Bankruptcy Relief for Private Student Loan Borrowers Advances
Yesterday the House Judiciary Committee's Subcommittee on Commercial and Administrative Law took a stand for students and consumers by passing the Private Student Loan Bankruptcy Fairness Act of 2010 (H.R. 5043). The bill reverses the unfair and unjustified special protections for lenders of private student loans enacted in 2005. There have been two hearings on the topic in the past year, but this was the first time this bill came up for a vote, and it passed 6-3 with no amendments. Under the new legislation private student loans would once again be treated like other consumer debt in bankruptcy.
Take action to keep the bill moving! The bill still needs to pass the Judiciary Committee, the House floor, and the Senate. Urge your members of Congress to cosponsor H.R. 5043 and S. 3219 in the Senate so that we can keep up the momentum!
Student Loan Defaults Rise Again
The U.S. Department of Education released new data this week showing that the national "cohort default rate" on federal student loans is 7.0 percent. The default rate at for-profit colleges is highest at 11.6 percent - almost double the average rate for public colleges. Nearly half of all defaulters (43 percent) attended for-profit schools, even though these schools enrolled only about ten percent of all college students during the relevant time period.
The Comments are in for Gainful Employment
Thanks to so many of you who sent in public comments calling for a strong "gainful employment" regulation to protect students and taxpayers from career education programs that over-charge and under-deliver. Tens of thousands of comments were submitted, and we know that almost 30,000 of them, probably more, were in favor of strong regulations. We'll continue to keep you informed about this important topic, including when the rule is finalized around November 1, both through these emails and at www.protectstudentsandtaxpayers.org.