Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 17 posts in Student Loans.

First Circuit Considers Whether Student Loan Debt May Be Dischargeable Through Bankruptcy

A case pending before the Court of Appeals for the First Circuit could upend the established rules for paying off student loans. In Murphy v. Dep’t of Educ., et al., no. 14-1691, plaintiff-appellant Robert Murphy principally alleges that the trial court erred in concluding that the plaintiff-appellant’s student loan repayment would not constitute an “undue hardship” under the relevant portion of the Bankruptcy Code. If the First Circuit agrees with Mr. Murphy, certain student loan debt currently excluded from discharge through bankruptcy could become dischargeable, and lenders could be left holding the bag. Read More ›

CFPB Releases Report and Resources on Student Loan Repayment

This week, the Consumer Financial Protection Bureau (CFPB) reaffirmed its focus on the problem of intractable student loan debt.  On October 16, 2014, the CFPB Student Loan Ombudsman released his Annual Report, which described the number and nature of student loan complaints handled by the CFPB in the preceding year and issued recommendations for the coming year Read More ›

CFPB Targets For-Profit Corinthian Colleges for Alleged Predatory Lending

On September 16, 2014, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a lawsuit against Corinthian Colleges (Corinthian), which operates nearly 100 for-profit colleges under the names Heald, Everest, and WyoTech.  The CFPB charges Corinthian with predatory lending and alleges that Corinthian inflated tuition costs, misrepresented students’ career prospects, and engaged in aggressive and embarrassing debt collection tactics, even while students were still enrolled in school. The Complaint outlines in detail Corinthian’s alleged internal policies of targeting individuals with “low self-esteem,” who are “isolated,” and have “minimal to non-existent understanding of basic financial concepts.”  Read More ›

No Student Borrower Left Behind: The Bank on Students Emergency Loan Refinancing Act

New proposed legislation attempts to address the problem of exploding student loan debt, but the bill is unlikely to gain enough support to pass.   Read More ›

CFPB Issues Consumer Advisory and Sample Letters in Response to Mid-Year Report on Student Loan Complaints

The Consumer Financial Protection Bureau (CFPB) recently released a report on student loan complaints. Specifically, the report highlights complaints concerning co-signer issues on student loans. Many private student lenders advertised that their loans contained an option to release a borrower’s co-signer after a certain period of on-time payments. The complaints describe the bureaucratic obstacles borrowers are facing when seeking to obtain these releases. In addition, complaints reveal that borrowers often have to apply for a release but they are generally not provided with the criteria for co-signer release from the lenders and servicers.  Read More ›

CFPB Sues ITT Educational Services for Predatory Lending Practices

On February 26, 2014, the Consumer Financial Protection Bureau (CFPB) filed a four-count complaint in the U.S. District Court for the Southern District of Indiana against for-profit college chain, ITT Educational Services, Inc. (ITT), alleging that ITT engaged in predatory student lending.  The CFPB asserts that ITT exploited its students by encouraging them to take on high-cost private student loans that they knew were destined to end in default.  As relief, the CFPB is seeking restitution for victims, a civil fine, and an injunction against ITT for its deceptive lending practices. Read More ›

CFPB Continues Focus on Student Loans, Opening Complaint and Feedback Tool for Servicemembers and Veterans

In its continuing effort to ramp up oversight of student loans, on January 30, 2014, the CFPB announced the opening of a new online student complaint system specifically for servicemembers, veterans, and their families to report negative experiences at education institutions and training programs administering the Post-9/11 GI Bill, DoD Military Tuition Assistance, and other military-related education benefit programs.  Read More ›

CFPB Continues to Ramp Up Oversight and Protection for Students

On December 3, 2013, the CFPB announced that it would begin supervising certain non-bank student loan servicers. Two weeks later, on December 17, 2013, it called on financial institutions to publicly disclose their agreements with colleges and universities to market debit and credit products to students. Read More ›

CFPB Extends Supervisory Power to Federal Student Loan Servicers

On December 3, 2013, the CFPB announced that it had finalized a proposed rule which would allow the agency to begin supervising certain non-bank student loan servicers for the first time.  The CFPB is already supervising student loan servicing conducted by the nation’s largest depository institutions.    Read More ›

CFPB Hosting Student Loan Hearing: New Rules On The Way???

On May 8, 2013, the CFPB is hosting a field hearing at Miami Dade College in Florida "on student loan borrowers." The CFPB holds field meetings on a regular basis without much fanfare, but what makes this hearing different is that the "event will feature remarks from [Director Cordray]." Cordrary's attendance at a "field hearing" is traditionally coupled with a "major announcement" from the CFPB , e.g. the release of data/information from the CFPB's compliant database, issuance of recommended procedures, or the publication of new rules. Student loans have been a special focus of attention for the CFPB, and it would suprise us in the least if Director Cordray used this forum to make a "major announcement" regarding student loans. Stay tuned to the CFPB-Lawblog, as we follow this developing story.