Federal Student Aid (FSA) is a governmental entity under the Department of Education that administers contracts and oversees companies that offer students loans to college students. When Obama was president, he had concerns that too many students were defaulting on their loans and the quality of service that collections agencies were providing to students. As a result, he authored three memos to FSA that required agencies to: Improve outreach efforts to students at risk of defaulting on their loans; Create a minimum standard of service that agencies have to provide to students; and Consider the possibility that agencies who provide poor service to students are penalized for providing poor service. That doesn’t sound too cumbersome, right? To require that collection agencies follow a minimum standard of service so that students have options before they default? After all, these agencies are more than happy to offer students ill-advised loans. The Trump administration apparently disagreed. On April…Read More
Odds are either you or someone you know has received an IRS scam phone call recently. Callers impersonating the IRS claim that the receiver of the call owes in back taxes, and demands immediate repayment. Many people fell victim to this scam, and approximately 15,000 people to date have been cheated out of a total of $300 million. The U.S. government fought back this week. The Justice Department has indicted 56 people and five Indian companies in connection with these calls, charging them with wire fraud, money laundering and other crimes. A total of 20 people have been arrested in the United States, and the government is seeking extradition for the remaining individuals accused of these crimes who are in India. According to the indictment, the call center operators “threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government.” They gathered phone numbers and other information…Read More
In January 2017, President Trump’s team held a “listening session” in which they sought input from several colleges. A surprising invitee to this session was DeVry University, which a month earlier had agreed to pay $100 million to settle an FTC lawsuit that accused DeVry of deceptive advertising. During President Obama’s administration, the Federal Trade Commission and the Department of Education had targeted for-profit colleges like ITT, Corinthian College, and DeVry due to their high student loan default rates and their false and misleading advertising. Corinthian College and ITT both shut down. Things were not looking good for DeVry and other for-profit colleges as the federal government and the states were increasingly seeking to protect consumers (including active military and veterans) from fraudulent conduct. Since Donald Trump was elected as president, for-profit colleges have seen a new day. This is due to an expectation that President Trump will roll back consumer-protecting regulations in favor of…Read More
Bad faith insurance is an insidious practice. It preys on good people who expect something out of their insurance policy, and on a macro level, it eats away at the trust people have in institutions. If you are considering enter into an insurance policy but have no faith that it will actually be upheld or fulfilled properly by the insurance company, then why would you agree to the policy? Without trust, there is no insurance business. Thankfully, there are guidelines and compliance regulations that force insurance companies to act in a professional manner when it comes to dealing with an insurance policy. The California Insurance Code bans bad faith insurance practices in these ways: An insurance company must acknowledge and settle a case in a timely and fair manner where liability is clear An insurance company can’t obscure the facts or misrepresent them in the case They can’t offer a settlement that is less than…Read More
Corinthian College was once a massive for-profit college chain with more than 100,000 students across more than 100 campuses nation-wide. In California, Corinthian ran Everest College, Heald, and WyoTech. Most of the college’s revenues came from federal funding and between 2010 and 2016, its students took out about $3.5 billion in federal student loans. Corinthian and its practices courted controversy, as more than 100 federal lawsuits and 21 state attorney generals investigations all targeted the college’s recruiting techniques, false and misleading advertising, high tuition, and lack of job prospects following graduation. In 2014, the Consumer Financial Protection Bureau filed a lawsuit claiming that Corinthian had engaged in unlawful predatory lending. In its announcement, the CFPB alleged that: “Corinthian lured tens of thousands of students to take out private loans to cover expensive tuition costs by advertising bogus job prospects and career services. Corinthian then used illegal debt collection tactics to strong-arm students into paying back…Read More
If you have been following our blog, you are familiar with the charges the Federal Trade Commission (FTC) has brought against DeVry University for making spurious claims about its job placement rates for graduates. At issue is the methodology the institution used in determining the percentage of graduates employed. According to the FTC, the school included students whose employment did not result from having earned a DeVry degree. Those tallied were students employed before graduating from DeVry and those not employed in their field of study. The problem with these deceptive accounting practices is that it encourages students to incur debt in order to earn a degree that may not be worth the time and tuition paid to earn college credits. Although students may struggle to obtain jobs they trained to fill, their inability to land a job does not forestall tuition payments from accumulating. For DeVry graduates, this economic situation is especially pressing because so many…Read More
A person can have a range of different insurance policies. If they rent, rather than own, the place they live, one type of policy they may have is a renters insurance policy. Among the things there is a fair amount of variation in when it comes to such policies is their cost. One of the things that can have implications on what a renters insurance policy ends up costing for a renter is where they live. This can be seen in a report on renters insurance rates in California. The report put the average cost of renters insurance in the state at $321 a year (based on a sample property and policyholder). However, some of California’s cities are seeing significantly larger rates. For example, Ventura County’ average rate is $509 a year, while Beverly Hills’ came in at $531 a year. In addition to outpacing the state rate, these rates reportedly outpace the rates of…Read More
The risks and sacrifices that come with military service to our country deserve admiration and respect. Unfortunately, this is not always what our veterans, active military members, and their families receive. In fact, because of a loophole in the law, for-profit colleges have a huge financial incentive to potentially exploit veterans and some members of their families. In 2008, the legislature passed a G.I. Bill, meant to benefit veterans serving since September 11th by authorizing subsidies for them to seek college degrees. This was meant to repay veterans for their service and sacrifice by allowing them to attend a college of their choice. Unfortunately, no good deed goes unpunished as for-profit colleges quickly found a loophole in an existing law to exploit the G.I. Bill. Referred to as the 90/10 rule, this loophole allows for-profit colleges to count G.I. Bill money in order to get more federal funding from the Department of Education. So for…Read More
Insurance companies are always going to be concerned about their profits. They will care about you, the policy holder, to the extent that they are required. But they will always try to mitigate their liability in any claim that you bring. Having said that, there are perfectly reasonable and legal reasons for an insurance company — may it be auto insurance company or a life insurance company — to deny your claim. Here are just a few of them: Your policy expired or you failed to keep up with monthly premiums. In these cases, there is little you can do. If you let your policy expire, either unknowingly or purposely, it means your coverage is gone. The contestability period. This is a period of time, usually two years, after a policy is signed by you and your insurer. If a claim is made during that time, the insurance company may contest your claim on the…Read More
The new overtime rules under the Fair Labor Standards Act (FLSA) go into effect December 1, but there is still a lot of misinformation about it. One area of confusion relates to highly-compensated and professional employees. Many people believe that these two types of workers are automatically ineligible for overtime benefits. This is not always the case. In order to be ineligible for overtime, an employee must pass three tests related to income and job duties. These categories are referred to as white collar exemptions. In the final ruling of the FLSA overtime rules, the Department of Labor states that they are “implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees.” Listed below are the three tests that can make you ineligible for overtime pay if your job falls into the above categories: Salary basis test – You must be paid a predetermined and fixed salary that is…Read More
