On 2/28/23 6:42 PM, ScottW wrote:
On Friday evening, federal Judge William Alsup ruled that a
settlement he had already approved last year resulting from a lawsuit
— Sweet v. Cardona — can move forward, which would give 200,000
borrowers defrauded by the schools they attended $6 billion in debt
relief.
First question....who is the actual lender? I doubt these schools
had 6B$ laying around to fork out to deadbeats who are getting a crap education. I suspect some kind of bank and/or gov't program is left
holding the bag and some of these schools will fold.
The student loans are backed by the Education Department, which is why
this relief is possible.
As for the schools folding, as did Corinthian, they were defrauding
students by hoovering up their loan money in exchange for shoddy
education. AP: ITT misled students about their ability to transfer
course credits to other colleges. Credits were rarely accepted
elsewhere, the department said, leaving students with “little to no progress” in their academic careers.
But further down the road, the cost of student loans will certainly
increase as non-gov't lenders have to factor in this risk factor.
There's no risk factor. The schools get paid upfront. The lenders
usually sell their loans to educational loan repayment specialists who
can count on federal programs to guarantee returns.
If there's an increase in the risk that fraudulent schools are caught,
that's all to the good.
Schools will be unable to finance some courses...I suspect financing
an education in piano teaching is now off the table. Schools may
ultimately be unable to offer degrees that have no demand in the job
market.
What are you talking about? Whether or not degrees get offered will be
decided as it always has.
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