Now that the President has decreed a new “Student Aid Bill of Rights”, the ship of state will turn slowly toward a better way for student borrowers to manage all their loans through one portal. A new centralized complaint system will give more borrowers the ability to resolve disputes with loan servicers and debt collection agencies.
Thanks to the National Consumer Law Center and it’s Student Loan Borrower Assistance project, a prototype of this new system exists now. Watch this video to get a guided tour of how the Student Loan Borrower Assistance (.org) website links the pieces of the new system together.
If I was asked to magically build a new system to get student loan help, I would create the new loan management portal using the building blocks provided by the the National Student Loan Data System. Currently, this system provides credentialed visitors with access to all their Federal student loan information. However, the visitor cannot find information about his/her private student loans. This is the next important task. But it’s just too hard to think about compiling private student loan information, so my magic wand would just “Make It So”!
As for the centralized complaint reporting piece of the new “Student Aid Bill of Rights”, I would just (poof!) combine the best parts of the two existing Student Loan Ombudsman offices. The Department of Education now handles complaint arbitration for Federal student loan disputes. The Consumer Financial Protection Bureau’s Student Loan Ombudsman office makes a specialty of resolving private student loan disputes. Cue the magic MixMaster!
And finally, just like the Student Loan Borrower Assistance website, I would have a whole list of free legal help right there on the new centralized complaint system website. Hey, not every student loan complaint can be resolved in a tidy fashion. What’s more, the rule against discharging student loan debt through bankruptcy looks like it’s on the table for revision. New bankruptcy rules will produce a tsunami of borrowers who will need legal guidance. Or a fairy godmother!
Watch my video to refresh your knowledge of for-profit college companies! Then get a load of their newest business venture: charter schools!
A “little trouble” with the feds can’t stop for-profit college companies from continuing to feed at the public trough! Some of the biggest for-profit college chains have come under federal scrutiny recently. They did not fare well. Several have been told to cease operations for defrauding students. Others have been told to adhere to tougher student achievement standards in order to stay open. And still more are being monitored for their higher-than-usual student loan default rates.
So what would you expect of these huge companies whose business model is to enroll low income students in their colleges, just to gain access to federal education funding, like Pell grants and Student Loans? Would you expect them to just pack up their bags and leave quietly? Well…no.
Sure enough, just like Whack-a-Mole, they’re back with a business model that is not brand-new, but is just now ripe for the picking. How about charter schools? Yes, for-profit education companies have crept their way into the public school systems of many states. Their new name is Education Management Organization or EMO.
Sure, I know, we all think of charter schools as being run by well-meaning non-profit 501(c)(3) corporations. Charter schools are supposed to provide alternatives for students in poorly performing schools, courtesy the state and federal taxpayers.
The only trouble is that many of the non-profit corporations that were originally formed to run these charter schools started needing help with the day-to-day operations of the schools. The non-profits started hiring the EMO’s to run the schools. And while the duties started small at first, the EMO’s were later asked to take over just about everything, student education included!
Oh, and guess what? The for-profit EMO’s wanted to MAKE A PROFIT! Can you believe it? Just one little problem: taxpayers who thought they were providing additional school choice for students in failing schools, now find themselves supporting the bottom line of for-profit companies.
Looks like we’ll be needing some stronger oversight regulations pretty soon. What do you think?
Seems like the payments on your college loans will never end, right? Well they will someday, due in no small part to your diligent efforts to stay in touch with your federal student loan servicer. At least that’s what I hope you do, or what I hope you would tell your college-bound child to do! Check out my latest rant (I mean video) on this issue !