Student Loan Xpress, Inc. (SLX) has reached an agreement with the Commonwealth of Kentucky that will result in an estimated $3.6 million reduction in the loan obligations for students who attended a now bankrupt West Kentucky law school.The lender, SLX, engaged in bad behavior:
...the lender charged fees when it said it would not and required loan repayment when students were entitled to deferments because they were still in school. "There was an overall pattern of abuse by the lender that ignored federal and state consumer protection requirements and put students in a financial bind before they even started their careers.and now they will pay, by reducing each student's tuition by an average of $25K:
Students' loan indebtedness will not include any amounts for tuition and school fees for credits that were not transferred to another school; interest on the loans will be based on the reduced loan amounts and any capitalized interest will be removed from their loan accounts; and late fees for delinquent payments and certain loan fees will also be removed from borrowers' accounts.Each student's debt load will be reduced in light of the credits that they were unable to transfer to other schools. Frankly, what schools will they be permitted to transfer to? This school sought accreditation and was never successful. I guess that means they were never able to secure a fax machine. Why would the ABA accredit a school like that?
SLX's dealing in other schools are under investigation. It might be worth following if they are your lender.
I anticipate that more law schools will close down in the future and this type of scenario will play out more than a few times. Here's to foolish optimism.