Student debt currently exceeds $1.4 trillion dollars and
affects more than 44 million borrowers. In North Carolina, more than 1 million people carry student debt. Of those borrowers, more than 17% are
currently in default, with average debts exceeding $34,000. The Consumer
Financial Transactions Clinic (“CFT Clinic”) at Carolina Law is turning its
attention this year to this student debt crisis.
Some of the statistics on student debt might be surprising.
News outlets report that older Americans (over age 60) are the fastest-growing
category of student debtors. In North Carolina, for example, there are more
than 87,000 borrowers over age 60 carrying student debt. Because they take on
larger debt and have lower incomes, women owe almost two-thirds of the total
United States student debt. And more than 40% of active duty servicemembers
carry student loan debt. Although there are federal protections for active duty
military, those benefits are not widely requested and servicemembers are
heavily recruited to high-cost low-yield for-profit institutions. Because
student debt is not dischargeable in bankruptcy, it has profound, often
intergenerational, effects on people’s lives. The CFT Clinic students are
studying these issues and working with the Self-Help Credit Union in Durham,
North Carolina and the Marine Corps Installations East Legal Assistance Office
at Camp Lejeune to decrease the information gap between lenders, servicers, and
borrowers and to figure out ways to best serve their employees, members, and
servicemembers. The Clinic, for example, is advising Self-Help on ways to
support and advise its employees regarding managing student debt.
CFT Clinic students are also taking on individual
representation of student borrowers. The student debt crisis in many ways
mimics the mortgage foreclosure crisis; experts have discovered that loan
servicers are not following the relevant regulations, borrowers are defaulting
on their loans, and debt relief scams are becoming more and more prevalent. The
CFT Clinic is pleased to take on some of those cases. We are currently
representing, for example, vulnerable borrowers who have fallen prey to
unscrupulous loan consolidation companies who have taken their money in
exchange for little or no assistance on their student debt, leaving them in
default and their credit in shambles.
We are lucky to partner with state and federal agencies,
accepting client referrals and hosting experts from the Consumer Financial
Protection Bureau, the North Carolina Attorney General’s Office, and the Marine
Corps Installations East in our classroom.
We are excited about this new undertaking!
Posted by Kate Sablosky Elengold on Thu. October 5, 2017 12:53 PM
Consumer Financial Transactions Clinic