Student Loans, Schools

NCLC has just released a new Student Loan Toolkit, a free online resource, and an essential aid in advising student loan borrowers nationwide. It includes fillable forms to collect key information and point to next steps based on that data. This article describes the toolkit and explains how best to use it, as well as listing other essential resources to advise student loan borrowers.

Forty-five million borrowers are scrambling to figure out options for managing their federal student loans before repayments resume this fall. This article sets out new student loan rights: fresh starts for those in default; the SAVE repayment plan; lower interest charges; avoidance of school arbitration provisions; and easier paths to public service loan forgiveness, bankruptcy discharges, and five types of statutory loan cancellations.

This article describes new major relief for student loan borrowers: $10,000 or $20,000 for millions of borrowers, and added relief for those in public service, in default, with disabilities, attending specific schools, with private loans, or with IDR plans. New loan servicers and no more private debt collectors. The article links to more detail and sets out steps borrowers should take now to make the most of the offered relief.

Widespread misrepresentation about private student loans not being dischargeable in bankruptcy leads to significant consumer remedies. This article explains how to tell if a private student loan is dischargeable in bankruptcy, and sets out remedies where creditors misrepresent that a loan is non-dischargeable or continue collection after a bankruptcy discharges the loan. Other claims are listed against private student loan lenders.

This article explains the implications two new student loan developments. A Navient settlement discharges on average $25,000 of debt for 66,000 private student loan borrowers and provides $260 restitution to 365,000 federal Direct Loan borrowers. The Department of Education has extended its suspension of federal student loan payments until May 1, 2022, with the balance accruing at zero percent interest.

Recent circuit and district court decisions find federal preemption inapplicable to many state law deception claims against student loan servicers. The article lists common servicer abuses, explains how the new cases reject the Department of Education’s preemption claims, and analyzes which state law claims will be most effective in seeking remedies from student loan servicers.

This article details rights to cancel, reduce, and delay federal student loan payments, how to get out of default short of making back-due payments, as well as the methods the government has to enforce payment. Student options concerning private student loans are also examined.

A court has ordered that long-delayed Dep’t of Ed. rules become effective October 16, 2018. This article explains how the rules now: prohibit schools from requiring mandatory arbitration or class waivers of certain student claims, even for preexisting agreements; increase the availability of closed school and false certification discharges; and improve the administrative process for students to raise school-related defenses on their loans.

Starting December 17th student loans disbursed before Oct. 2011 should be eligible under REPAYE for the same favorable income-driven repayment terms offered to borrowers with more recent loans (under IBR and PAYE). The details are found in this article.

New U.S. Department of Education rules, effective July 1, 2020, create complexity as to applicable requirements concerning the borrower defense discharge, the closed school discharge, and school use of mandatory arbitration clauses. This article explains varying rules for loans issued prior to July 1, 2017, from July 1, 2017 through June 30, 2020, and after July 1, 2020.