Skip to main content

Search

Student Loan Law: 2.5.5 Professional Judgment and Additional Limits on Borrowing

Financial aid administrators may use professional judgment on a case-by-case basis to alter the data used to calculate the expected family contribution or to adjust a student’s cost of attendance.144 This discretion includes refusing or reducing loan funds as long as the reasons are documented and not due to discrimination on the basis of race, national origin, religion, sex, marital status, age, or disability status.145 In some cases, the use of professional judgment allows a student to borrow

Student Loan Law: 2.6.3 Stafford Loan Interest Rates

Stafford Loans are either subsidized or unsubsidized. Students can receive a subsidized and an unsubsidized loan for the same enrollment period.

A subsidized loan is awarded on the basis of financial need. The key difference between the two types of Stafford Loans is that, for subsidized loans, borrowers are not charged any interest before the repayment period begins or during authorized periods of deferment. In essence, the government “subsidizes” the interest during these periods.

Student Loan Law: 2.6.5 Consolidation Interest Rates

Consolidation loans have fixed interest rates. The fixed rate is based on the weighted average of the interest rates on the loans at the time of consolidation, rounded up to the nearest one-eighth of a percentage point. For loans made as of July 1, 2013, there is no longer an 8.25% cap on consolidation loan interest rates.196

Student Loan Law: 2.7.1 Origination Fees

Originations fees have changed over time due to sequestration requirements and amendments to the Higher Education Act. Both FFEL Program loans and Direct Loans have origination fees, with a higher fee applied to PLUS loans. There are no origination fees for Perkins Loans or consolidation loans.

Student Loan Law: 2.7.2 Late Charges and Other Fees

Borrowers may be required to pay a late charge of up to six cents for each dollar of each installment that is late.205 The charge may be assessed if the borrower fails to pay all or a portion of a required installment payment within thirty days after it is due.206 Although late charges are allowed, the Direct Loan servicing contracts in effect as of 2014 stated that, while the servicer has the ability to impose late charges and other fees, these assessments should not be made “at this time.”

Student Loan Law: 2.8.3 Consolidation Loan Disclosures

There are currently no mandatory disclosures required when a borrower applies for a consolidation loan. The Department amended the regulations in 2013 and removed the separate disclosure requirements for consolidation loans.

Student Loan Law: 2.9 Counseling Requirements

The Higher Education Act includes counseling requirements when borrowers first incur loans and after they withdraw or graduate. Initial counseling is supposed to occur prior to the release of the first loan disbursement.165

Student Loan Law: 17.2.5 Gaps in Federal Enforcement

If the Department determines that a school has failed to comply with any of the regulations or standards described above, it has the authority to take a number of actions depending on the regulation violated.

Student Loan Law: 17.2.6 Federal Student Aid Feedback System

Since 2016, the Department has had the Federal Student Aid (FSA) Feedback System, which includes an online complaint portal.343 Students, borrowers, advocates, and others can submit information about schools’ administration of federal student aid programs as well as unfair or deceptive recruitment and marketing practices.344 Complainants who submit using their FSA ID can track the progress and response to their complaint using the online portal.345

Student Loan Law: 17.2.7 Military and Veterans Benefits—For-Profit School Oversight

Many for-profit schools have aggressively recruited military-connected students because—prior to the 2022 change in the 90/10 rule—the education funds provided by the Department of Defense (DoD) and the Department of Veterans Affairs (VA) did not count towards the 90% cap on revenue from Title IV federal student aid—referred to as the 90/10 rule.352 As a result, for every veteran enrolled by a for-profit school, that school could often enroll nine more students who depend entirely on Title IV to pay for school.

Student Loan Law: 17.3.2.1 Generally

In July 2012, the Senate HELP Committee issued a report that described the for-profit education industry’s common use of high-pressure recruiting methods that involve inflated job placement rates and misrepresentations about graduate wages, the transferability of credits, and the employability of graduates in occupations that require licensure.412 State and federal law enforcement actions have targeted the same type of deceptive practices.413 This section examines for-profit abuses in recrui

Student Loan Law: 17.3.2.6 Diploma Mills

Diploma mills essentially sell meaningless or false college or high school credentials.481 Postsecondary diploma mills are defined as entities that (1) for a fee, offer degrees, diplomas, or certificates that may be used to represent to the general public that the individual possessing such a degree, diploma, or certificate has completed a program of postsecondary education or training; (2) require such individual to complete little or no education or coursework to obtain such degree, diploma, or certificate; and (3) lack accreditation by a

Student Loan Law: 17.3.2.8 Online Program Management (OPM)

Online program managers (OPMs) are third-party, for-profit companies that provide services to colleges related to the development and operation of online programs. Colleges contract with OPMs for services such as instructional design, technological platforms, operational services, student recruitment, marketing, faculty training, and student support.

Student Loan Law: Introduction

As discussed in more detail in Chapter 1, supra, loan originations through the Federal Family Education Loan (FFEL) Program ended July 1, 2010. Although no new FFEL Program loans were disbursed after this date, many guaranty agencies continue to service and collect on the outstanding FFEL Program loans that were made before the program was eliminated. Some of these agencies also service Direct Loans.

Fair Debt Collection: 2.1 Introduction

The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 to 1692p, and its implementing rules under Regulation F, 12 C.F.R. Part 1006 (effective November 30, 2021), provide powerful tools for consumers who have been harassed, abused, or treated unfairly by debt collectors. Bringing a claim under the FDCPA involves many different, complex steps. This chapter provides a brief overview of some of the initial steps an attorney must consider when bringing an FDCPA claim.

Consumer Bankruptcy Law and Practice: ARIZONA

Has state opted out of federal bankruptcy exemptions? Yes. Ariz. Rev. Stat. Ann. § 33-1133.

Is opt out limited to residents or domiciliaries of the state? Yes. Ariz. Rev. Stat. Ann. § 33-1133: “Residents of this state are not entitled to the Federal exemptions provided in 11 U.S.C. § 522(d).” See In re Rody, 468 B.R. 384 (Bankr. D. Ariz. 2012) (Arizona opt-out applicable only to Arizona residents).

Do state’s exemptions have extraterritorial application?

Consumer Bankruptcy Law and Practice: NORTH DAKOTA

Has state opted out of federal bankruptcy exemptions? Yes. N.D. Cent. Code § 28-22-17.

Is opt out limited to residents or domiciliaries of the state? Yes. N.D. Cent. Code § 28-22-17: “Residents of this state are not entitled to the federal exemptions provided in [§ 522(d)]. The residents of this state are limited to claiming those exemptions allowable by North Dakota law.”

Do state’s exemptions have extraterritorial application?

Homestead: Uncertain.

Consumer Bankruptcy Law and Practice: IOWA

Has state opted out of federal bankruptcy exemptions? Yes. Iowa Code § 627.10.

Is opt out limited to residents or domiciliaries of the state? Not specified, but probably not. Iowa Code § 627.10: “A debtor to whom the law of this state applies on the date of filing of a petition in bankruptcy is not entitled to elect . . . [§ 522(d) exemptions].” See In re Williams, 369 B.R. 470 (Bankr. W.D. Ark. 2007) (debtors residing in Arkansas are subject to Iowa opt-out statute).

Consumer Bankruptcy Law and Practice: NEVADA

Has state opted out of federal bankruptcy exemptions? Yes. Nev. Rev. Stat. § 21.090(3).

Is opt out limited to residents or domiciliaries of the state? Yes. Nev. Rev. Stat. § 21.090: “Any exemptions specified in [§ 522(d)], do not apply to property owned by a resident of this State . . . .”

Do state’s exemptions have extraterritorial application?