Student Loans

News & Analysis as of

Media reports on student loan debt: distortions abound

Two recent articles highlight how student loan debt is often the subject of distorted reporting. An article from Hamilton Place Strategies observed that news stories often include anecdotal stories about families...more

Discharging the Brunner Test: Student Loan Debt in Bankruptcy

Twenty-seven years ago the Second Circuit was faced with a debtor who proposed to use the Bankruptcy Code to avoid her student loan debt – only five months after graduation. The Second Circuit came down harshly on Ms. Brunner...more

CFPB calls out banks for not publicly disclosing campus financial product marketing agreements

According to a new blog post about “secret banking contracts” by Rohit Chopra, the CFPB’s Student Loan Ombudsman, the CFPB is sending letters to colleges and universities “to make sure they know that their bank partner has...more

Another report debunks comparison between student debt and mortgage loan crisis

A new report from The Vanguard Group disagrees with those who seek to draw comparisons between the current level of student debt and the level of mortgage debt that led to the housing crisis. Titled “No bubble to...more

State Attorneys General Bringing Actions Under Dodd-Frank

As the CFPB celebrates its three-year anniversary, the current trend appears to be lawsuits brought by state attorneys general or state regulators pursuant to their authority under Dodd-Frank Section 1042. Under Section 1042,...more

Members Of Congress Caution Education Department On Aid Disbursement Rulemaking

Over the past week, members of Congress from both parties have sent several letters to the Department of Education (DOE or ED) regarding its ongoing rulemaking related to the ways higher education institutions request,...more

More on the debate over the impact of student loan debt on home ownership

We recently wrote about a new Brookings Institution report which suggested that charges coming from various quarters, including the CFPB, that student loan debt is causing young adults to postpone home ownership are...more

Education Department OIG Reports On Borrower Complaints Against Collection Agencies

On July 15, the Department of Education’s Office of Inspector General (OIG) published a report on its audit of the Department’s Federal Student Aid (FSA) office, which revealed that the FSA has failed to effectively: (i)...more

Illinois AG Sues Student Debt Relief Firms

On July 14, Illinois Attorney General (AG) Lisa Madigan announced that her office filed separate civil lawsuits in state court against two student debt relief firms and their principals. The lawsuits allege that the...more

Capital Thinking: Education

Higher Education Act Draft Legislation - Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA) will release a package of Higher Education Act (HEA) proposals this week. The package will...more

New studies challenge CFPB claims that student loan debt is discouraging homeownership

The charge that student loan debt is causing young adults to postpone home ownership has come from various quarters, including the CFPB. However, two new studies, one the subject of an article released earlier this year and...more

Repairing The Parent Child Relationship When College Is An Issue

In New Jersey, a parent has an obligation to contribute to his or her child’s college education. There are a number of factors that a Court typically considers when determining the amount of the contribution. The primary...more

President Obama Announces Student Loan Initiatives; Senate Student Loan Refinance Bill Fails

On June 9, President Obama announced numerous initiatives related to federal student loans and signed a presidential memorandum directing the Education and Treasury Departments to execute certain of those initiatives. The...more

CFPB Director Announces Prepaid Card Rule Delay, Discusses Other Initiatives

On June 10, CFPB Director Richard Cordray testified before the Senate Banking Committee in connection with the CFPB’s recently released Semiannual Report to Congress. The hearing covered a broad range of topics, including,...more

Obama takes action to increase assistance to student borrowers

President Obama issued a Presidential Memorandum last Monday directing the Secretary of Education to issue regulations that allow additional students to take advantage of a program to cap their student loan payments at 10...more

Rating Agency Developments

On June 13, Moody’s announced that its private student loan default rate index will continue to decline. On June 13, Fitch announced that it has taken various conforming rating actions on enhanced municipal bonds and...more

Senator Hagan Introduces the Servicemember Higher Education Protection Act

New legislation, titled the Servicemember Higher Education Protection Act (the “Bill”), was introduced recently by Senator Kay Hagan (D-NC). The Bill includes several provisions that expand protections under the...more

Student Loan Refinancing Bill Stalled in Senate

Late last week, the student loan refinancing bill introduced by Senator Warren (D-MA) came up 4 votes short of the 60 needed to end debate and prevent a filibuster. If enacted, S. 2292, the Bank on Students Emergency Loan...more

Senate Committees Hold Hearings on Student Loans

In the wake of recent focus on student loan debt, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on the “Student Loan Servicing: the Borrower’s Experience.” The concern shown in some testimony at...more

Director Cordray testifies before Senate committee

Yesterday, the Senate Committee on Banking, Housing and Urban Affairs heard testimony from Director Cordray at its hearing titled “The Consumer Financial Bureau’s Semi-Annual Report to Congress.” Noteworthy aspects of...more

Higher Ed False Claims Act Suits – Pass or Fail?

Career Education Corporation, like a host of other for-profit education companies, has found itself spinning on the courthouse revolving door. The latest legal challenge for CEC: a False Claims Act suit filed in federal court...more

Senate holds hearings on student loans

Last Wednesday, the Senate Budget Committee and the Senate Banking Committee held separate hearings about student loans. Interestingly, the CFPB was represented in only one of the hearings. The Senate Budget Committee...more

Private Fund Update - June 2014

In this issue: - The 113th Congress - The Administration - Securities and Exchange Commission - Association for Corporate Growth (ACG) - Private Equity Growth Capital Council (PEGCC)...more

Illinois Attorney General Files UDAAP Action Against For-Profit College

The Illinois Attorney General, who filed suit two years ago under the Illinois Consumer Fraud and Deceptive Business Practices Act against a group of entities related to for-profit college financing, amended its complaint to...more

Cordray Discusses Student Loans at Boulder Summer Conference on Consumer Financial Decision Making

Director Cordray spoke at the Boulder Summer Conference on Consumer Financial Decision Making this week, addressing student loan debt as a “pressing problem and a matter of grave importance to public policy in America.”...more

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