Welcome to Student Loan News, a weekly summary of developments and events affecting college debt in the U.S. Join us each Friday for a look at goings on that could affect your own student loan situation.
CFPB goes dark on student loan report
Every October since 2012, the student loan ombudsman at the Consumer Financial Protection Bureau has issued a report on student loans, including recommendations on how to improve the system. In fact, the annual report is required under the Dodd-Frank financial reforms.
And yet, no report has emerged so far this year, according to MarketWatch. The news account quoted Persis Yu, an advocate for student loan borrowers, as saying the lack of a 2018 report (at least so far), “means that there are problems that are not being addressed.”
That said, a report out Monday from the newly founded advocacy group Student Borrower Protection Center said that as of early December, the CFPB had received 13,283 complaints from borrowers in 2018.
Allegedly hidden study says Wells Fargo charged high fees to students
Speaking of unpublished reports from the CFPB, a bureau study — that was purportedly withheld from the public — accused banking giant Wells Fargo of charging unusually high fees for college students to use debit cards and other financial products, Politico reports.
Politico, which obtained the report through a Freedom of Information request, said the CFPB had analyzed financial products provided through partnerships with U.S. colleges. The data showed that Wells Fargo had about a quarter of the accounts surveyed but collected more than half of all fees.
A Wells Fargo spokesperson quoted by Politico said the bank doesn’t charge extra for its products aimed at college students, but that some schools have “higher concentrations of non-traditional or part-time students with more complex banking needs, such as sending wires or purchasing more checks.”
The Politico report cited former CFPB student loan ombudsman Seth Frotman as saying the bureau’s leaders had “suppressed the publication” of the report. Frotman resigned from the CFPB earlier this year to protest administration policies.
‘Game of Loans’ gallops onward, with trouble for Ameritech
Launched in October 2017, the Federal Trade Commission’s (FTC) awesomely named “Operation Game of Loans” has reportedly netted some more alleged student loan scammers.
According to the debt-related publication InsideARM, two Florida-based “student loan debt relief companies” — Student Debt Doctor and American Student Loan Consolidators — settled with the FTC over deceptive practices late last month, paying $2.2 million and $1.3 million, respectively.
But it was a third student debt company, Ameritech Financial, that made the biggest news after its CEO was arrested at San Francisco International Airport while trying to board a flight to Mexico. Ameritech and a pair of affiliated firms were the subject of an FTC civil lawsuit in February, saying the company bilked tens of thousands of borrowers out of as much as $60 million, according to a report in the Press-Democrat, a Northern California newspaper.
Prosecutors argued that Ameritech CEO Brandon Frere had planned to flee the country permanently, pointing to at least $9 million in assets he had moved to accounts in Europe, the Press-Democrat said. Frere’s lawyer, however, said his client had merely intended to spend a romantic weekend in Cancun.
It’s worth repeating that the term “debt relief company” covers a wide variety of organizations, some of which are outright scams. Check out our guide to finding out if a given debt relief firm is trustworthy.
PSLF is really a thing … at least for this person
And finally, a bit of good news: While few people have reported getting their remaining student loan balances canceled under the government’s Public Service Loan Forgiveness (PSLF) program, student loan lawyer Adam Minsky writes in Forbes that one of his clients has in fact, really and truly, received a PSLF award.
Minsky said the student loan borrower in question — whom he doesn’t name — was working for a non-profit since 1999. She not only received loan forgiveness, he wrote, but also scored a refund for nine payments which she had apparently overpaid.
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Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|