Source: https://library.nclc.org/sl/011101
Timestamp: 2020-01-20 20:53:12
Document Index: 448936317

Matched Legal Cases: ['arty\n14', '§ 1087', '§ 1087', '§ 1077', '§ 1078', '§ 1078', '§ 1078', '§ 1080', '§ 1083', '§ 1087', '§ 1087', '§ 1087', '§ 1087', '§ 1087', '§ 1091', '§ 1091', '§ 1091', '§ 1094', '§ 1095', '§ 3716', '§ 3720', '§ 3720', '§ 1638', '§ 1650', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 682', '§ 674', '§ 674', '§ 674', '§ 674', '§ 674', '§ 674', '§ 674', '§ 674', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 600', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 668', '§ 30', '§ 30', 'art?\n34', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 30', '§ 34', 'art.\n34', '§ 34', 'art.\n34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 34', '§ 30', '§ 30', '§ 30', '§ 285', '§ 901', '§ 1026', '§ 1026', '§ 1026']

1.11.1 First Steps | NCLC Digital Library
1.11.1 First Steps
1.2 Using This Treatise
1.2.1 Print and Digital Versions
1.2.2 Road Map
1.2.3 Unreported Cases
1.2.4 Pleadings and Primary Sources
1.3 Brief History of Federal Student Loans
1.4 Types of Federal Student Assistance
1.4.1 Student Loans
1.4.1.1 Stafford Loans
1.4.1.2 PLUS Loans
1.4.1.3 Consolidation Loans
1.4.1.3.1 General
1.4.1.3.2 Limits on reconsolidation
1.4.1.3.3 Pros and cons of consolidation
1.4.1.3.4 Joint consolidation loans
1.4.1.4 Perkins Loans
1.4.1.5 Older Loans
1.4.2 Federal Grants
1.4.2.1 General
1.4.2.2 Pell Grants
1.4.2.2.1 Basics about Pell Grants
1.4.2.2.2 Pell Grant overpayments
1.4.2.3 TEACH and Other Grants
1.4.3 Seizure of Student Loan Funds Generally Prohibited
1.4.4 Educational Benefits for Military Servicemembers
1.4.4.1 The Post-9/11 GI Bill
1.4.4.2 Other Protections and Programs for Servicemembers
1.5 Financial Need; Applying for Federal Student Loans
1.5.2 Dependent and Independent Students
1.6 Individual Eligibility for Federal Student Loans
1.6.1 Academic Requirements
1.6.2 Satisfactory Academic Progress
1.6.3 Citizenship and Immigration Status Requirements
1.6.4 Drug Convictions
1.6.5 Incarcerated Students
1.6.6 Prior Student Aid History
1.7 Institutional Eligibility
1.7.1 Eligibility Criteria
1.7.1.1 Introduction
1.7.1.2 Different Types of Schools
1.7.1.3 Program Requirements
1.7.1.4 Distance Education
1.7.1.5 Admissions Standards
1.7.2 Consumer Information Requirements
1.8 Private Student Loans
1.9 Determining What Type of Loan a Client Has
1.10 Student Loan and Tax Deductions
1.11 Checklist for Handling Student Loan Issues
1.11.2 Loan Cancellation
1.11.3 Repayment Options
1.11.4 Getting Out of Default Through Repayment
1.11.5 Postponing Payment
1.11.6 Challenging Collection
1.12 Assistance for Student Loan Borrowers
1.12.1 Ombudsman Programs
1.12.1.1 Federal Student Loan Ombudsman
1.12.1.2 Other Ombudsman Programs for Federal Student Loans
1.12.1.3 CFPB Student Loan Ombudsman
1.12.2 Additional Department of Education Resources
1.12.3 NCLC’s Student Loan Borrower Assistance Project
1.12.4 Potential Problems with For-Profit Counselors
Chapter 2 Taking Out a Federal Student Loan: Basic Terms and Conditions
2.2 Loan Limits
2.2.2 Stafford Loan Limits
2.2.3 PLUS Loan Limits
2.2.4 Perkins Loan Limits
2.2.5 Professional Judgment and Additional Limits on Borrowing
2.3 Federal Student Loan Interest Rates
2.3.2 Capitalization of Interest
2.3.3 Stafford Loan Interest Rates
2.3.4 PLUS and Perkins Interest Rates
2.3.5 Consolidation Interest Rates
2.4 Loan Fees
2.4.1 Origination Fees
2.4.2 Late Charges and Other Fees
2.5 Disclosures
2.5.2 Federal Loan Disclosures
2.5.3 Consolidation Loan Disclosures
2.6 Disbursement of Federal Student Loans
2.7 Cancellations and Refunds
2.8 Master Promissory Notes
2.9 Counseling Requirements
Chapter 3 Pre-Default Repayment Options
3.2 Standard, Graduated, and Extended Repayment Plans
3.3 Income-Driven Repayment Plans
3.3.2 History of Income-Driven Repayment Plans
3.3.3 Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE)
3.3.3.1 Introduction
3.3.3.2 Eligibility for IBR, PAYE, and REPAYE
3.3.3.3 Calculating the IBR, PAYE, or REPAYE Repayment Amount
3.3.3.3.1 General
3.3.3.3.2 Calculating payment for married borrowers
3.3.3.4 Application of Payments, Overpayment Concerns, and Treatment of Interest
3.3.3.5 Applying for IBR, PAYE, or REPAYE
3.3.3.5.1 General
3.3.3.5.2 Certifying household income and size
3.3.3.5.3 Switching between income-driven repayment plans
3.3.3.6 Annual Review of Financial Circumstances
3.3.3.6.1 Annual review process and deadlines
3.3.3.6.2 Consequences of late or missed income documentation under IBR/PAYE
3.3.3.6.3 Consequences of late or missed income documentation under REPAYE
3.3.3.7 Leaving IBR/PAYE/REPAYE
3.3.3.8 IBR/PAYE/REPAYE Forgiveness
3.3.3.9 Considerations for Borrowers Eligible for Multiple Income-Driven Plans
3.3.4 Income-Contingent Repayment (ICR) Plans
3.3.4.1 ICR Eligibility
3.3.4.2 Calculating the Monthly Payment Under ICR
3.3.4.3 ICR Forgiveness
3.3.5 Income-Sensitive Repayment (ISR) Plans
3.3.6 Alternative Repayment Plans
3.4 Perkins Loan Repayment
3.5 How Payments Are Applied
Chapter 4 Postponing Repayment on Federal Student Loans
4.2 Grace Periods
4.3 Deferments
4.3.1 Benefits of Deferment
4.3.2 Borrower’s Default Limits Eligibility for Deferment
4.3.3 General Eligibility Requirements for Deferments
4.3.4 Applying for Deferments
4.3.5 Deferments for Direct Loans, FFEL Program Loans, and Consolidation Loans Extended After July 1, 1993
4.3.5.1 General
4.3.5.2 FFEL and Direct Loan Economic Hardship Deferments
4.3.5.3 Unemployment Deferment
4.3.5.4 Military Deferment
4.3.5.5 Post-Active-Duty Deferment
4.3.6 PLUS Loan Deferments
4.3.7 Grounds for FFEL Deferments Extended Before July 1, 1993
4.3.8 Grounds for Perkins Loan Deferments
4.3.9 Ending Deferments
4.4 Forbearances
4.4.2 Applying for Forbearances
4.4.3 Forbearances Post-270 Days Delinquent and Prior to Default Claim or Collection Status
4.4.4 Discretionary and Administrative Forbearances
4.4.5 Mandatory Forbearances
4.4.6 Perkins Loan Program Provisions
Chapter 5 Pre-Default Servicing of Federal Student Loans
5.1 Introduction to Federal Student Loan Servicing
5.2 Structure of Federal Student Loan Servicing
5.2.1 Direct Loans
5.2.1.1 Contract System
5.2.1.2 Direct Loan Performance Metrics
5.2.2 FFEL Servicing
5.2.3 Perkins Loans
5.3 Common Servicing Problems
5.4 Servicer Due Diligence Requirements
5.4.1 FFEL Program and Direct Loan Program
5.4.2 Perkins Loan Program Due Diligence Provisions
5.5 Borrower Protections
5.5.2 Higher Education Act Loan Servicing Requirements
5.5.3 State Servicing Laws
5.6 Public Oversight of Servicers
5.6.2 Public Enforcement
5.6.3 Complaint Procedures
Chapter 6 Implications of Student Loan Defaults
6.2 Defining Default
6.2.1 Federal Student Loan Default
6.2.2 Private Loan Default
6.3 Consequences of Default
6.3.1 Consequences of Default on Federal Loans
6.3.2 Consequences of Default on Private Loans
6.4 Measuring Default Rates
6.4.1 Cohort Default Rates
6.4.2 Problems with the Cohort Default Rate Measure
6.4.3 Other Federal Default Measures
6.5 The Scope of the Student Loan Default Problem
6.5.2 Default Risk Factors and Racial Disparities
Chapter 7 Repayment Strategies for Getting Out of Federal Student Loan Default
7.2 Consolidation As a Way Out of Default
7.2.2 Eligibility for Consolidation
7.2.3 Risks of Consolidating Certain Eligible Loans
7.2.4 Applying for Direct Loan Consolidation
7.2.4.2 Choosing a Servicer
7.2.4.3 Payments Are Not Required to Get Out of Default Through Consolidation
7.2.4.4 Repayment Plan Selection for Consolidation
7.2.4.5 Completing the Consolidation Process
7.2.4.6 Potential Problems Applying for Consolidation
7.2.5 Costs Associated with Consolidation
7.3 Loan Rehabilitation
7.3.2 Eligibility for Rehabilitation
7.3.3 Process for Requesting and Completing FFEL and Direct Loan Rehabilitation
7.3.3.2 Determining the Reasonable and Affordable Payment Amount
7.3.3.2.1 Payment amount must be based on borrower’s financial circumstances
7.3.3.2.2 Initial payment determination using AGI and 15% of discretionary income
7.3.3.2.3 Alternative payment amount based on income and expenses
7.3.3.3 Written Rehabilitation Statement Required
7.3.3.4 Requirement That Rehabilitation Payments Be Voluntary
7.3.3.5 Rehabilitation Payment Timing Requirements
7.3.3.6 Completing the Rehabilitation and Credit Report Impact
7.3.4 Costs Associated with Rehabilitation
7.3.5 Perkins Rehabilitation
7.4 Advantages and Disadvantages of Loan Rehabilitation and Consolidation
7.5 Renewing Eligibility for Federal Student Aid
7.6 Compromise and Write-Off Authority
7.6.2 Compromises with the Department of Education
7.6.3 Compromises with Guaranty Agencies
7.6.4 Guaranty Agency Write-Off Procedures
Chapter 8 Federal Student Loan Collection: The Federal Collection System, Private Collection Agencies, and Defenses to Collection Actions
8.1 Introduction to Federal Student Loan Collections
8.2 The Federal Student Loan Collection Process
8.2.1 The Various Collection Entities: Figuring Out Who Is Collecting the Loan
8.2.2 Post-Default Collection
8.2.3 Credit Bureau Reporting
8.2.3.1 General
8.2.3.2 How Long Does Information Remain in the Consumer’s File?
8.2.3.3 Cleaning Up the Consumer’s Credit Record
8.3 Collection Fees and Penalties
8.3.2 Amount of Collection Fees and How Fees Are Calculated
8.3.2.1 “Reasonable” Collection Fees
8.3.2.2 Fees for Rehabilitation and Consolidation
8.3.2.3 Perkins Loan Collection Fees
8.3.3 Avoiding Collection Fees
8.3.4 United States Collection of Other Fees and Penalties
8.4 Deceptive and Abusive Debt Collection Tactics and Legal Violations
8.4.1 Factors That Foster Deception and Abuse in Student Loan Collections
8.4.1.1 General
8.4.1.2 Commission Structure Fosters Abuses
8.4.2 Submitting Complaints About Collection Agencies
8.5 Defenses to Federal Student Loan Collection Actions
8.5.2 Standing and Other Procedural Issues
8.5.3 Statute of Limitations Is Not a Defense to Federal Student Loan Collection Action
8.5.3.1 Statute of Limitations Generally Eliminated
8.5.3.2 Exclusions from the General Rule Eliminating the Statute of Limitations
8.5.3.3 Laches
8.5.3.3.1 Barriers to applying the laches doctrine in student loan cases
8.5.3.3.2 Exceptions to the rule barring laches
8.5.3.3.3 FISL collection
8.5.4 Other Defenses to Loan Enforceability
8.5.4.1 Forgery, Mistake, Infancy, and Other Contract Defenses
8.5.4.2 Connection Between Contract Defenses and Statutory Discharges
8.5.4.3 Raising Defenses When FFEL Program Loans Have Lost Their Guaranteed Status
8.5.4.4 Raising Defenses After a Loan Has Been Consolidated
8.5.4.5 Defenses for Servicemembers
8.6 Vacating Collection Judgments
Chapter 9 Seizures of Income and Assets to Collect Federal Student Loans
9.2 Tax Refund Offsets
9.2.2 Notice Requirements
9.2.3 Grounds to Contest a Tax Offset
9.2.4 Repayment Plan in Lieu of Offset
9.2.5 The Review Process
9.2.6 Post-Offset Challenges
9.2.7 Preventing Tax Offsets
9.2.8 Bankruptcy and Tax Offsets
9.2.9 Rights of Non-Obligated Spouses
9.3 Non-Judicial Wage Garnishment
9.3.2 DCIA Garnishment by the Department of Education
9.3.2.1 Allowable Garnishment Amounts
9.3.2.2 Notice of Garnishment
9.3.2.3 Grounds to Contest Garnishment
9.3.2.3.1 Overview of defenses and objections
9.3.2.3.2 Unemployment
9.3.2.3.3 Statutory discharges and borrower defenses
9.3.2.3.4 Financial hardship
9.3.2.3.5 Special rules for active servicemembers and merchant seamen
9.3.2.3.6 The role of the debtor’s employer
9.3.2.4 Repayment in Lieu of Garnishment
9.3.2.4.1 Repayment agreements
9.3.2.4.2 Rehabilitation or consolidation as an option
9.3.2.5 The Review Process
9.3.3 Guaranty Agency Wage Garnishment Program
9.3.3.1 General
9.3.3.2 Guaranty Agency Garnishment Hearing
9.3.4 Participation of Private Collection Agencies in Garnishment
9.4 Seizure of Federal Benefits
9.4.2 Amount of Offset
9.4.3 Challenges to Offset
9.4.3.1 Notice and Hearing Rights
9.4.3.2 Hardship Reductions
9.4.3.3 No Time Limit on Administrative Offsets
9.5 Federal Salary Offsets
9.6 Professional License Suspensions and Revocations
9.7 Seizure of Student Loan Funds Generally Prohibited
9.8 Withholding Transcripts
Chapter 10 Statutory Discharges of Federal Student Loans
10.2 Loans Eligible for Discharge
10.3 Closed-School Discharge
10.3.2 The Official School Closure Date
10.3.3 Withdrawals and Leaves of Absence Prior to Closure
10.3.3.1 Withdrawals Prior to Closure Generally
10.3.3.2 Examples of Extended Withdrawal Periods
10.3.3.3 Leaves of Absence
10.3.4 Teach-Outs and Credit Transfers
10.3.5 Relief for Those Obtaining a Closed-School Discharge
10.3.6 How to Obtain a Closed-School Discharge
10.3.6.1 Student Notification and Forbearance Requirements
10.3.6.2 Written Application for Discharge
10.3.6.3 Discharges Without a Written Application and Group Discharges
10.3.6.4 Time Limits and Appeal Rights
10.3.7 Effect of School Closure on FISLs and Older FFEL Program Loans
10.4 False-Certification Discharge
10.4.2 Discharge Based on Ability-to-Benefit (ATB) or High School Diploma Falsification
10.4.2.1 ATB Falsification Defined: Students Who First Enrolled Before July 1, 2012
10.4.2.2 Common ATB Test Violations
10.4.2.3 ATB Tests and Language Issues
10.4.2.4 ATB False-Certification: Students Who First Enrolled After July 1, 2012
10.4.2.5 The Use of Fake High School Diplomas and False Self-Certifications of High School Graduation
10.4.2.6 Using Independent Evidence to Prove ATB or High School Diploma Falsification
10.4.2.6.1 Why supporting evidence is important
10.4.2.6.2 Challenging Department denials based on lack of corroborating evidence
10.4.2.6.3 Cohort default rates in lieu of corroborating evidence
10.4.2.6.4 Obtaining evidence through Freedom of Information Act requests
10.4.2.6.5 School files
10.4.2.6.6 Testing company information
10.4.2.6.7 Information on specific schools
10.4.2.6.8 Other evidence of ATB fraud or high school diploma falsification
10.4.2.6.9 Evidence to support borrower credibility
10.4.2.7 Group Discharges
10.4.2.8 Discharges Without Applications
10.4.3 Discharge Based on Student’s Inability to Meet Minimum State Job Requirements (Disqualifying Status)
10.4.4 Discharge Based on Forgery by School
10.4.5 Discharge Based on Identity Theft or Forgeries by Third Parties
10.4.6 Relief Available for Those Obtaining a False-Certification Discharge
10.4.7 How to Apply for a False-Certification Discharge
10.5 Unpaid-Refund Discharge
10.5.2 Criteria for Unpaid-Refund Discharge
10.5.3 Determining Amount of Discharge
10.5.4 Applying for the Discharge
10.5.5 Relief Available for Those Obtaining an Unpaid-Refund Discharge
10.6 Borrower Defense Discharge and Related Defenses to Federal Student Loan Collection
10.6.2 Direct Loan Borrower Defense Discharges
10.6.2.1 Background
10.6.2.2 Eligible Loans
10.6.2.3 Standard for Relief
10.6.2.4 Relief and Time Limits
10.6.2.5 How to Obtain A Borrower Defense Discharge
10.6.2.5.1 Individual application process
10.6.2.5.2 Process for certain Corinthian borrowers
10.6.2.5.3 Other schools subject to special borrower defense processes
10.6.2.5.4 Group discharges without application
10.6.3 Using the Direct Loan Borrower Defense Process for Consolidation, FFEL, and Perkins Loans
10.6.4 Asserting School-Related Claims and Defenses Against Repayment for Other Types of Student Loans
10.6.4.1 Generally
10.6.4.2 Perkins Loans
10.6.4.3 FFEL Program Loans Originated On or After January 1, 1994
10.6.4.3.1 General
10.6.4.3.2 Legal bases and standard for FFEL borrower defenses on FFEL Program loans disbursed since 1994
10.6.4.3.3 Additional considerations for FFEL Program loans originated between Oct. 1, 2003, and July 1, 2009
10.6.4.4 FFEL Program Loans Originated Before 1994
10.6.4.4.1 General
10.6.4.4.2 Origination relationship
10.6.4.4.3 Private remedy for failure to include FTC Holder Notice
10.6.4.4.4 State lender liability statutes
10.6.4.4.5 Agency and other common law theories
10.6.4.5 Federally Insured Student Loans (Older Loan Type)
10.7 Relationship Between Closed-School, False-Certification, Unpaid-Refund, Borrower Defense, and Disability Discharges
10.8 Disability Discharge
10.8.1 General
10.8.2 Significant Changes to the Disability Discharge Process Over the Years
10.8.3 Eligible Loans
10.8.4 Definition of Total and Permanent Disability
10.8.5 Applying for Disability Discharge
10.8.5.1 General
10.8.5.2 Applying Based on Physician Certification
10.8.5.3 Applying Based on SSA Determination
10.8.5.4 Applying Based on VA Service-Connected Disability
10.8.6 Effect of Discharge
10.8.7 Reinstatement Period
10.8.7.1 General
10.8.7.2 Earnings Cap During Reinstatement Period
10.8.7.3 Bar on New Student Loans During Reinstatement Period
10.8.7.4 Changes in SSA Disability Status
10.8.7.5 Reinstatement of Obligation to Pay Discharged Loans
10.8.8 When Work Is Allowed
10.8.9 Challenging Denials
10.9 Discharge Based on Death
10.10 Public Service Loan Forgiveness
10.10.1 General
10.10.2 Eligible Loans
10.10.3 Qualifying Repayment Plans and Payments
10.10.4 Qualifying Jobs
10.10.5 Applying for Public Service Cancellation
10.11 Teacher Loan Forgiveness
10.12 Other Profession-Related Cancellations
10.13 Perkins Loan Discharges
10.14 Cancellation for Certain Relatives of September 11 Victims
10.15 Tax Implications of Student Loan Discharges
10.15.2 Public Service Loan Forgiveness and Other Profession-Related Loan Forgiveness Not Taxable
10.15.3 Death and Disability Discharges Not Taxable As of January 1, 2018
10.15.4 Closed-School, False-Certification, and Unpaid-Refund Discharges Excluded from Income Under HEA
10.15.5 Tax Implications of Borrower Defense Discharge
10.15.6 Insolvency and Bankruptcy Exceptions to Taxable Income
10.15.7 Disputed Debt Doctrine As Exception to Taxable Income
10.16 Appealing Adverse Discharge Decisions
10.16.1 Seeking Administrative Review or Reconsideration
10.16.2 Appealing to Federal District Court
Chapter 11 Discharging Student Loans in Bankruptcy
11.1 Student Loans and Bankruptcy
11.1.1 About the Bankruptcy Option
11.1.2 The Automatic Stay and the Discharge Order
11.1.2.1 The Automatic Stay
11.1.2.2 The Discharge Order
11.1.2.3 Tuition Debts Are Dischargeable
11.2 When Can a Student Loan Be Discharged in Bankruptcy?
11.2.1 The Special Restriction on Dischargeability Applies to Most Student Loans
11.2.2 The Time-Limited Exceptions to Discharge for Cases Filed Before 1998
11.2.3 The Scope of the Discharge Exception: Parsing the Language of Section 523(a)(8)
11.2.3.1 Introduction
11.2.3.2 Loans Related to Government Units and Nonprofit Institutions: Section 523(a)(8)(A)(i)
11.2.3.3 Obligations to Repay Funds Received As Educational Benefits, Scholarships, or Stipends: Section 523(a)(8)(A)(ii)
11.2.3.4 Private Student Loans: Section 523(a)(8)(B)
11.2.4 Some Education Debts Should Be Dischargeable
11.2.4.1 Debts Incurred Through Employer-Sponsored Programs
11.2.4.2 Debts That Are Not Loans
11.2.5 Refinanced Student Loans in Bankruptcy
11.2.6 The Role of Programs Guaranteed or Insured by a Nonprofit or Government Entity in Cases Decided Under the Pre-2005 Version of Section 523(a)(8)
11.2.7 Applying the Time-Based Discharge Provisions for Cases Filed Before October 7, 1998
11.3 Burden of Proof and the Student Loan Dischargeability Exception
11.3.2 Parents and Other Co-Signors
11.3.3 Reimbursement Claims by Individuals Are Not Student Loans
11.4 Undue Hardship As Basis for Discharging Student Loan
11.4.1 General
11.4.1.1 Introduction
11.4.1.2 The Brunner Test
11.4.1.3 The “Totality of the Circumstances” Test
11.4.2 Applying the Brunner “Undue Hardship” Test
11.4.2.1 The First Brunner Prong: The Debtor’s Current Income and Expenses
11.4.2.1.1 General
11.4.2.1.2 Can the borrower afford to repay the loan?
11.4.2.1.3 The role of long-term repayment plans
11.4.2.1.4 What is a “minimal” standard of living?
11.4.2.1.5 Whose income and expenses count?
11.4.2.2 The Second Brunner Prong: Additional Circumstances Indicate Current Hardship Likely to Continue
11.4.2.2.1 General
11.4.2.2.2 The relevant time frame is a significant portion of the loan’s repayment term
11.4.2.2.3 Is it more likely than not that the current conditions will persist for the loan’s repayment term?
11.4.2.2.4 Proof of health-related impairments as “additional circumstances”
11.4.2.3 The Third Brunner Prong: Good Faith
11.4.2.3.1 General
11.4.2.3.2 Participation in a long-term income-driven repayment plan should play no significant role in applying section 523(a)(8)
11.4.2.3.3 Emphasis on income-driven plans conflicts with the bankruptcy code
11.4.2.3.4 Long-term income-driven plans often have little benefit for creditors and can be harmful for borrowers
11.4.2.3.5 Tax consequences of loan forgiveness
11.4.2.3.6 Long-term repayment plans are not available for all student loans
11.4.2.3.7 Not all borrowers with eligible loans are permitted to participate in income-driven plans
11.4.2.3.8 Many borrowers who commence long-term repayment plans will never obtain forgiveness
11.4.2.3.9 Responding to creditors’ claims regarding long-term repayment plans
11.4.3 Other Hardship Factors
11.5 Partial Discharge or Modification of Student Loan
11.6 Special Rule for HEAL Loans
11.7 The Dischargeability Determination
11.7.1 Procedure for Determining Dischargeability of Student Loan
11.7.2 Proper Parties and Service
11.7.3 The Timing of the Adversary Proceeding
11.7.4 Undue Hardship Determination in Chapter 13
11.7.4.1 The Timing of the Adversary Proceeding in Chapter 13
11.7.4.2 The Necessity for an Adversary Proceeding in Chapter 13
11.7.5 Use of Older Dischargeability Standards Today When Student’s Pre-1998 Bankruptcy Did Not Determine Student Loan’s Dischargeability
11.7.6 The Department of Education’s Undue Hardship Discharge Guidelines
11.7.7 The Relationship Between the Undue Hardship Discharge and Other Administrative Discharges
11.8 Discharge of Student Loans Owed to State Agencies
11.9 Treatment of Student Loans in Chapter 13 When the Loans Cannot Be Discharged
11.9.1 General
11.9.2 Separate Classification of Similar Claims Is Permitted in Chapter 13 Bankruptcy
11.9.3 Separate Classification of Student Loan Debts in Chapter 13 Bankruptcy
11.9.4 Cure of a Default on a Long-Term Student Loan Debt in Chapter 13 Bankruptcy
11.9.5 Chapter 13 Plans May Provide for Continued Participation in Long-Term Income-Driven Repayment Plans
11.9.6 Preferential Treatment Allowed for Debts with Co-Signors
11.9.7 Graduated Payment Structures for Student Loans in Chapter 13 Plans
11.9.8 Over-Median-Income Debtors May Designate All Their Discretionary Income for Student Loan Payments
11.10 Co-Debtor Stay
11.11 Raising Defenses in Response to Creditor Claims
11.12 Challenging Aspects of the Debt in Bankruptcy in the Absence of a Proof of Claim
11.13 Student Loan Payments As “Special Circumstances” Under the BAPCPA Means Test
11.14 Student’s Rights After Bankruptcy Discharge
11.15 Bankruptcy Default Clauses in Private Student Loan Agreements
Chapter 12 Private Student Loans
12.1 The Private Student Loan Market
12.1.2 State Private Loan Products
12.1.3 School Products
12.1.4 Who Borrows Private Student Loans and Why
12.2 Private Loan Terms and Conditions
12.2.1 Comparing Private Loans and Federal Loans
12.2.2 How to Tell If a Loan Is Federal or Private
12.3 Oversight of Private Student Loans
12.3.1 Federal Agencies
12.3.2 State Agencies
12.4 Disclosures and Private Student Loans
12.4.1 Truth in Lending Disclosures for Closed-End Loans Required As of February 14, 2010
12.4.1.1 Introduction
12.4.1.2 Definitions and Scope
12.4.1.3 Timing of Disclosures
12.4.1.4 Form and Content of Disclosures
12.4.1.4.1 Application disclosures
12.4.1.4.2 Approval disclosures
12.4.1.4.3 Final disclosures
12.4.1.5 Self-Certification
12.4.1.6 Cancellation and Thirty-Day Waiting Period
12.4.1.7 Remedies
12.4.2 Disclosures Required for Closed-End Loans Until February 14, 2010
12.4.3 Disclosures Required for Open-End Loans
12.4.4 HEA Disclosures and Private Loans
12.4.5 State Disclosures and Related Laws
12.5 Fair Billing and Other Servicing Issues
12.5.1 General
12.5.2 Payment Application Issues for Private Student Loans
12.6 Default and Delinquency and Private Student Loans
12.6.1 The Problem of Private Student Loan Defaults
12.6.2 Default Triggers for Private Loans
12.6.3 Collection of Defaulted Private Student Loans
12.7 Relief for Private Student Loan Borrowers
12.7.1 General
12.7.2 Deferments and Forbearances
12.7.3 Modifications and Refinancing
12.7.4 Cancellations
12.7.4.1 Death and Disability Cancellations
12.7.4.2 Relief Based on School Misconduct
12.7.4.2.1 Private loan relief in school bankruptcy cases
12.7.4.2.2 Student tuition recovery funds
12.7.5 CFPB Student Loan Ombudsman
12.8 Defenses in Private Student Loan Collection Actions
12.8.1 General Contract Defenses
12.8.2 Infancy
12.8.3 Statute of Limitations
12.8.3.1 Federal Elimination of Limitations Period Inapplicable
12.8.3.2 Determining Which State’s Law Applies
12.8.3.3 Differing Statutes of Limitation Within a State
12.8.3.4 Computing the Limitations Period
12.8.4 Defenses for Servicemembers
12.8.5 Defenses Against Loan Transferees
12.8.5.1 General
12.8.5.2 Business Entities Barred by State Law from Serving As Plaintiffs
12.8.5.3 Loan Holder’s Proof of Written Contract
12.8.5.4 Loan Holder As Real Party in Interest
12.8.5.5 Admissibility of Loan Holder’s Documents
12.8.5.6 Requirements for Negotiable Instruments
Chapter 13 Predatory and For-Profit School Issues
13.2 Oversight of Schools Participating in Federal Assistance Programs
13.2.2 Federal Eligibility Criteria and Oversight
13.2.2.1 Introduction
13.2.2.2 Program Participation Agreements
13.2.2.2.1 General
13.2.2.2.2 The 90/10 rule and its manipulation
13.2.2.2.3 Limits on incentive compensation
13.2.2.2.4 Misrepresentations
13.2.2.2.5 Private education loan certifications and prohibited inducements
13.2.2.2.6 Predispute arbitration and class waivers
13.2.2.3 Administrative Capability
13.2.2.3.1 General
13.2.2.3.2 Cohort default-rate requirements
13.2.2.4 Financial Responsibility
13.2.2.5 Gainful Employment
13.2.3 State Authorization
13.2.3.1 General
13.2.3.2 Distance Education
13.2.4 Accreditation
13.2.5 Gaps in Federal Enforcement
13.2.6 Federal Student Aid Feedback System
13.2.7 Military and Veteran Benefit and For-Profit School Oversight
13.3 Predatory and For-Profit School Issues
13.3.1 Brief History
13.3.2 Common Abuses and Problems with For-Profit Schools
13.3.2.2 Aggressive Recruiting and Marketing Practices
13.3.2.3 Deceptive Recruiting and Marketing Practices
13.3.2.4 Manipulation of Outcome Measures
13.3.2.5 Falsification of Student Eligibility for Financial Aid
13.3.2.6 Diploma Mills
13.3.2.7 Online and Distance Education
13.3.2.8 Private Loan Borrowing and Internal Loan Products
13.4 Government Discharge and Reimbursement Programs for School Misconduct
13.4.1 Federal Loan Discharges
13.4.2 Student Claims Against State Tuition Recovery Funds
13.4.2.1 General
13.4.2.2 Relationship of STRF to School-Related Discharges
Chapter 14 Affirmative Litigation Involving Student Loans and Schools
14.2 Litigation Involving Collection Abuses
14.2.1 Fair Debt Collection Practices Act Overview
14.2.2 Applicability of the FDCPA to Student Loan Collection Activity
14.2.2.1 General
14.2.2.2 Department of Education Employees
14.2.2.3 Independent Collection Agencies and Attorneys
14.2.2.4 Special Issues Involving Collection of Federal Student Loans
14.2.2.5 Servicers
14.2.2.6 Originating Lenders and Their Assignees
14.2.2.7 FDCPA Applicability to Guaranty Agencies
14.2.3 Student Loan Collection Practices Violating the FDCPA
14.2.3.1 Violations Unique to Federal Student Loans
14.2.3.2 FDCPA Violations Involving Private Student Loans
14.2.3.3 Illegal Debt Collection Activity Not Unique to Student Loans
14.2.4 Applicability of State Debt Collection Law to Student Loans
14.2.4.1 Description of Applicable State Law
14.2.4.2 Preemption of State Debt Collection Claims with Respect to Federal Student Loans
14.2.5 Telephone Consumer Protection Act
14.2.6 Due Process Challenges
14.2.7 Other Federal Claims
14.2.8 Mandatory Arbitration of Debt Collection Claims
14.3 Litigation Involving Servicing Abuses
14.3.1 Servicing Abuses Described
14.3.2 Suing the Department of Education for Injunctive and Other Relief
14.3.3 State Claims Against Servicers
14.3.3.1 Breach of Contract Claims
14.3.3.2 UDAP Claims
14.3.3.3 Other State Claims
14.3.4 HEA Preemption of State Laws Applicable to Servicers
14.3.4.1 Introduction
14.3.4.2 Express Preemption
14.3.4.3 Conflict Preemption
14.3.5 Does Sovereign Immunity Apply to State-Affiliated Servicers?
14.3.6 Federal Claims Against Servicers
14.3.6.1 Enforcing the Higher Education Act
14.3.6.2 Fair Credit Reporting Act Claims
14.3.6.3 Other Federal Claims
14.3.7 Arbitration Requirements
14.4 Litigation Against Schools
14.4.2 Schools As Private Lenders
14.4.3 Developing a Case
14.4.4 Adding Additional Defendants
14.4.4.1 Claims Against Private Accrediting Agencies
14.4.4.2 Claims Against State Licensing Agencies
14.4.4.3 Claims Against the Department of Education
14.4.5 Deciding Between Class and Individual Actions
14.4.6 Arbitration Requirements and Class Waivers
14.4.6.1 Introduction
14.4.6.2 Current Department of Education Rules Limiting Arbitration Requirements and Class Waivers
14.4.6.3 Where Arbitration Agreements Are Not Restricted
14.4.7 Federal Claims
14.4.7.1 The Higher Education Act
14.4.7.2 RICO
14.4.7.3 The False Claims Act
14.4.7.4 The FTC Act and FTC Guides for Private Vocational and Distance Education Schools
14.4.7.5 The Telephone Consumer Protection Act
14.4.8 UDAP Claims
14.4.8.1 General
14.4.8.2 School Practices Violating UDAP Statutes
14.4.8.3 Use of Government Standards to Show UDAP Violations
14.4.9 State Education Laws
14.4.9.1 General
14.4.9.2 State Agency Oversight and Minimum Standards
14.4.9.3 Required Disclosures and Prohibited Practices
14.4.9.4 Cancellation and Refund Rights
14.4.10 Common Law Claims
14.4.10.1 Intentional Torts
14.4.10.2 Contract Claims
14.4.10.3 Fiduciary Duty
14.4.11 State RICO Claims
14.4.12 Federal Preemption of State Claims
14.4.13 Proving Actual Damages
14.4.14 Collecting on a Judgment
14.5 Litigation Involving Private Lenders
14.5.1 Scope of This Section
14.5.2 Raising School-Related Claims and Defenses Against Private Lender
14.5.2.1 Importance of Raising School-Related Claims and Defenses
14.5.2.2 FTC Holder Rule Allows Students to Raise School-Related Claims and Defenses
14.5.2.3 When the Loan Agreement Contradicts the FTC Holder Notice
14.5.2.4 When the Holder Notice Is Omitted from the Credit Agreement
14.5.2.4.1 General
14.5.2.4.2 When the school is the originating lender
14.5.2.4.3 When the school arranges a Direct Loan with a third party
14.5.2.4.4 Lender liability for failure to include FTC Holder Notice
14.5.2.4.5 National Bank Act preemption of students’ state law claims
14.5.2.4.6 Private lender’s liability as aider and abettor of school practices
14.5.3 Federal Claims for Lender’s Law Violations
14.5.3.1 The Truth in Lending Act
14.5.3.2 The Equal Credit Opportunity Act
14.5.3.3 Military Lending Act
14.5.3.4 Anti-Trust Claims
14.5.4 State Claims for Private Lender Violations
14.5.4.1 UDAP Claims
14.5.4.2 Usury and Other State Credit Claims
14.5.4.3 Other State Claims
14.5.5 Loan Cancellation As Taxable Income
14.5.6 Mandatory Arbitration Requirements
14.5.6.1 Introduction
14.5.6.2 Arbitration’s Effect on Classwide Relief
14.5.6.3 Initial Steps to Challenge an Arbitration Agreement
14.5.6.4 Grounds to Challenge an Arbitration Agreement
14.5.7 Raising Claims Against an Assignee of the Originating Lender
14.5.8 Forum Selection Clauses
Appendix A Federal Student Loan Statutes
A.1 Direct Loans
20 U.S.C. § 1087d. Agreements with institutions
(a) Participation agreements
20 U.S.C. § 1087e. Terms and conditions of loans
(b) Interest rate
(c) Loan fee
(d) Repayment plans
(e) Income contingent repayment
(f) Deferment
(g) Federal Direct Consolidation Loans
(h) Borrower defenses
(i) Loan application and promissory note
(j) Loan disbursement
(k) Fiscal control and fund accountability
(l) Armed Forces student loan interest payment program
(m) Repayment plan for public service employees
(n) Identity fraud protection
(o) No accrual of interest for active duty service members
(p) Disclosures
(q) Eligibility for, and interest charges on, federal direct stafford loans for new borrowers on or after July 1, 2013
A.2 FFEL
20 U.S.C. § 1077. Eligibility of student borrowers and terms of federally insured student loans
(a) List of requirements
(b) Special rules for multiple disbursement
(c) Special repayment rules
(d) Borrower information
20 U.S.C. § 1078. Federal payments to reduce student interest costs
(d) Usury laws inapplicable
(e) Repealed
(g) Action on insurance program and guaranty agreements
(h) Repealed
20 U.S.C. § 1078-3. Federal consolidation loans
(a) Agreements with eligible lenders
(b) Contents of agreements, certificates of insurance, and loan notes
(c) Payment of principal and interest
(d) Special program authorized
(e) Termination of authority
(f) Interest payment rebate fee
20 U.S.C. § 1078-6. Default reduction program
(a) Other repayment incentives
(b) Satisfactory repayment arrangements to renew eligibility
(c) Financial and economic literacy
20 U.S.C. § 1080a. Reports to consumer reporting agencies and institutions of higher education
20 U.S.C. § 1083. Student loan information by eligible lenders
(a) Required disclosure before disbursement
(b) Required disclosure before repayment
(c) Separate notification
(d) Special disclosure rules on plus loans, and unsubsidized loans
(e) Required disclosures during repayment
(f) Cost of disclosure and consequences of nondisclosure
20 U.S.C. § 1087. Repayment by Secretary of loans of bankrupt, deceased, or disabled borrowers; treatment of borrowers attending schools that fail to provide a refund, attending closed schools, or falsely certified as eligible to borrow
A.3 Perkins Loans
20 U.S.C. § 1087bb. Allocation of funds
20 U.S.C. § 1087cc. Agreements with institutions of higher education
(a) Contents of agreements
(c) Cooperative agreements with consumer reporting agencies
(d) Limitation on use of interest bearing accounts
(e) Special due diligence rule
20 U.S.C. § 1087cc-1. Student loan information by eligible institutions
20 U.S.C. § 1087dd. Terms of loans
(a) Terms and conditions
(b) Demonstration of need and eligibility required
(c) Contents of loan agreement
(d) Availability of loan fund to all eligible students
(e) Forbearance
(f) Special repayment rule authority
(g) Discharge
(h) Rehabilitation of loans
(i) Incentive repayment program
(j) Armed Forces student loan interest payment program
(k) Additional safeguards
A.4 General Provisions
20 U.S.C. § 1091. Student eligibility
(b) Eligibility for student loans
(c) Satisfactory progress
(d) Students who are not high school graduates
(e) Certification for GSL eligibility
(f) Loss of eligibility for violation of loan limits
(g) Verification of immigration status
(h) Limitations of enforcement actions against institutions
(i) Validity of loan guarantees for loan payments made before immigration status verification completed
(j) Repealed
(k) Special rule for correspondence courses
(l) Courses offered through telecommunications
(m) Students with a first baccalaureate or professional degree
(n) Data base matching
(o) Study abroad
(p) Verification of social security number
(q) Verification of income data
(r) Suspension of eligibility for drug-related offenses
(s) Students with intellectual disabilities
(t) Data analysis on access to federal student aid for certain populations
20 U.S.C. § 1091a. Statute of limitations, and State court judgments
20 U.S.C. § 1091b. Institutional refunds
(a) Return of title IV funds
(b) Return of title IV program funds
(c) Withdrawal date
(d) Percentage of the payment period or period of enrollment completed
20 U.S.C. § 1094. Program participation agreements
(a) Required for programs of assistance; contents
(c) Audits; financial responsibility; enforcement of standards
(d) Implementation of non-title IV revenue requirement
(e) Code of conduct requirements
(f) Institutional requirements for teach-outs
(g) Inspector General report on gift ban violations
(h) Preferred lender list requirements
20 U.S.C. § 1095a. Wage garnishment requirement
A.5 Selected Debt Collection Statutes
31 U.S.C. § 3716. Administrative offset
31 U.S.C. § 3720A. Reduction of tax refund by amount of debt
31 U.S.C. § 3720D. Garnishment
A.6 Private Loans
15 U.S.C. § 1638. Transactions other than under an open end credit plan
15 U.S.C. § 1650. Preventing unfair and deceptive private educational lending practices and eliminating conflicts of interest
(b) Prohibition on certain gifts and arrangements
(c) Prohibition on co-branding
(d) Advisory board compensation
(e) Prohibition on prepayment or repayment fees or penalty
(f) Credit card protections for college students
(g) Additional protections relating to borrower or cosigner of a private education loan
Appendix B Federal Regulations
B.1 Direct Loan Regulations
Listing of Provisions, Source, and Authority
34 C.F.R. § 685.102 Definitions.
34 C.F.R. § 685.200 Borrower eligibility.
34 C.F.R. § 685.204 Deferment.
34 C.F.R. § 685.205 Forbearance.
34 C.F.R. § 685.206 Borrower responsibilities and defenses.
34 C.F.R. § 685.207 Obligation to repay.
34 C.F.R. § 685.208 Repayment plans.
34 C.F.R. § 685.209 Income-contingent repayment plans.
34 C.F.R. § 685.210 Choice of repayment plan.
34 C.F.R. § 685.211 Miscellaneous repayment provisions.
34 C.F.R. § 685.212 Discharge of a loan obligation.
34 C.F.R. § 685.213 Total and permanent disability discharge.
34 C.F.R. § 685.214 Closed school discharge.
34 C.F.R. § 685.215 Discharge for false certification of student eligibility or unauthorized payment.
34 C.F.R. § 685.216 Unpaid refund discharge.
34 C.F.R. § 685.219 Public Service Loan Forgiveness Program.
34 C.F.R. § 685.220 Consolidation.
34 C.F.R. § 685.221 Income-based repayment plan.
34 C.F.R. § 685.222 Borrower defenses.
B.2 FFEL Regulations
34 C.F.R. § 682.200 Definitions.
34 C.F.R. § 682.201 Eligible borrowers.
34 C.F.R. § 682.202 Permissible charges by lenders to borrowers.
34 C.F.R. § 682.209 Repayment of a loan.
34 C.F.R. § 682.210 Deferment.
34 C.F.R. § 682.211 Forbearance.
34 C.F.R. § 682.212 Prohibited transactions.
34 C.F.R. § 682.215 Income-based repayment plan.
34 C.F.R. § 682.402 Death, disability, closed school, false certification, unpaid refunds, and bankruptcy payments.
34 C.F.R. § 682.405 Loan rehabilitation agreement.
34 C.F.R. § 682.410 Fiscal, administrative, and enforcement requirements.
34 C.F.R. § 682.411 Lender due diligence in collecting guaranty agency loans.
B.3 Perkins Loan Regulations
34 C.F.R. § 674.33 Repayment.
34 C.F.R. § 674.34 Deferment of repayment—Federal Perkins loans, NDSLs and Defense loans.
34 C.F.R. § 674.38 Deferment procedures.
34 C.F.R. § 674.39 Loan rehabilitation.
34 C.F.R. § 674.50 Assignment of defaulted loans to the United States.
34 C.F.R. § 674.51 Special definitions.
34 C.F.R. § 674.52 Cancellation procedures.
34 C.F.R. § 674.61 Discharge for death or disability.
B.4 Other Federal Financial Assistance Regulations
B.4.1 Selected Institutional Eligibility Requirements
34 C.F.R. § 600.1 Scope.
34 C.F.R. § 600.2 Definitions.
34 C.F.R. § 600.3 [Reserved]
34 C.F.R. § 600.4 Institution of higher education.
34 C.F.R. § 600.5 Proprietary institution of higher education.
34 C.F.R. § 600.6 Postsecondary vocational institution.
34 C.F.R. § 600.7 Conditions of institutional ineligibility.
34 C.F.R. § 600.8 Treatment of a branch campus.
34 C.F.R. § 600.9 State authorization.
34 C.F.R. § 600.10 Date, extent, duration, and consequence of eligibility.
34 C.F.R. § 600.11 Special rules regarding institutional accreditation or preaccreditation.
34 C.F.R. § 600.20 Notice and application procedures for establishing, reestablishing, maintaining, or expanding institutional eligibility and certification.
B.4.2 Selected Student Assistance General Provisions
34 C.F.R. § 668.1 Scope.
34 C.F.R. § 668.2 General definitions.
34 C.F.R. § 668.3 Academic year.
34 C.F.R. § 668.4 Payment period.
34 C.F.R. § 668.5 Written arrangements to provide educational programs.
34 C.F.R. § 668.6 Reporting and disclosure requirements for programs that prepare students for gainful employment in a recognized occupation.
34 C.F.R. § 668.7 [Reserved]
34 C.F.R. § 668.8 Eligible program.
34 C.F.R. § 668.9 Relationship between clock hours and semester, trimester, or quarter hours in calculating Title IV, HEA program assistance.
34 C.F.R. § 668.11 Scope.
34 C.F.R. § 668.12 [Reserved]
34 C.F.R. § 668.13 Certification procedures.
34 C.F.R. § 668.14 Program participation agreement.
34 C.F.R. § 668.15 Factors of financial responsibility.
34 C.F.R. § 668.16 Standards of administrative capability.
34 C.F.R. § 668.17 [Reserved]
34 C.F.R. § 668.18 Readmission requirements for servicemembers.
34 C.F.R. § 668.19 Financial aid history.
34 C.F.R. § 668.20 Limitations on remedial coursework that is eligible for Title IV, HEA program assistance.
34 C.F.R. § 668.21 Treatment of title IV grant and loan funds if the recipient does not begin attendance at the institution.
34 C.F.R. § 668.22 Treatment of Title IV funds when a student withdraws.
34 C.F.R. § 668.32 Student eligibility—general.
34 C.F.R. § 668.71 Scope and special definitions.
34 C.F.R. § 668.72 Nature of educational program.
34 C.F.R. § 668.73 Nature of financial charges.
34 C.F.R. § 668.74 Employability of graduates.
34 C.F.R. § 668.75 [Reserved]
B.5 Selected Debt Collection Procedures
B.5.1 Administrative Offset
34 C.F.R. § 30.1 What administrative actions may the Secretary take to collect a debt?
34 C.F.R. § 30.2 On what authority does the Secretary rely to collect a debt under this part?
34 C.F.R. § 30.20 To what do §§ 30.20–30.31 apply?
34 C.F.R. § 30.21 When may the Secretary offset a debt?
34 C.F.R. § 30.22 What notice does the debtor receive before the commencement of offset?
34 C.F.R. § 30.23 How must a debtor request an opportunity to inspect and copy records relating to a debt?
34 C.F.R. § 30.24 What opportunity does the debtor receive to obtain a review of the existence or amount of a debt?
34 C.F.R. § 30.25 How may a debtor obtain an oral hearing?
34 C.F.R. § 30.26 What special rules apply to an oral hearing?
34 C.F.R. § 30.27 When does the Secretary enter into a repayment agreement rather than offset?
34 C.F.R. § 30.28 When may the Secretary offset before completing the procedures under §§ 30.22–30.27?
34 C.F.R. § 30.29 What procedures apply when the Secretary offsets to collect a debt owed another agency?
34 C.F.R. § 30.30 What procedures apply when the Secretary requests another agency to offset a debt owed under a program or activity of the Department?
34 C.F.R. § 30.31 How does the Secretary apply funds recovered by offset if multiple debts are involved?
B.5.2 Tax Refund Offset
34 C.F.R.§ 30.33 What procedures does the Secretary follow for IRS tax refund offsets?
B.5.3 Administrative Wage Garnishment
34 C.F.R. § 34.1 Purpose of this part.
34 C.F.R. § 34.2 Scope of this part.
34 C.F.R. § 34.3 Definitions.
34 C.F.R. § 34.4 Notice of proposed garnishment.
34 C.F.R. § 34.5 Contents of a notice of proposed garnishment.
34 C.F.R. § 34.6 Rights in connection with garnishment.
34 C.F.R. § 34.7 Consideration of objection to the rate or amount of withholding.
34 C.F.R. § 34.8 Providing a hearing.
34 C.F.R. § 34.9 Conditions for an oral hearing.
34 C.F.R. § 34.10 Conditions for a paper hearing.
34 C.F.R. § 34.11 Timely request for a hearing.
34 C.F.R. § 34.12 Request for reconsideration.
34 C.F.R. § 34.13 Conduct of a hearing.
34 C.F.R. § 34.14 Burden of proof.
34 C.F.R. § 34.15 Consequences of failure to appear for an oral hearing.
34 C.F.R. § 34.16 Issuance of the hearing decision.
34 C.F.R. § 34.17 Content of decision.
34 C.F.R. § 34.18 Issuance of the wage garnishment order.
34 C.F.R. § 34.19 Amounts to be withheld under a garnishment order.
34 C.F.R. § 34.20 Amount to be withheld under multiple garnishment orders.
34 C.F.R. § 34.21 Employer certification.
34 C.F.R. § 34.22 Employer responsibilities.
34 C.F.R. § 34.23 Exclusions from garnishment.
34 C.F.R. § 34.24 Claim of financial hardship by debtor subject to garnishment.
34 C.F.R. § 34.25 Determination of financial hardship.
34 C.F.R. § 34.26 Ending garnishment.
34 C.F.R. § 34.27 Actions by employer prohibited by law.
34 C.F.R. § 34.28 Refunds of amounts collected in error.
34 C.F.R. § 34.29 Enforcement action against employer for noncompliance with garnishment order.
34 C.F.R. § 34.30 Application of payments and accrual of interest.
B.5.4 Collection Costs and Penalties
34 C.F.R. § 30.60 What costs does the Secretary impose on delinquent debtors?
34 C.F.R. § 30.61 What penalties does the Secretary impose on delinquent debtors?
B.5.5 Compromise of Debts
34 C.F.R. § 30.70 How does the Secretary exercise discretion to compromise a debt or to suspend or terminate collection of a debt?
B.5.6 Department of Treasury Debt Collection Regulations
31 C.F.R. § 285.4 Offset of Federal benefit payments to collect past-due, legally enforceable nontax debt.
31 C.F.R. § 901.3 Collection by administrative offset.
B.6 Selected Private Student Loan Regulations
12 C.F.R. § 1026.46 Special disclosure requirements for private education loans.
12 C.F.R. § 1026.47 Content of disclosures.
12 C.F.R. § 1026.48 Limitations on private education loans.
Appendix C Policy Guidance and Reports
Policy Guidance Materials
Appendix D Student Loan Forms
Student Assistance Forms
Appendix E Sample Pleadings, Letters, and Discovery Requests
Sample Pleadings, Letters, and Discovery Requests
Appendix F Directory of Guaranty Agencies
Directory of Guaranty Agencies
Appendix G Student Loan Collection Agencies
Student Loan Collection Agencies
Appendix H NCLC’s Student Loan Borrower Assistance Website
NCLC’s Student Loan Borrower Assistance Website
Appendix I Student Loans on the Web
National Consumer Law Center Websites
U.S. Government Complaint Websites
Other U.S. Government Agency Websites
Student Loan Press Websites
Challenges to Collection Letters, Garnishment
Disability Discharges
For-Profit School Abuses
Loan Cancellation and Forgiveness
Dept. Ed. Forms
Group Discharge Letters
Unpaid Refund
Spouses and Parents of 9/11 Victims
Repayment Plans, Compromises
Federal Loan Notes and Applications
Private Loan Notes and Applications
Non-Mortgage Debt Forgiveness as Taxable Income
Tax, Administrative Offsets
Department of Treasury Debt Collection Regulations
Gainful Employment Requirements
FFEL Regulations
Direct Loan Regulations
Perkins Regulations
Truth in Lending Private Education Loan Regulations
Federal Interpretation Letters
Other Student Relief Requests
Reports, Other Info
Department of Education Reports and Handbooks
CFPB Reports
OCC Comptroller's Handbook on Student Lending
Reports for Student Advocates
NCLC Comments
Proprietary School Revenue Report
Private Debt Collection Agencies
Private Loan Investigations, Reviews
School Investigations, Reviews
Blake Business School
Robert Fiance Schools
SCS Business and Technical Institute
Superior Training Services
United Education and Software
Wilfred Beauty Academy
This checklist should help advocates organize and review a student loan case. Extensive information about each topic in the checklist can be found in this treatise. A sample intake checklist is available online as companion material to this treatise.309 Advocates should also be prepared to submit third-party authorization forms to the Department, loan holders, servicers, and collectors.310
Before reviewing the various options below, advocates should first determine:
• The type of student loan;
• Loan origination date;
• Whether the client is already in default;
• Whether collection has begun (and, if so, the time deadlines for responding to the collection action);311 and
• The client’s goals and financial situation.
Some clients will have a number of different types of loans. If the loan is a private loan, the rest of this checklist is not relevant. In private-loan cases, borrowers should request copies of their loan agreements to determine whether the lender promised particular benefits. The next step is generally to try to negotiate with the lender unless the borrower has a legal claim or defense as discussed in Chapter 14, infra.
Throughout this analysis, it is important to speak with clients about their goals. Do they want to go back to school? If so, getting out of default as soon as possible is critical. If instead they are primarily interested in stopping the collection efforts, it is then important to focus on challenging collection efforts, as discussed in Chapters 8 and 9, infra, and, if there is a school-related defense, as discussed in Chapter 10, infra. In addition, possible fair debt collection violations, discussed in Chapter 8, infra, should also be considered.
It is important to get a sense of the client’s overall budget and, in particular, to determine whether the client is collection-proof. A client is collection-proof if he or she does not have any money or property that can legally be taken to pay the debt.
It is difficult, although not impossible, for a client to be completely protected from government student loan collection. Clients without significant federal benefits, without wages, without tax refunds, and with no other significant assets will most likely be safe from student loan collection, at least temporarily. However, as discussed in Chapter 8, infra, the elimination of a statute of limitations for federal student loan collections means that the debt may come back to haunt the client in the future.
309 {309} The sample intake checklist is available as online companion material to this treatise (see under the Practice Tools heading, then click on the Student Info link).
310 {310} Third-party authorization forms are available online as companion material to this treatise (see under the Practice Tools heading, then click on the Privacy Forms link). Additionally, the Department of Education ombudsman has used its own third-party authorization form, which is available as companion material to this treatise.
311 {311} See Chs. 8 (possible fair debt violations and defenses to collection actions), 9 (defenses to tax refund intercepts, wage garnishments, and federal benefits offsets), 10 (school-related defenses to repayment), infra.