Colleges Offer Substandard Financial Services to Students, Report Finds
Many colleges offer financial services to their students that carry “junk fees” and terms that are no better, or even worse, than terms available on the open market, according a report released today by the Consumer Financial Protection Bureau (CFPB). “Many college students trust that schools have their best interests in mind. While colleges have […]
For-Profit Stratford University Closing
Another for-profit university is closing because of accreditation issues. Stratford University is closing its campuses in Virginia, Maryland and India at the end of the term, according to an email sent to students last Friday. Forty-three other schools around the country are also losing their accreditation. The school said the U.S. Department of Education decertified […]
Biden Cancels Corinthian College Student Debt
The controversy swirling around student debt cancellation largely ignores the fact that many of those drowning in debt were enrolled at for-profit schools that provided education widely regarded as worthless. Corinthian Colleges topped the list of for-profit schools that signed students up for federal loans and then delivered a substandard education that did nothing to […]
Debt-Relief Scheme Targeted Student Borrowers, Must Pay $11 Million
Consumers burdened with student loan debt are a tempting target for scam artists. One company accused of bring an integral cog in such a scheme has been ordered to pay $11 million, including $8.7 million in refunds to consumers. “Too often, bad actors take advantage of student loan borrowers and others who are seeking to […]
Edfinancial Fined for Misleading Student Borrowers
The latest development in the scandal-ridden student loan program involves a small Tennessee company, Edfinancial Services, ordered to pay a $1 million civil penalty for misleading student borrowers. “Edfinancial’s failure to tell the full truth to borrowers, so it could pad its bottom line highlights a systemic problem with loan servicing,” said Rohit Chopra, director […]
Feds Warn Against Lies About Public Service Loan Forgiveness
The Consumer Financial Protection Bureau (CFPB) is warning student loan servicers not to make deceptive statements about loan forgiveness for students who go on to work in public service jobs. “Illegal conduct by a student loan servicer can be ruinous for borrowers who miss out on the opportunity for debt cancellation,” said CFPB Director Rohit […]
Loans Forgiven for Students at DeVry, Other For-Profit Schools
The U.S. Department of Education continues sifting through claims from former students at for-profit universities and is forgiving $415 million in loans owed by students at DeVry University and other schools. “The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” said U.S. Secretary of Education […]
Student Lender Navient to Pay $1.85 Billion to Borrowers
Giant student loan servicer Navient has agreed to pay $1.85 billion to student loan borrowers nationwide, settling a lawsuit filed by a coalition of state attorneys general in 2009. The settlement resolves claims that despite representing that it would help borrowers find the best repayment options, Navient steered struggling student loan borrowers into costly long-term […]
Student Debt Scheme Netted $31 Million, Feds Charge
The millions of consumers struggling to pay off student loan debt constitute a fertile field for unscrupulous scam artists, many peddling debt-relief schemes that do nothing but drain the victims’ checking account. One such company, the Federal Trade Commission charges, is Automatic Funds Transfer Service, a payment processor that the FTC says facilitated a fraudulent […]
Online Trading Academy Customers In Line For Debt Forgiveness
A large group of Online Trading Academy customers will have their debts erased under a proposed settlement with the Federal Trade Commission. It’s the second shoe to drop in the OTA case. In September 2020, OTA was ordered to pay refunds of more than $10 million to consumers who had signed up for OTA’s training […]
For-Profit Colleges Warned about False Promises
The Federal Trade Commission has warned 70 for-profit colleges to be careful. The agency is cracking down on false promises about the jobs and salaries graduates can expect and warning schools that violators face “significant” financial penalties. “For too long, unscrupulous for-profit schools have preyed on students with impunity, facing no penalties when they defraud […]
Many Student Borrowers are Underwater, Paying Interest on Interest
Payday loans are often described as the ultimate form of predatory lending but a new study suggests student loans may be in the same league. The study found that nearly two-thirds of students who made payments during the pandemic pause were underwater on their loans – meaning they owe more than the original amount of […]
Off to College? Read This First
Again this year, new and returning college students face health threats from Covid-19, raising concerns about vaccines, masks, crowded events, dorm living and so forth. But something else to be concerned about is financial health, often jeopardized by poor financial habits, scams, and super-sized student loans. Although they’re often legally adults, most college students are […]
Student Loan Payback Deadline Extended Through January
Even better than delaying final exams, the Biden administration is extending the moratorium on federal student loan payments through Jan. 31, 2022, averting a deadline that had been set for the end of this month. But like a teacher cautioning that this would be the last warning, the Education Department said this would be the […]
Student Loan Moratorium Winding Down as Tensions Rise
As the pandemic-linked moratorium on student loan payments nears its end, there are fears that millions of borrowers won’t be able to resume payments, bringing increased calls for reform of the scandal-plagued program. A group representing borrowers charged today that the student loan industry has been “engaged in a widespread, illegal scheme to cheat public […]
Student Loan Scheme Victims Getting Refunds
There are some people who would argue that the federal government is the biggest student loan scammer out there, given how many people were falsely promised their loans would be forgiven if they worked in public service jobs. So far only five percent have had their loans forgiven. But that’s a story for another […]
Does ‘Ed Tech’ Deliver on its Promises?
When the COVID-19 pandemic devastated classroom teaching, there was widespread optimism that technology would fill the gap. School districts and colleges rushed to implement remote learning strategies. The results are still out but many schools have had problems keeping the systems running and, even worse, keeping students interesting. Now, a new study of how educational […]
$50 Million on the Way to University of Phoenix Students
More than 147,000 University of Phoenix students will soon be collecting $50 million in refunds following a lawsuit filed by the Federal Trade Commission (FTC). The lawsuit alleged that the for-profit school used deceptive advertisements that falsely touted its relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross. […]
Pennsylvania Alleges Student Loan Forgiveness Offer Was a Scam
Student loan forgiveness has been a big topic on the campaign trail recently but it is still more of a concept than a reality, creating attractive opportunities for scammers. In Pennsylvania, Attorney General Josh Shapiro announced that his office has shut down a California-based company that was allegedly operating an illegal student loan forgiveness scheme […]