Higher One Ordered To Compensate Students

Higher One Ordered To Compensate Students

Approximately 1.5 million students were paying fees in order to access their financial aid through Higher One Inc. The Federal Reserve and Federal Deposit Insurance Corp. is now ordering Higher One Inc. to compensate these students. For the time that Higher One Inc. was falsely advertising their services, 570,000 students opened accounts. These students will now be able to receive part of the $24 million that Higher One Inc. must pay in restitution fees. The company will also need to pay $2.23 million for a civil suit. WEX Bank in Utah also worked with Higher One Inc. and combined, the two companies will have to pay fines in the amount of $31 million to another 900,000 students. WEX Bank will also need to pay $1.75 million for a civil suit.

Federal Governor Lael Brainard stated, “Deceptive marketing practices with respect to student loans will not be tolerated. This action ensures that students who were misled into paying fees to access their financial aid funds will receive restitution for those fees.”

The U.S. Department of Education has been taking steps to ensure that students are not required to pay fees to access their financial aid money. They are able to choose how they receive their money instead of needing to open the One Account through Higher One Inc. Higher One Inc. had neglected to tell students about these options, as well as not giving them any fee or limitation information for the One Account. Higher One also displayed school logos during presentations and meetings, which allowed students to believe that the college was endorsing the product that was offered.

FDIC Chairman Martin J. Gruenberg stated, “It is important that financial products offered to college students under the sponsorship of their universities are clear, transparent and trustworthy.”

Higher One Holdings Inc. stated on December 15th that it was planning on selling all of their assets and liabilities which includes One Account to Customers Bank for $37 million. The parent company of Customers Bank is Customers Bancorp Inc. and Chief Financial Officer Robert Wahlman stated in a phone interview that he expects all issues to be completed before finalizing the sale.

If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, contact StudentLoanFAQ’s and speak to one of our advisors about student loan forgiveness. You may qualify to consolidate or even wipe out your remaining student loans.

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DeVry University Lawsuit Filed By The Federal Trade Commission

DeVry University Lawsuit Filed By The Federal Trade Commission

According to the Federal Trade Commission, DeVry University used false advertising in their recruiting, which led students to believe they would be more likely to find a job with higher pay if they chose DeVry over another college.

Edith Ramirez, FTC Chairwoman, states, “Millions of Americans look to higher education for training that will lead to meaningful employment and good pay. Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn.”

In the lawsuit, the Federal Trade Commission alleges that DeVry’s graduate job placement numbers of 90% within six months of graduation was misleading. The FTC also states that the higher income rate for the graduates was listed at 15% and was also deceitful. The advertising was done on television, radio, print and online.

DeVry was accused of counting graduates as working in their field, even though they were clearly not. Here are a few examples of this from the class of 2012:

1. A business administration graduate who specializes in health field management was working as a server in a restaurant.
2. Three technical management graduates were working as a delivery driver, mail carrier and an unpaid volunteer at a medical center.
3. A business administration graduate working as a car salesperson.

They also counted students as working even though they were in the same jobs from before they received their degree. It is alleged that DeVry counted graduates that were seeking employment as inactive, even though they were searching the databases and attending job fairs.

The U.S. Department of Education is notifying DeVry University that they need to cease advertising graduation job placement numbers until they can prove the numbers with complete accuracy.

Under Secretary of Education Ted Mitchell states, “As required by the law and expected by the public, institutions need to be accurate in their marketing and recruiting to prospective students. And we confirm this truthfulness of advertisements through the backup information schools provide upon request. The Department and the FTC’s related announcements today are the result of much collaboration and cooperation. We are grateful to our partners at the FTC for their hard work and dedication on this matter.”

The FTC is asking the courts to prevent DeVry from violating the FTC Act any further and to compensate former students.

If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, contact StudentLoanFAQ’s and speak to one of our advisors about student loan forgiveness. You may qualify to consolidate or even wipe out your remaining student loans.

 

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Defrauded Students Can Petition to Get Their Federal Loans Forgiven

Defrauded Students Can Petition to Get Their Federal Loans Forgiven

A little known law, which forgives the debt for former students who are able to prove that their schools recruited them using false information, has become very popular in recent months. The program is called the Defense To Repayment and in the last six months, over 7,500 people applied to have over $164 million of debt cleared from their accounts. This doesn’t include the $28 million of debt that was cleared for almost 1,300 of the former students at Corinthian Colleges.

Many students are finding that it is difficult to find the employment that the colleges had assured they would receive after graduation. Now that this law is being recognized, hundreds of thousands of students may be able to see a silver lining for their future. It is a way to get out from under this debt, since student loans are not included in bankruptcy options.

The Education Department is overwhelmed from the massive amounts of claims they are receiving, because the forgiveness program that was created in 1994 is very vague with details. It doesn’t specify what is needed to show that a school committed fraud and they are currently working on new guidelines for the program. Because of this, many people that are applying are doing so through attorney assistance or programs that has attorney oversight, providing the best chance of success.

The Education Department is currently trying to figure out how these refunds will be funded, since the cost will be in the billions and will eventually be paid by the taxpayers.

The Education Department’s undersecretary, Ted Mitchell, notes that regardless of the cost, if anyone has been defrauded, they are entitled to this forgiveness and potential reimbursements of what they have already paid out.

The number of applicants has grown because students are becoming more active in how things are done and have researched for ways to fix problems. This law had only been used five times prior to this past year.

The New York Federal Reserve shows that college debt has tripled in the past decade to $1.2 trillion and government data shows that seven million former students have defaulted on their student loans.

Most of the people who have applied for forgiveness of their loans under this program have attended for-profit colleges. The main for-profit colleges were Corinthian owned (Everest, Heald, Wyotech), the Art Institute, ITT Technical Institutes, University of Phoenix, UEI College, Devry, Argosy, Sanford-Brown, American Intercontinental University, (AIU) , The Brooks Institute, Le Cordon Bleu, Colorado Technical University, Kaplan University, Ashford University, Strayer University, Universal Technical Institute (UTI) and they have all been the focus of recent investigations because of their recruiting practices.

One of the students that wrote to the Education Department is Syd Andrade. He was promised “great facilities, great teachers and use of industry-standard software” by an Art Institute recruiter. Mr. Andrade spent most of his class time using outdated software and the students were teaching the teacher most of the time. When he graduated, the school helped him land a job at a local Office Depot for $8 an hour.

The most difficult task that the Education Department faces is determining which debt to forgive. It is tough for the Department of Education to take a petition seriously without a strong case presented, citing which state and federal laws were violated based on that individual’s experience.  So, if you are filing a petition, make sure you do a thorough job or get some help.

Unfortunately, many former students may not know that they may be entitled to the debt forgiveness program and many organizations are asking for a blanket wide forgiveness. That request is something that most experts say the Department of Education would never entertain due to the billions of outstanding debt.

If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, contact StudentLoanFAQ’s and speak to one of our advisors about student loan forgiveness. You may qualify to consolidate or even wipe out your remaining student loans.