Tips For Refinancing Devry University With No Loan Consolidation
Devry University was recently sued by the New York State Department of Education for notifying the students it enrolls that federal funding is available to reduce or eliminate their student loans during an economic recession. As a result of the lawsuit, the university has decided to forgive some of the debt owed to the students. This is part of the agreement reached with the Department of Education.
The recent settlement requires Devry Education Group LLC and its affiliated companies to pay $2 million to settle internal revenue service claims and recover judgments against graduates who started their bachelor’s degree programs at Devry s New York- based campuses between July 2008 through September 2015. This settlement marks the second largest payment ever to the internal revenue service out of all its debt relief program agreements. The largest one to date is a $4 million debt reduction involving a college student’s Stafford loans.
According to the terms of the proposed settlement, the company will only pay the funds it recovers from the New York State Department of Education if it can prove its loss would have resulted in an undue financial gain due to the federal student loans that were provided to the institution. The Internal Revenue Service determined that this condition cannot be satisfied because the loss of financial gain would likely occur even if the settlement proceeds result in an actual loss for the institution. In order to be eligible for the federal stimulus plan, schools must be actively involved in providing financial aid to their students, and not simply accept passively as other institutions do. Under the terms of the proposal, Devry will have to hire outside counsel to represent the institution while it processes the agreement with the IRS.
The school also must close the account of its former graduates because of non-payment of loans after the agreement has been reached. A closed account indicates that Devry University has decided not to pursue a claim for the outstanding loan balance owed to it through the program. If no money is owed, then no payment is required from graduates who are still enrolled in the school. This is unlike most for-profit colleges which require graduates to start making payments immediately after they graduate. The IRS rules out the possibility of recovering money from closed accounts, but it is possible for a former employee to pursue the IRS to recover unpaid payroll taxes or late fees.
In response to mounting pressure from the federal trade commission, Devry University agreed to suspend all collection activities related to student loans issued by Citibank until the investigation into the matter is completed. Citibank is the second largest lender to help fund Devry University’s programs. Both Citibank and the federal government are involved in the settlement process. A spokesperson for Citibank confirmed the bank will monitor the status of the case closely and will work with any applicable regulators.
The investigation comes at a time when many higher education institutions are struggling to keep up with skyrocketing tuition costs. Student debt is one of the causes of the economic recession. President Barack Obama has released a $10 billion stimulus plan designed to help educational institutions to cope with the increased debt. Some schools have already announced plans to ease financial burdens via debt relief programs. If these efforts do not help alleviate the current problem, the president has said he will continue to take aggressive steps to help resolve it.
A former university student forgiveness program offered at the American College of Financial Administration has helped college graduates with adjustable rate mortgages avoid bankruptcy during hard economic times. It also offers loans with reduced interest rates to current students with perfect credit. These refinancing options could be worth much more to long-term debt holders than the immediate payoff that can come from the federal government’s federal student loan forgiveness program. In fact, experts agree that debt settlement may be more important to borrowers in the short term than refinancing.
If you need help getting your federal student loan forgiveness, contact the Consumer Financial Protection Bureau. They offer free information on how to protect yourself from deceptive and abusive lending practices. You can visit their website to learn more about refinancing and other solutions for your financial needs. You can also call or write them for more information.