The Department of Education said on Monday that about one in four career-training programs at U.S. colleges is at risk of losing federal funding, Bloomberg News reported today. The Education Department evaluated typical student debt and earnings information for some 1.2 million recent graduates across 8,637 such programs. About 95 percent of 2,042 at-risk vocational programs are at for-profit colleges, the department said. They range from law schools and master's degree programs to undergraduate certificates. More than 800 career-training programs across 296 schools produced graduates who recently left school with loan payments exceeding either 30 percent of their annual discretionary income or 12 percent of earnings, government data show. Read more.
Alexandria, Va. — The American Bankruptcy Institute's (ABI) updated Graduating with Debt: Student Loans under the Bankruptcy Code, 2nd Edition, has been revised and expanded to highlight a number of significant changes in one of the most volatile and important consumer debt arenas. Student loan debt in the U.S. exceeds $1.3 trillion — more than any other type of consumer debt except for mortgage loans — while student loan defaults have been increasing at an explosive pace. Authors Prof. Susan E. Hauser of North Carolina Central University School of Law (Durham, N.C.) and attorney Dr. Daniel A. Austin (Erie, Pa.) reunited to write the updated edition to provide insights about revised procedures on loan forgiveness and rehabilitation, as well as new case law — such as conflicting court decisions about the scope of § 523(a)(8)(A)(ii) and the Brunner test. The book also includes expanded coverage of special issues in chapter 13 cases, updates on litigation issues, legislative initiatives regarding student loan debt forgiveness, and much more. This comprehensive guide is a must for any practitioner involved in a student loan case.
“One of the things that we have in the new edition is much more coverage of case law because of the volume of cases and decisions between 2013 and 2016,” Prof. Hauser said on a recent podcast about the new edition of Graduating with Debt. “I think that reflects some increase in filings that are attributable to or are dealing with student loan debt.”
With unfavorable prospects for legislative relief for student loan debt in bankruptcy, Dr. Austin points out that the case law updates are key to both practitioners and consumers involved in student loan debt issues. “Conscientious courts have considered other ways to address individual student loan issues,” Dr. Austin said on the podcast.
To order your copy of Graduating with Debt: Student Loans under the Bankruptcy Code, please visit the ABI Bookstore. Members of the press looking to access a preview of the book or to arrange an interview with the authors should contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or jhartgen@abiworld.org.
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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 12,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/education-events.
Consumers increased their borrowing in November at the fastest pace in three months, the Associated Press reported yesterday. Total borrowing in November climbed $24.5 billion, compared to a smaller $16.2 billion in October, the Federal Reserve reported. The increase pushed total debt to a record of $3.75 trillion. The acceleration reflected a big jump in the category that covers credit card debt, which rose $11 billion, compared to a much smaller $2.4 billion increase in October. It was the largest monthly advance since March and was a good sign at the start of the holiday shopping season. Growth in the category that covers auto loans and student loans slowed a bit in November, showing a rise of $13.5 billion after a $13.8 billion increase in October.
Despite an upward spike in businesses seeking refuge in bankruptcy court, the total number of bankruptcy petitions actually fell for a seventh straight year in South Central Texas in 2016, the San Antonio Express-News reported today. Overall, there were 3,015 consumer and business bankruptcy filings in the San Antonio division of the U.S. Bankruptcy Court for the Western District of Texas last year — a 3.6 percent decline from the 3,127 filings recorded in 2015. It’s also the lowest number of petitions recorded since 2006. Some 125 companies or partnerships filed for bankruptcy last year in the San Antonio division, an increase of about a third from the 93 that filed in 2015. The rise in business bankruptcies locally was almost in lock-step with what occurred nationally. The American Bankruptcy Institute, citing data from Epiq Systems Inc., reported commercial bankruptcy filings rose 26 percent last year in the U.S. A lot of the increase came from three sectors — retail, real estate and energy, said John D. Penn, a partner in the Dallas office of the Perkins Coie law firm. “Zero percent interest hides a multitude of sins,” Penn said. “Once interest rates start going up, a number of borrowers will have their cash flows squeezed and (they’ll) be in more challenging situations.”
The Consumer Financial Protection Bureau (CFPB) ordered credit reporting agencies TransUnion and Equifax Inc. to pay more than $23.2 million in fines and restitution for deceiving consumers about the usefulness and cost of credit scores they bought, Reuters reported. The CFPB said that the payments also resolve charges that TransUnion and Equifax lured consumers into enrolling in credit services advertised as free or costing only $1, but which could cost more than $200 a year. TransUnion will reimburse $13.93 million to consumers and pay a $3 million civil fine, while Equifax will reimburse $3.8 million and pay a $2.5 million civil fine, the CFPB said. Both companies will also modify their marketing practices, including by obtaining consent to enroll in credit-related services where fees kick in after free trials, and making it easier for consumers to cancel products they do not want. The CFPB said the wrongful conduct had occurred at TransUnion since July 2011 and at Equifax between July 2011 and March 2014, and violated the Dodd-Frank financial reform law.
As of Dec. 1, 2016, the CFPB has handled approximately 1,058,100 complaints, including approximately 285,800 about debt collection, according to the report, ACAInternational.org reported. The monthly average of debt collection complaints since the CFPB launched the Consumer Complaint Database is 6,890. According to the report, the CFPB received 23,134 consumer complaints in November, including 6,730 about debt collection. Debt collection complaints declined 13 percent from October to November. Debt collection represents 27 percent of the total cumulative complaints submitted to the CFPB, according to the report.
Filings for U.S. unemployment benefits fell for a third week in the last four, showing a resilient labor market, Bloomberg News reported today. Jobless claims declined by 10,000 to 265,000 in the week ended Dec. 24 from a six-month high in the prior period, a Labor Department report showed today. Filings have been below 300,000 for 95 straight weeks — the longest streak since 1970 and a level economists say is typical for a healthy labor market. The four-week average of claims, a less-volatile measure than the weekly figure, fell to 263,000 from 263,750 the prior week.
