CFPB report finds that borrowers are “encountering long hold times when trying to reach their student loan servicer, experiencing […]

Court approves CFPB settlement re training provider’s abusive loan practices

In July, the CFPB and 11 states filed an adversary complaint in bankruptcy court against Prehired — a company that operated a private, for-profit vocational training program for software sales representatives. Promising entry-level wages of over $100,000, Prehired charged $30,000 for its program and encouraged students to enter into income share loans. The CFPB alleged […]

Tuition “Payment Plans” may not be as good as they seem, says CFPB

The CFPB today issued a report finding that “payment plans” offered by various postsecondary schools can carry risks to students, as they often include high fees, confusing and inconsistent disclosures, forced arbitration agreements, and snowballing interest. The Bureau also found that the third-party service providers schools partner with can engage in abusive debt collection practices. […]