For-Profit College Entices Students with Strippers, Buries Students in Loan Debt
Student loan debt may be one of the most challenging burdens faced by individuals in debt: it is relatively easy to accumulate, it can amount to hundreds of thousands of dollars per student, and it can be extremely difficult to discharge. Although there is no quick fix to getting rid of debt, a debt relief attorney can help you understand your rights and develop a debt management or relief plan. As demonstrated by a recent admissions fraud scandal, unfortunately, many students must face the burden of student loan debt without sufficient job opportunities.
Exotic Dancers Allegedly Boost Admission
Miami-based FastTrain College allegedly hired exotic dancers as part of an aggressive campaign to recruit new students, according to a civil complaint filed by the state of Florida. For-profit colleges like FastTrain often use techniques such as frequent telephone calls, rewards for referrals, and false promises. Many students who were recruited into FastTrain, however, are now stuck with student loans, without proper job preparation.
As a result of the same investigation, FastTrain was shut down following allegations that college officials fraudulently obtained government money by forging high school diplomas, coaching students to lie on forms, and falsifying attendance documentation. Although some students, such as those still enrolled at the time the school was shut down, are eligible to discharge their loans, the rest will not receive loan relief. As a result, more than 160 former students are in default on their student loans.
For-Profit Schools, Non-Dischargeable Debt Burden Students and Taxpayers
Unfortunately, student loan debt cannot be discharged in bankruptcy except in rare cases. This system, which was intended to lower the cost of borrowing by discouraging people from borrowing if they did not intend to pay, has resulted in a significant increase in loan rates. Some commentators believe that for-profit colleges like FastTrain are responsible for perverting the system: FastTrain’s source of profit was not the success of its alumni, but the receipt of government funds. Therefore, FastTrain was able to profit by focusing on recruitment and eligibility for funding, and remained unaffected when its former students could not find jobs or repay their debt.
Attempts at reform have yet to successfully reduce this issue, as one federal court denied a regulation that would have required schools like FastTrain to demonstrate that its alumni were able to find jobs, in order to continue receiving government funds. Currently, however, schools are not limited in what they can charge, and are not required to demonstrate a student’s ability to repay the funds.
In some cases, senators have demanded that students of failed for-profit universities be discharged of debt. Barring federal intervention, students will have to pursue other debt relief strategies, such as refinancing for private loans, or seeking reduction or dismissal of public loans as a result of disability, public service, or extreme undue hardship. Public loan payment plans can also be modified.
Your student loan debt won’t disappear with wishes or worrying. Contact a Miami debt relief attorney at the Law Office of Julia Kefalinos, Attorney, P.A. today for a consultation on your debt relief options. You may be able to seek discharge of your student loans or other debts, and develop a debt management plan suitable for your financial situation.