It is a little known fact that a forgiven student loan is usually treated as income for tax purposes. While some types of student loan cancellations (e.g. Public Service Loan Forgiveness, closed-school, etc.) are exempt from taxation, forgiveness of the debt due to disability and death is not exempt. There are limited exceptions to taxation […]

Since the election of Donald Trump for President, we have heard from many people asking us, “what does this mean for student loan borrowers.” The honest answer is that we do not yet know. We have very little actual information about what the next administration plans, and it is still too early to speculate.  The […]

The Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman released a report today estimating that over a third of borrowers who rehabilitate their loans will re-default within the first two years. It further highlighted industry estimates that re-default rates could be as high as 75% over the entire life of the loans. This confirms one […]

This week, the National Consumer Law Center updated its policy brief highlighting the need to end the seizure of Earned Income Tax Credits (“EITC”) from defaulted federal student loan borrowers. As we have said in previous blog posts (here and here), seizing EITC payments is a counterproductive policy.  The EITC is extremely important to working […]

Last week, the Consumer Financial Protection Bureau’s (“CFPB”) Student Loan Ombudsman released its midyear report analyzing complaints submitted directly by consumers about their student loans. Importantly, the CFPB’s Student Loan Ombudsman announced that it is now officially accepting complaints about federal student loans. Although it has actually been accepting federal student loan complaints for a […]

Yesterday, NCLC and 39 others sent a letter to Secretary John King demanding that the Department of Education look at its loan data to determine the impact that student loan defaults have on student loan borrowers of color. In our letter, we asked the Department to collect and release the data necessary to ensure that […]

Last week was full of announcements about student loans. The U.S. Department of Education (ED), along with the Consumer Financial Protection Bureau and the U.S. Department of Treasury, announced last week that it plans to take steps to improve consumer protections and enhance the student loan borrower experience. ED’s announcement focused on four areas: helping […]