The US Department of Education is warning student borrowers of a trend involving predatory lending practices targeting US veterans. Here’s what you need to know about this week’s news and its impact on your student loans.
1 Current Student Loan Trend for the Week of March 28, 2022
1. Biden administration warns US veterans against predatory student loan practices
Following the release of a federal review, the US Department of Education issued a warning that many military and veterans have been misled about their financial aid options by their schools.
Veterans claim that college counselors led them to believe that the US government would cover the full cost of their college education through the GI Bill, which is not always the case; while the bill can cover up to 36 months of expenses at public universities in the state, tuition assistance at private or foreign colleges is capped at $26,381.37 for the 2022- 23.
Veterans Education Success reported that whistleblowers of predatory university corporations were told to hide the fact that tuition at private institutions was higher than what the GI Bill covers. Many borrowers also say they were forced to start courses that weren’t eligible for military benefits or take out student loans during their studies – and some found they were responsible for unauthorized student loans. .
How it affects student loans
The warning comes from the Department of Education’s Enforcement Office, which was reinstated earlier this year to oversee US schools and protect borrowers from deceptive practices.
The bulletin warns that colleges that engage in predatory loans to U.S. veterans could be terminated or restricted by the Department of Education’s federal student aid program. Borrowers who believe they have been misled also have the right to seek Borrower Defense of Repayment, which releases any student loan debt owed to those schools that the schools may be required to repay.
Take away key
The Department of Education found that many veterans had been misled about federal aid and that these borrowers might be eligible to have their student loans forgiven.
Here’s how you can prepare
Whether you’re new to student loans or in the process of repaying, it’s wise to stay informed about how your student loan rates might change. In 2022, more opportunities for cheaper loans or loan forgiveness may open up; keep an eye on the Bankrate student loan news hub for the latest trends.