CFPB, Federal Agencies, State Agencies, and Attorneys General
In conjunction with efforts to forgive federal student debt for certain borrowers, President Biden’s Justice Department recently announced new guidance for its attorneys to use when deciding whether to recommend that a bankruptcy judge discharge an individual’s federal student loans.
The guidance seeks to streamline the process of discharging federal student debt which, unlike other consumer debt, is not automatically discharged through bankruptcy. … Continue Reading
Student loan servicing was the focus of recent CFPB attention in the form of a blog post, “Busting myths about bankruptcy and private student loans,” and a report (labeled a “special issue brief”) titled “Student Loan Borrowers Potentially At-Risk when Payment Suspension Ends.” Both items raise areas of compliance risk for student loan servicers.… Continue Reading
Taking a step that undoubtedly presages further coordinated action, state officials holding the title of Student Loan Ombudsman or comparable titles sent a joint letter to Department of Education Secretary Betsy DeVos and Social Security Commissioner Andrew Saul urging the ED and SSA to establish an automatic process for discharging federal student loans of disabled civilian borrowers.… Continue Reading
A group of 22 state Attorneys General have sent a letter to the Department of Education seeking information “to determine whether the [ED] is providing relief to thousands of former ITT Tech students as required by federal law.” The use of the seals of the Kentucky, Massachusetts, and Oregon AGs on the first page of the letter suggests that these AGs are taking the lead on the inquiry.… Continue Reading
As we reported, the Department of Education announced earlier this month that it would begin implementing its “borrower defense” final rule which was issued in November 2016 by providing discharges of federal student loans made to any borrowers who, in addition to other conditions, could not complete his or her program of study because the borrower’s school closed. … Continue Reading
In a December 13 posting, the Department of Education announced that on December 14, it would begin sending emails to borrowers “to inform them that the company that handles billing and other services related to their federal student loans will discharge some or all of the borrower’s loans within the next 30-90 days.”… Continue Reading
The Department of Education has published a request for information in today’s Federal Register seeking comment on the factors used to evaluate claims of undue hardship made by student loan borrowers attempting to discharge student loans through adversary proceedings in bankruptcy court. Responses to the RFI must be received by May 22, 2018.… Continue Reading
In a new blog post, the CFPB provides credit reporting advice to service-disabled veterans who take advantage of federal student loan forgiveness available from the Department of Education for veterans who receive a 100 percent disability rating from the Department of Veterans Affairs. The CFPB encourages veterans who use this benefit to confirm that their student loan servicer is providing correct information about their loan discharge to credit bureaus. … Continue Reading
