A new federal report reveals that the the number of student loan borrowers who are age 60 and old has sharply increased in recent years due in part to their role as co-signers on loans for their children and grandchildren. 

The report was released this month by the Consumer Financial Protection Bureau's Office for Older Americans  and Office for Students and Young Consumers.

The number of consumers who are 60 or older with one or more student loans increased from approximately 700,000 in 2005 to 2.8 million in 2015 and the group's average amount of debt increased from $12,100 to $23,500, according to the report.

These numbers highlight that the student loan debt crisis -- fueled largely by predatory for-profit colleges' enrollment tactics -- affects Americans of all ages.
Thousands of former students of a nationwide beauty school chain may be able to avoid payment on federal student loans used to pay tuition at the now-defunct company.

A federal appeals court recently ruled that borrowers who used federal loans to pay for programs at the Wilfred Academy could pursue a case against the U.S. Department of Education regarding its entitlement to collect on student loans even though Wilfred engaged in financial aid fraud prior to its shut down in 1994.

Prior to its closure, Wilfred had received more than $400 million in federal student aid from more than 60,000 students at approximately 60 campuses operated around the United States.

Low-income borrowers are often the "primary targets of predatory schools," according to Harvard Law School official Toby Merrill, who is supporting the student borrowers in the case. Merrill told Reuters that the court decision shows that the Department of Education must consider the rights of former students in such cases.

The U.S. Department of Education plans to make it simpler for student borrowers who often are riddled by complicated procedures that often are favored by for-profit loan servicers. 

On April 4, the Department announced plans for a single web portal for borrowers to make repayment on their loans. The site will contain information about students' loans, payments and benefits in one place. 

Consumer advocates have long criticized a federal student loan system that did not include sufficient oversight over the for-profit companies that service the loans and benefit from complexity and bureaucracy that has made it difficult for borrowers to pay and understand their debt.

The new portal will aim to have:
  • Department of Education-branded communication that is standard.
  • A streamlined borrower experience through a single web portal.
  • Better customer service practices.
  • Reduced loan transfers and borrower disruptions that make it difficult for borrowers to keep current.
  • Enhanced oversight and accountability.
  • A single platform for all Federal student loans.

The Education Department is in the planning stages on the new web portal and is inviting comment from borrowers, experts and others on the student loan repayment system.

A federal judge has tossed a lawsuit brought by a handful of student-loan debt collectors seeking to dispute their firing by the U.S. Department of Education for allegedly providing inaccurate information to borrowers about their loans and rights.
The ruling by a judge on the U.S. Court of Federal Claims denied the stay that the companies were seeking to prevent being dropped from the federal government's loan collection business.
The companies whose contracts were cancelled by the Department of Education in March are Coast Professional, Enterprise Recovery Systems, National Recoveries, Pioneer Credit Recovery, and West Asset Management.
The widely publicized student loan debt revolt started by a group of former students of Corinthian Colleges -- known as the Corinthian 15 -- has enlisted an additional 85 protestors.  Enter the newly entitled "Corinthian 100."

As recently reported by The Washington Post, the "'debt strike' has picked up 85 more disgruntled borrowers" from Corinthian schools who are  "willing to jeopardize their financial future to pressure the government into forgiving their student loans."

The Post says, "Corinthian, which runs Everest Institute, Wyotech and Heald College, has become the poster child for the worst practices in the for-profit education sector, including high loan defaults and dubious programs. Clouded by allegations of deceptive marketing and lying to the government about its graduation rates, Corinthian lost its access to federal funds last year, forcing the company to sell or close its schools."

"In the aftermath, current and former students of the for-profit schools have called on the Education Department to wipe away debt they say Corinthian pressured them into taking. After months of pleading with the department to forgive the federal loans, the students teamed with an offshoot of the Occupy Wall Street movement known as the Debt Collective. Together, they came up with the idea for the strike."

"It’s a dicey move because students who default can lose their paychecks, tax refunds or even a portion of their Social Security. Not paying back debt can also ruin someone’s credit, making it difficult to buy a house or car, or to get a job."

The Huffington Post reports that President Barack Obama will announce this week "sweeping borrower-friendly recommendations to fix the $1.1 trillion federal student loan system."

According to the website, "Obama's 'Student Aid Bill of Rights' includes recommendations for a new Education Department complaint system so grievances filed by students and borrowers are referred to regulators and law enforcement agencies; mandatory disclosures by the Education Department when borrowers' accounts are shuffled between loan companies; and a directive that the Education Department increase its cooperation with White House offices and other government agencies when it comes to understanding borrower behavior, identifying trends in student debt, and improving its interactions with its loan contractors."
Patricia Ann Bowers has a story to tell about $57,000 in debt owed to the federal government for student loans paid to a for-profit school from which she was unable to earn a bachelor's degree.

Ms. Bowers is one of the "Corinthian 15," a group of 15 working adults who now find themselves deep in debt to the government after disillusioning experiences with schools run by Corinthian Colleges, a for-profit education company that has folded in recent months following intense government scrutiny of their enrollment practices and placement success.  

According to Ms. Bowers, Everest College -- one of Corinthian's subsidiaries -- assured her during repeated recruitment calls that they could accommodate her physical limitations due to accidents and help realize her dream of earning a bachelor's degree in marketing.  

But when she suffered a tragic loss of a son and sought to take some time off, the school refused to give her a leave of absence, telling her that she needed to remain enrolled even if she was unable to attend classes or do well in them.  She incurred so much loan debt in the course of three years of pursuit of a bachelor's degree that she has become ineligible for any additional federal student aid now -- even though she is still short of the credits needed for a bachelor's.

Now Ms. Bowers is refusing to pay the money back -- part of an organized "debt strike" among 15 former Corinthian students aimed at convincing thousands of others to do the same in an effort to bring attention to a national epidemic of student loan debt incurred by adults who are recruited by for-profit schools to pursue programs that they are unable to complete or to leverage into jobs in their chosen field.

Ms. Bowers' story -- and those of others in the Corinthian 15 -- are featured in a lengthy article published by  

Another member of the Corinthian 15 is Mallory Heiny, a woman from western Michigan who attended Everest Institute in Grand Rapids, incurring nearly $30,000 in student loan debt of a license practical nurse diploma that she was unable to attain before the program shut down.  Ms Heiny told Fox 17 that she was informed that she was ineligible for a discharge of her loan because she had been in the program too long.

The Washington Post also covers the Corinthian 15, along with the Huffington Post with this item.  As does Newsweek with a story and this graphic:
The U.S. Department of Education, in a surprise move, has terminated its contracts with five debt collection companies.  The reason given:  Misleading borrowers at "unacceptably high rates."

As detailed in a recent Huffington Post report, the Education Department said its move was precipitated by  "'high incidences of materially inaccurate representations'to borrowers that it discovered in reviews spanning several months.

The five debt collectors, according to the department, misled borrowers about their options to get out of default, the resulting benefits to their credit reports and collection fees. Misleading borrowers about their defaulted debts may violate federal fair debt collection laws."

"Every company that works for the department must keep consumers’ best interests at the heart of their business practices by giving borrowers clear and accurate guidance," said Education Undersecretary Ted Mitchell. "It is our responsibility -- and our commitment -- to uphold the highest standards of service for America’s student borrowers and consumers."

The debt collection companies affected by the Education Department's actions are: Pioneer Credit Recovery, owned by Navient Corp., the student loan company previously known as Sallie Mae; Coast Professional; Enterprise Recovery Systems; National Recoveries; and West Asset Management.

The Huff Post also reported, "The Education Department said it would transfer accounts from affected companies, including Pioneer, to its other debt collectors, and would officially terminate its relationship with the companies once all accounts have been moved over. The move is the department's most forceful response in years to alleged misdeeds by its student loan contractors."

U.S. Senator Elizabeth Warren (D-Mass.) and Massachusetts Attorney General Maura Healey are among a growing number of national and state leaders urging the U.S. Department of Education to forgive massive student loan debt accrued by former students of Corinthian Colleges, the now-failed for-profit education company.

These leaders claim that Corinthian, through the schools that it operated like Everest Institute, Heald College and Wyotech, engaged in predatory recruitment practices that harmed thousands of working adults now saddled with large debts and no degrees, many of whom were first-generation college students.

 In one letter to U.S. Education Secretary Arne Duncan, Senator Warren and 11 of her colleagues urged the government to utilize its authority "to immediately discharge federal student loans incurred by borrowers who have claims against Corinthian Colleges, Inc."

Mother Jones magazine reports that Senator Warren has devoted considerable energy to the student debt crisis since gaining election in 2012.  

"The first bill she introduced upon her arrival in the Senate in 2013 proposed allowing students to obtain loans at the same low rate the Federal Reserve gives to banks," the magazine writes.  "That bill went nowhere, so the following year Warren returned with a second proposal to allow Americans to refinance their student debt at current interest rate levels. Senate Republicans blocked it. Now Warren is turning to the Department of Education, which, she argues, already has the power to address the problem. The department, which Congress has empowered to administer student loan programs, has broad authority to collect unpaid loans. But in many cases, it also have the authority to reduce or wipe away debts."
The NY Times is calling for stricter federal regulations aimed at colleges that saddle students with crushing debt and few job prospects.  In an editorial, the Times wrote, "The Obama administration’s proposed rules that would deny federal aid to career training programs that saddle students with crushing debt and useless credentials are a clear improvement over the disastrous status quo. But they will need to be strengthened to fully protect students and taxpayers from predatory for-profit schools that rely on federal student aid for up to 90 percent of their revenue and are well versed in the art of evading the law."