For many decades, numerous “for profit” colleges have pressured students with questionable educational backgrounds into signing up for loans. These schools often know that these students may never be able to repay their loans – unless they outperform all reasonable expectations and obtain truly gainful employment immediately after graduating.
Because this practice continues, “the U. S. Consumer Financial Protection Bureau (CFPB) is now investigating at least two for-profit colleges over potentially abusive practices in marketing and originating student loans.” Two of the schools are Corinthian Colleges Inc. (COCO) and ITT Educational Services Inc. (ESI) – based upon a CFPB website posting.
Details Involved with This Current Student Loan Debt Investigation
CFPB director Richard Cordray wants to help all American students buried under school loans, especially those who are possibly being deceived about all of their long-term repayment options. At present, “the total U. S. student debt burden, which is overwhelmingly government credit, has surpassed $1 trillion.” Cordray is particularly focusing on how student loans are being refinanced. As he puts it, “Many consumers seek to negotiate for more affordable payment plans on their loan obligations, only to find themselves stymied, even when a modification would make sense for all concerned.”
In the past, some students have actually seen their original debt more than double while trying to refinance their loans due to lengthy unemployment or serious health conditions. Deferment periods can be quickly used up during such major crises. These huge increases can develop while a student keeps renegotiating loan terms with one or more new financial groups.
Ways You Can Try to Protect Yourself from Excessive Student Loans
Avoid the common temptation to try and finish your schooling as quickly as possible. Take time to carefully review the following suggestions that may help you reduce your student loans while going through college.
- Consider living at home. If you and your parents have even a half-decent relationship, ask if you can live rent-free while enrolled in school. Keep in mind that your classes, part-time jobs and other activities may mean you’ll only need a place to sleep and eat a few meals;
- Give serious thought to holding down a half-time or full-time job while going through school. You can do this by just taking only one or two classes per semester. Also, consider simply pursuing an online degree with a reputable school. Some students actually combine semesters spent in “brick-and-mortar” classrooms with others just taking courses online;
- Begin searching for every possible scholarship or grant available while still attending high school -- and keep up this practice throughout college. You'll be surprised by what is actually available. For example, some sororities and fraternities offer small scholarships to people who never even join such groups and who don’t have family members who belong to them. Also, ask all of your extended family members what clubs and civic organizations they belong to and interact with on a regular basis. Many of these groups offer special scholarships. Check also to see if you qualify for any special grants or scholarships based upon your gender, ethnicity or disabling medical condition.
Keep in mind that it's usually better to attend a school with a reasonably good academic reputation that offers you large grants and scholarship money than a far more prestigious one that promises little financial help. The latter one may keep you in debt for many decades to come.
If you believe that you’re a victim of any abusive debt collection practices, contact the Law Offices of Georgia consumer protection attorney Shane Smith so that you can learn more about your rights under federal and state consumer protection statutes. Call (770) 487-8999 today to schedule your free initial consultation.