When we released our “Finding a Way Out” report five years ago, we were extremely concerned about the lack of reliable and affordable resources for financially distressed student loan borrowers.  Unfortunately, the situation has not improved despite the increased numbers of borrowers in trouble. To compound the problem, the for-profit “student assistance” industry keeps getting bigger […]

For a number of years, we have been writing about the problems facing borrowers trying to consolidate their loans out of default and into Income Based Repayment (IBR).  The Department of Education was placing borrowers in ICR even if they selected IBR as their preferred payment plan. In May, the Department said that the problem […]

We wrote a few weeks ago about the September 8 New York Times article, “Debt Collectors Cashing in on Student Loans.”  The article explains how student loan servicers and collectors lack incentives to prevent student loan defaults.  Among other reasons, companies are not paid enough to talk borrowers through the federal student loan payment options […]

The Department of Education released new student loan default rate information in September and it’s not pretty!  The overall two year cohort default rate increased to 9.1% (FY 2012 data).  This official two year rate requires the Department to track borrowers for a very short two year period and doesn’t even count borrowers in forbearance […]

A recent New York Times article about student loan debt collectors raises a number of important issues that we will be writing about in a series of blogs. The article explains how student loan servicers and collectors lack incentives to prevent student loan defaults.  Among other reasons, companies are not paid enough to talk borrowers […]

The Senate Health, Education, Labor and Pensions Committee’s July 2012 report on for-profit higher education contains a wealth of important and shocking information about the for-profit education industry.  Among other themes, the report focuses on the disproportionate default rates in this sector and the harm this causes to students and society.  Among for-profit students who […]

 The Student Loan Default Trap: Why Borrowers Default and What Can Be Done,  a new report released on Monday from the National Consumer Law Center’s Student Loan Borrower Assistance Project, addresses questions about the causes of default and the effectiveness of programs intended to assist borrowers in default. Highlights include: A summary of existing research […]

We have written a number of posts about ongoing operational problems at the Department of Education.  We received some encouraging news this week that some of these problems may be fixed, including: 1.  We wrote earlier about problems with borrowers seeking to consolidate out of default.  The Department was placing borrowers in ICR even if they […]

Thanks to all of you who have responded to the story about my client Mr. A.  Many of you have asked why Mr. A has not tried rehabilitation or consolidation to get out of default.  We have discussed these options with Mr. A many times.  They are useful for many borrowers, but there are drawbacks.  […]

This is dedicated to my client Mr. A in hopes that he will keep his dignity and not lose hope. Some basic facts about Mr. A:  He is 83 years old and a veteran of the Korean War.  His sole source of income is Social Security.  He has an unfortunate array of medical problems, both […]