Student Loan Debt Crisis is in Worse Shape Than Thought

There’s an old saying that figures don’t lie, but liars figure. In this case, the Department of Education was the liar and the figure was a 99.8 percent mistake in the repayment rates for all colleges and post secondary trade schools in the country. In other words, they were completely wrong – but were just two points short of it. This means that the student loan debt crisis is far worse than previously thought, more extensive that estimated, and that at a quarter of the total schools serviced by the federal student loan program half of the students had defaulted on their debt. This means that half of the students at 1000 colleges and trade schools have either defaulted or failed to pay down their debt by one dollar within seven years.

Said and Unsaid About Student Loan Debt

Of course, what remains unsaid is the number of the schools that are either fraudulent schools, closed schools, or schools that have lost their access to students taking federal student aid. Tied up in those unspoken numbers could be any number of students who have a borrower defense to repayment for having been induced by fraud to enroll in the schools. A number of schools have failed to meet the basic requirements for continuing to receive students taking federal student loans and student aid, and may have actively misled prospective students into taking on a level of that that they would not be able to handle after leaving school.

Cautionary Tale

For instance, the Charlotte School of Law recently was notified by the Department of Education that it will and federal assistance to the student body. This went into effect on December 31, and the first lawsuits against the school were filed by the end of January. The Charlotte School of Law had previously been on probation for misleading students as to its standing, and the likelihood that graduates of the school could pass the bar exam. Some students were even paid a stipend to defer taking the bar exam, and thus boost the schools number of students who did pass the bar. Negotiations with the Department of Education that would have restored a small amount of access to federal money fell through, and the school laid off a large number of staff and faculty. Though the school has committed to remain open through May, and has readied a teacher plan with another school, enrollment continues to decline.

If You Need Advice

It’s hard to admit that you were taken advantage of. Getting a college education is tied up with so many hopes and dreams for the future, and to lose those dreams is a very difficult thing. However, you do have to think of your finances and your future. Filing for borrower defense to repayment is just one step to cutting yourself loose from the debts that you would not have willingly assumed if you had known the circumstances. Our West Palm Beach and Fort Lauderdale offices are open six days a week, and your initial consultation is free. Come in and get the help you deserve.