If you have been following our blog, you are familiar with the charges the Federal Trade Commission (FTC) has brought against DeVry University for making spurious claims about its job placement rates for graduates. At issue is the methodology the institution used in determining the percentage of graduates employed. According to the FTC, the school included students whose employment did not result from having earned a DeVry degree. Those tallied were students employed before graduating from DeVry and those not employed in their field of study.
The problem with these deceptive accounting practices is that it encourages students to incur debt in order to earn a degree that may not be worth the time and tuition paid to earn college credits. Although students may struggle to obtain jobs they trained to fill, their inability to land a job does not forestall tuition payments from accumulating. For DeVry graduates, this economic situation is especially pressing because so many DeVry students applied for loans to attend the school. Crain's Chicago Business awarded DeVry University the dubious honor of being a top school for indebted students and graduates.
Faced with this bleak financial reality, many students attempt to reduce their loans by engaging the services of companies that promise debt relief. These companies offer to intercede on the students' behalf with student lenders but fail to follow through after receiving payment from the students. Having been enticed by promises of employment by DeVry, these students deplete their savings in their attempt to reduce their loans to DeVry.
According to the FTC, the number of reports of loan forgiveness scams has increased with the commission's filing charges against DeVry. Students who are seeking to discharge their debt are advised to do the following:
1. Visit the website for the Department of Education.
For those with federal loans, the agency's StudentAid.gov site contains information about loan forgiveness. Other programs highlighted on the site include repayment plans that are calibrated according to income.
2. Research the Defense To Repayment program.
Created in 1994, this program has gained the attention of many students who have enrolled in for-profit schools that have come under government scrutiny, such as Corinthian College. The program was designed to reimburse students swindled by an academic institution.
According to the Education Department's undersecretary, "Regardless of the cost, if anyone has been defrauded, they are entitled to this forgiveness and potential reimbursements of what they have already paid out." Interested students are advised to file a petition with the Department of Education.
3. Reach out to the company responsible for private loans.
While the loan service may not erase the student debt, a loan restructuring option may be available.
Those seeking debt forgiveness should not pay intermediaries for services before assistance is rendered. Legitimate operators request payment after reducing the loan. In many cases, the tasks completed could have been completed by the students themselves for free.