The Department of Justice announced earlier this week that it has entered into a consent order with the New Jersey Higher Education Student Assistance Authority (HESAA) to settle the DOJ’s claim that HESAA violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against two military servicemembers for amounts owed on student loans. … Continue Reading

With Colorado’s private education lender registration scheduled to take effect on September 1st, the Colorado Department of Law has just announced that they intend to bring a new group within their jurisdiction: private postsecondary schools that use income share agreements (ISAs) to help finance students’ education.  Schools regulated by the Division of Private Occupational Schools received notice of this interpretation on Friday.… Continue Reading

The U.S. Department of Education has issued a new interpretation “to revise and clarify its position on the legality of State laws and regulations that govern various aspects of the servicing of Federal student loans.”  The new interpretation revokes and supersedes the ED’s 2018 preemption determination.  It was not unexpected, as the ED has taken a number of steps in recent months to reverse Trump Administration policies that hindered state oversight of federal student loan servicers. … Continue Reading

We look at the practices found to be unlawful by CFPB examiners.  In addition to “as low as” rate advertising by providers of private student loans that did not disclose rates were dependent on borrower creditworthiness, we discuss servicer practices involving: providing inaccurate information about eligibility for the Public Service Loan Forgiveness program, automatic placement in a natural disaster forbearance, failing to waive or refund overcharges imposed after servicing transfers of loans owed by borrowers enrolled in income-based repayment plans, and failing to honor borrowers’ standing instructions on payment allocation.… Continue Reading

Pursuant to the authority set forth in Section 205 of Senate Bill 1202, Connecticut’s Banking Commissioner signed an order that permits individuals engaged in certain licensable activity on behalf of certain consumer credit licensees to work from remote office locations not licensed as branch office locations.  The order, available here, extends the previous no-action position of the Commissioner and is effective July 1, 2021.… Continue Reading

The bill signed into law by President Biden on June 17, 2021 to create the Juneteenth National Independence Day results in an important change under the Truth in Lending Act (TILA) and Regulation Z.

Under TILA and Regulation Z, there are two definitions of “business day.”  One definition is “a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.” … Continue Reading

After reviewing the existing types of federal student loans and forgiveness programs, we discuss the current political debate over forgiveness, including the Education Dept.’s upcoming analysis of the President’s forgiveness authority and other analyses of such authority, potential legal sources of such authority, and how courts might respond to challenges to any Presidential action to forgive federal student loans.… Continue Reading

The Department of Education has announced that it has selected former CFPB Director Richard Cordray as the Chief Operating Officer of Federal Student Aid.  In addition to having served as CFPB Director, Mr. Cordray formerly served as Ohio Attorney General.

Rohit Chopra, President Biden’s nominee for CFPB Director, previously served as the CFPB’s Private Education Loan Ombudsman under Mr.… Continue Reading

The California Department of Financial Protection and Innovation announced last week that it has entered into a consent order with Lambda, Inc., which does business as Lambda School, to settle the DFPI’s claims that a provision in Lambda’s student financing contracts was misleading.  The consent order also resolves the DFPI’s claim that Lambda’s marketing materials were misleading. … Continue Reading

The Pennsylvania Attorney General recently entered into an Assurance of Voluntary Compliance with Elevation Capital Partners, LLC, a buyer of private student loans, that prohibits Elevation from engaging in any collection efforts, directly or through servicers, related to loans made to Pennsylvania borrowers who attended schools operated by Education Corporation of America (ECA) (ECA Loans). … Continue Reading