A Federal Report On How To Fix the Student Loan Crisis Is Finally

A Federal Report On How To Fix the Student Loan Crisis Is Finally

Last year, the Consumer Financial Protection Bureau launched an inquiry into the state of the student loan industry by requesting public input on their experience dealing with servicers, lenders and educational institutions. After receiving and analyzing more than 30,000 responses from current and former students across the nation, the agency has released a report detailing its recommendations for reforming the industry.

Since approximately 1 in 4 student loan borrowers are either already in default or having a difficult time trying to repay their loans, the report stresses the need for reform of the entire industry, as well as for more consumer protection rules to be put into place.

One of the biggest complaints from borrowers was the disorganized way in which their loans are handled, with many claiming their lending firm misapplied payments, lost important documents and made clearing up mistakes virtually impossible. People were also frustrated by the fact that they weren’t provided with affordable repayment plans that would allow them to avoid going into default. The CFPB recommended setting a consistent, market-wide standard to eliminate the confusion and make repayment easier for all borrowers.

Another criticism that arose in the inquiry was with regards to the level of customer service that individuals received. Under the CFPB’s recommendations, loan services would be required to provide clear answers to their clients’ questions and to work with them to resolve any issues that may arise. There would also be more information about the performance of service providers available to the public. This would allow borrowers the opportunity to see what repayment plan options a given company offers and how their performance is rated before they sign on for loans rather than after.

The CFPB inquiry found a number of other disturbing trends in the student loan industry, from auto-defaults when a co-signer dies or declares bankruptcy to the obstruction of refinancing options on loans with high interest rates. It’s also fairly common for the transfer of a loan from one servicer to another to result in surprise fees, processing issues and lost account records that can wind up costing the borrower thousands of dollars.

Those who have borrowed money for student loans can get help finding out about repayment options using the CFPB’s Repay Student Debt tool. If you’ve experienced problems with a student loan servicer or debt collector, you can also submit a formal complaint about your experience to the Consumer Financial Protection Bureau.

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.

capella-university-receives-complaints

Are You Being Threatened With Legal Action On Private Student Loans

Are You Being Threatened With Legal Action On Private Student Loans?

If you’re facing legal action due to outstanding private student loans, it might serve as some small comfort to know that you’re not alone.  Thanks to the current state of the private student loan industry, a good number of students who took out loans in order to go to school are now finding that the reward for all the hard work they put in is life under a cloud of harassing bill collectors and the constant threat of a costly lawsuit by a collection agency.

Because they know that their clients are in no position to fight back, many private lending firms are all too willing to take them to court as a means to collect whatever they can, fully aware of the fact that their actions will leave the person completely destitute and with no way to make a living.  It has become increasingly clear over the past several years that the laws governing the student loan industry are heavily stacked against the students and are designed to give the lenders an alarming level of power over them.

In one case, a graduate who filed for bankruptcy specifically for the purpose of focusing all of their energy on repaying their student loans was horrified to discover that the filing resulted in their private loans automatically going into default and becoming due in full.  Their loan was sold to a pair of collection agencies and their monthly payments tripled, which canceled out any relief that they found from their bankruptcy.  Worse yet, they were routinely threatened by one of the agencies with legal action to garnish 50% of their wages.  This type of situation is precisely the reason that the student loan industry is in such dire need of a major overhaul by the federal government.

Too many former students are being forced to work two or three jobs just so that they can make the minimum payment on their student loans and avoid legal action that could very well destroy their financial reputation for years to come.  The fear and financial strain that they are living under creates undue stress and hardship and makes it impossible for them to live normally or save for their future.  It simply isn’t healthy for any society’s future when an entire generation of college graduates feels as though getting their degree was the worst financial decision they ever made, and they are 100% right.

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.

Lincoln Technical Institute Fraud and Lawsuit Complaints

Lincoln Technical Institute Fraud and Lawsuit Complaints

Individual and class action lawsuits keep popping up on the horizon which claim that Lincoln Technical Institute has committed fraud against their students. Students were led to believe that their education with this company was of the highest quality, had high job placement rates, and that they would be receiving comfortable salaries on their successful completion of the programs.

The claim by former employees that Lincoln Technical Institute evaded regulations put in place to crack down on predatory lending and enrollment practices were ignored. Those who met enrollment numbers were paid incentives and bonus which are not permitted under regulation.

Student complaints and lawsuits indicate that they paid high tuition for programs that used uneducated instructors. Some instructors were so unknowledgeable that students had to show them how to use the tools and equipment required for the program. Many student complaints indicate that their culinary program had no ingredients to use for classes, that mechanic classes on engine repair would have no engines for weeks at a time, or that computer systems used by instructors were so defective they were unusable.

Those who chose to stay on campus and take part in the meal program found themselves sharing cramped spaces the size of a closet with a roommate. Food was substandard and overpriced with prices fluctuating for the same item from day-to-day. As students would go to pay for their food using their meal card they were often told they would have to throw in some cash as their card allotment for the day wouldn’t cover the full amount.

Unprofessional behavior was fairly commonplace as per student complaints. Instructors often had affairs during class hours with other instructors or former students, and would fail anyone who questioned the appropriateness of such conduct. Students have had their hair pulled, been publically insulted and humiliated, and work turned in of different quality by different students all received the same marks. Safety equipment was often absent or unavailable and improvising was encouraged when carjacks and other such devices were required.

Law firms are still actively taking clients who wish to participate in class action lawsuits against Lincoln Technical Institute and individual lawsuits are too numerous to count. Withdraw rates were extremely high and many people were unable to complete the programs offered or find work in their field with their unaccredited degree. As Lincoln reported that its funding received from federal student loans and programs was at 82.7 percent in 2010, and considering this does not take into account the revenues from military personnel or veterans receiving federal funding, Lincoln Technical Institute did not only scam and commit fraud against its individual students, it defrauded the government and taxpayers out of millions.

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.