Rollback of Consumer Protections in Higher Education Leaves Commercial Litigation Attorneys Busy
Many are concerned about consumer fraud in student loan debt collection since the new administration has been in place; specifically, about the erosion of civil liberties and consumer protections. As a result of the various actions taken recently by the Department of Education to deregulate protection is for student loan borrowers, there is a need for more and more attorneys to step up and fight against fraudulent abuse from debt collection agencies and other harmful practices.
For example, thus far, the Education Department has withdrawn, delayed, or adjusted several federal aid measures, including those that erased federal loans for students whose who were victims of collection companies that used illegal tactics to convince them to borrow money and attend the school, as well as appoint a former DeVry University dean to lead the Student-Aid Enforcement Unit within the department. Many have pointed out that, given previous allegations against DeVry, this is similar to the fox guarding the hen house.
Changes to Student-Aid Enforcement Unit
The enforcement unit was originally founded in order to provide attorneys fighting fraud with specific tools, such as subpoenas, document requests, and interviews. This is different from compliance efforts, which are largely focused on institutional accounting practices. The Department, under DeVos, is allegedly making efforts to overlap the two and essentially turn them into the same thing.
Consumer Financial Protection Bureau Cut Off
In September, DeVos also decided to cease sharing information with the Consumer Financial Protection Bureau, which has historically used such information to sue student loan companies for fraudulent practices. This will, arguably, make oversight and accountability of collection agencies more difficult.
Litigation in Student Loan Market
As noted by The New York Times, some of the issues playing out in the $108 billion private student loan market are reminiscent of those that occurred in the mortgage crisis a decade ago in that many courts are finding that loans are uncollectible due to missing or fake documentation. Courts are also finding that private student loan companies specifically targeting vulnerable consumers due to their high interest rates and fewer consumer protections compared to federal loans.
As a general rule, debt collection agencies can only sue borrowers in good faith if they establish the chain of title. If you fail to fight these lawsuits, the companies often automatically win, and are able to garnish paychecks and take federal benefits such as Social Security from your bank account.
Reach Out to Us Today for Help
The commercial litigation attorneys of Lavalle, Brown & Ronan, P.A. have a combined 130 years of experience working in consumer fraud protection in the Boca Raton area. If you have been the victim of a debt collection agency, contact us today online or at 561-395-0000 for your free legal consultation. Let our team of experienced attorneys help guide you toward the best solution for your case.