Articles Posted in Student loans

DeVry University just agreed last week to a $100 million settlement as reported by the FTC.  We are seeing more of our Florida student loan clients start to question their education at DeVry and starting to understand why they haven’t been able to find employment that they were led to believe was likely upon graduation.

This settlement includes $50 million in debt relief—they’ve agreed to forgive all private unpaid student loans that DeVry issued to undergraduates between Sept. 2008 and Sept. 2015 ($30 million) and forgive an additional $20 million in past student debts for tuition, books and lab fees.

DeVry will pay $49 million to qualifying students who were harmed by DeVry’s deceptive ads.  That raises the question: exactly who are these “qualifying students”?  The FTC notice simply says that the $49 million will provide a partial refund to students who paid for DeVry classes.  So if you are a former student of DeVry you may start receiving correspondence relating to these partial refunds.

We’ve been getting very interested lately in how schools, particularly for-profit schools, are representing the cost of education at their institutions.  At ITT for instance, we’re learning that students were for the most part simply left in the dark about what their education would cost.  By the time they learned the true cost, it was too late and they were already committed.  They were also told that any shortfall in tuition that was not covered by federal financial aid would be covered by “temporary credits”.  Some of our clients are reporting to us that they didn’t know these were actually loans.  Others were aware they were loans but were told they were 0% loans.  Then nine months later, ITT demanded payment in full of the amount representing the “temporary credits”.  When most student couldn’t pay all at once (95% or more most likely) they were provided with a private loan at 13-16% with a 10% origination fee.  That’s 23-26% interest folks!!  None of this was fully explained up front.  This will be the basis for one of our claims in our Defense to Repayment cases.

Also this week the CFPB enforced an order whereby institutional student loans held by a western school were discharged and refunds ordered when a college misrepresented the low payment plans.  Apparently they promised $25 payment plans or something to that effect.  I haven’t had time to find and review the allegations behind the Order.

Today in the ABA Journal, I read that the University of Tulsa College of Law is reducing its tuition by 35%.  They state that the reduction is to be “really transparent about the cost of legal education.”  Interesting.  Transparency.  Were they less than transparent last year?  Now I haven’t been following the University of Tulsa since my law practice is in Florida, either they are ahead of the curve and we can expect more of the same from other schools who want to avoid scrutiny or perhaps they are already under scrutiny.

Ok, I have a bone to pick with Great Lakes.  I formerly considered them one of the better student loan servicers out there.  Not any more.  On their website they offer free help and tell people not to pay a fee for student loan help that is free.  It’s spelled out in a big bright banner.  Well that sounds great, if they’d actually help.

Case in point.  A couple in their early 60s came to see me last week.  They were paying $1,400 for Parent Plus loans the wife took out to help her daughter who has been unable to find a job.  They can barely afford the $1,400 and won’t be able to afford it much longer.  The wife helps out in the husband’s business and does not earn a paycheck.  The husband draws Social Security and owns a small business.  They didn’t know how much they owed, so they called Great Lakes while in my office and found out it was $72,000.  But despite being able to easily reach their student loan servicer, they were not given any advice as to how to lower their payments.  NADA, ZILCH.

I knew immediately exactly how to help them lower their payment to zero.  It took me 15 minutes of listening and asking questions.  I told them how I can drop their payment in 1-2 months.  And we can even get a forbearance for the two months if needed.  For this particular case, we will consolidate their Parent Plus loans to Direct Loans and apply for the Income Contingent Repayment (ICR) plan right AFTER they file their tax return in Oct (they had obtained an extension already) as married filing separately.  And presto, zero payment.  That’s right ZERO.  Did Great Lakes tell them any of this?  NO.