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Student Loan Law: 8.6.4.4 Raising Defenses After a Loan Has Been Consolidated

A loan consolidation has significant benefits for most student loan borrowers in default.355 However, one problem is that consolidating a student loan may make it more difficult to raise defenses to collection on that loan in litigation. The lender may argue that the new consolidated loan is a novation and that defenses to the old loan do not apply to the new loan.

Student Loan Law: 8.6.4.5 Defenses for Servicemembers

The Servicemember Civil Relief Act (SCRA) limits collection tactics and enforcement of claims against active duty military personnel.358 To be entitled to the SCRA’s protections, the servicemember must either be in or recently released from military service. “Military service” is defined in part as active duty.359

Student Loan Law: 8.7 Vacating Collection Judgments

Borrowers may already have judgments entered against them. In these cases, advocates should consider attempting to vacate the judgments. This is especially critical because borrowers have fewer rights if judgments have already been entered against them. For example, they may not consolidate or rehabilitate loans in these circumstances.376 Advocates may negotiate with creditors to vacate judgments or file motions in court.377

Student Loan Law: 34 C.F.R. § 600.2 Definitions.

The following definitions apply to terms used in this part:

Academic engagement: Active participation by a student in an instructional activity related to the student's course of study that—

(1) Is defined by the institution in accordance with any applicable requirements of its State or accrediting agency;

(2) Includes, but is not limited to—

Student Loan Law: 34 C.F.R. § 600.4 Institution of higher education.

(a) An institution of higher education is a public or other nonprofit educational institution that—

(1) Is in a State, or for purposes of the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, and Federal TRIO programs may also be located in the Federated States of Micronesia or the Marshall Islands;

(2) Admits as regular students only persons who—

Student Loan Law: 34 C.F.R. § 600.7 Conditions of institutional ineligibility.

(a) General rule. For purposes of title IV of the HEA, an educational institution that otherwise satisfies the requirements contained in Secs. 600.4, 600.5, or 600.6 nevertheless does not qualify as an eligible institution under this part if—

(1) For its latest complete award year—

(i) More than 50 percent of the institution’s courses were correspondence courses as calculated under paragraph (b) of this section;

Student Loan Law: 34 C.F.R. § 600.10 Date, extent, duration, and consequence of eligibility.

(a) Date of eligibility.

(1) If the Secretary determines that an applicant institution satisfies all the statutory and regulatory eligibility requirements, the Secretary considers the institution to be an eligible institution as of the date—

(i) The Secretary signs the institution’s program participation agreement described in 34 CFR part 668, subpart B, for purposes of participating in any title IV, HEA program; and

Student Loan Law: 34 C.F.R. § 600.20 Notice and application procedures for establishing, reestablishing, maintaining, or expanding institutional eligibility and certification.

(a) Initial eligibility application.

(1) An institution that wishes to establish its eligibility to participate in any HEA program must submit an application to the Secretary for a determination that it qualifies as an eligible institution under this part. The Secretary must ensure prompt action is taken by the Department on any materially complete application required under this section.

Student Loan Law: Listing of Provisions, Source, and Authority

TITLE 34—EDUCATION

SUBTITLE B—REGULATIONS OF THE OFFICES OF THE DEPARTMENT OF EDUCATION

CHAPTER VI—OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

PART 668—STUDENT ASSISTANCE GENERAL PROVISIONS

SUBPART A—GENERAL

34 C.F.R. sec.

§ 668.1 Scope.

§ 668.2 General definitions.

§ 668.3 Academic year.

§ 668.4 Payment period.

Student Loan Law: 34 C.F.R. § 668.8 Eligible program.

(a) General. An eligible program is an educational program that—

(1) Is provided by a participating institution; and

(2) Satisfies the other relevant requirements contained in this section.

(b) Definitions. For purposes of this section—

(1) The Secretary considers the “equivalent of an associate degree” to be—

Student Loan Law: 34 C.F.R. § 668.12 Scope.

(a) This subpart establishes standards that an institution must meet in order to participate in any Title IV, HEA program.

(b) Noncompliance with these standards by an institution already participating in any Title IV, HEA program or with applicable standards in this subpart by a third-party servicer that contracts with the institution may subject the institution or servicer, or both, to proceedings under subpart G of this part. These proceedings may lead to any of the following actions:

Student Loan Law: 34 C.F.R. § 668.13 Certification procedures.

(a) Requirements for certification.

(1)(i) The Secretary certifies an institution to participate in the title IV, HEA programs if the institution qualifies as an eligible institution under 34 CFR part 600, meets the standards of this subpart and 34 CFR part 668, subpart L, and satisfies the requirements of paragraph (a)(2) of this section.

Student Loan Law: 34 C.F.R. § 668.32 Student eligibility—general.

A student is eligible to receive Title IV, HEA program assistance if the student either meets all of the requirements in paragraphs (a) through (m) of this section or meets the requirement in paragraph (n) of this section as follows:

(a)(1)(i) Is a regular student enrolled, or accepted for enrollment, in an eligible program at an eligible institution;

Student Loan Law: 34 C.F.R. § 668.71 Scope and special definitions.

(a) If the Secretary determines that an eligible institution has engaged in substantial misrepresentation, the Secretary may—

(1) Revoke the eligible institution's program participation agreement, if the institution is provisionally certified under § 668.13(c);

(2) Impose limitations on the institution’s participation in the title IV, HEA programs, if the institution is provisionally certified under § 668.13(c);

Student Loan Law: 34 C.F.R. § 668.72 Nature of educational program or institution.

Misrepresentation concerning the nature of an eligible institution’s educational program includes, but is not limited to, false, erroneous or misleading statements concerning—

(a) The particular type(s), specific source(s), nature and extent of its institutional, programmatic, or specialized accreditation;

(b)(1) The general or specific transferability of course credits earned at the institution to other institution(s); or

Student Loan Law: 34 C.F.R. § 668.73 Nature of financial charges or financial assistance.

Misrepresentation concerning the nature of an eligible institution's financial charges, or the financial assistance provided includes, but is not limited to, false, erroneous, or misleading statements concerning—

(a) Offers of scholarships to pay all or part of a course charge;

(b) Whether a particular charge is the customary charge at the institution for a course;

Student Loan Law: 34 C.F.R. § 668.74 Employability of graduates.

Misrepresentation regarding the employability of an eligible institution’s graduates includes, but is not limited to, false, erroneous, or misleading statements concerning—

(a) The institution’s relationship with any organization, employment agency, or other agency providing authorized training leading directly to employment;

Student Loan Law: 34 C.F.R. § 668.75 Omission of fact.

An omission of fact is a misrepresentation under § 668.71 if a reasonable person would have considered the omitted information in making a decision to enroll or continue attendance at the institution. An omission of fact includes, but is not limited to, the concealment, suppression, or absence of material information or statement concerning—

(a) The entity that is actually providing the educational instruction, or implementing the institution's recruitment, admissions, or enrollment process;

Student Loan Law: 16.1.3.3 Tuition and Other Institutional or Direct-To-School-Owed Debt

When the tuition is not covered by loans or grants—or federal financial aid was returned to the Department of Education because a student withdrew or the amount of financial aid was miscalculated—students may end up owing unpaid tuition balances to their schools. Schools of all kinds—i.e., for-profit, private nonprofit, and public—often seek to collect unpaid tuition balances and, in some cases, interest and fees for nonpayment.