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Commonwealth Magazine: A check on bad student loan debt

Last year, federal education officials did something they almost never do: They wrote off more than $3 million in student loan debt belonging to nearly 500 students. Short of dying or paying them off, students almost never shed their college debt, even through bankruptcy. Yet the 500 students managed to convince the federal government that their loan providers had been duped into giving them the money illegally as part of a scheme by some colleges to take advantage of the federal government’s guaranteed loan program. … Toby Merrill, an attorney at the Legal Services Center of Harvard Law School who deals with predatory lending issues for low-income people, says the majority of clients she deals with on bad student loans fall under the category of not qualifying for loans because of a lack of a high school diploma. But even then, she says, a student has to jump through hoops to show they were approved to enter their school without the proper credentials.
“Very few people have all their loan documents,” says Merrill. “The burden is not just high, it’s wrongly placed. The department is skeptical of such applications and requires volumes of documentation. Your say-so as a student is not enough.”