Universities Sue Students Over Defaulted Perkins Loans

[Fire Walk With Me]

http://www.huffingtonpost.com/2013/02/05/universities-sue-students-loans_n_2625457.html

Several major universities are taking former students to court in an attempt to collect on past-due bills under the Perkins student loan program.

George Washington University, Yale University and the University of Pennsylvania have all filed lawsuits against students who defaulted on their Perkins loan repayments, Bloomberg reports.

Yale spokesman Tom Conroy told Bloomberg that the school was required by federal law to collect unpaid Perkins money and that accounts that are at least 120 days past due could be sent to a collection agency. Penn's associate vice president, Michelle Brown-Nevers, told the news service that the school tries "all practices possible" before going to court. Penn filed at least a dozen Perkins suits last year.

Temple University is also going after unpaid loans and tuition, using the same debt collections attorney who's representing Penn in these suits, the Daily Pennsylvanian reports.

(More at the link.)

[villager]

1. So if the students are broke, can the courts throw out the loans?

Since, after all, the option of declaring bankruptcy in these circumstances was stripped away, to help out our friends, the banks.

[upaloopa]

2. I think you should not have to repay until you are

financially able to.
I think the student is not a deadbeat.
Also at no increase in interest or penalties.

[villager]

3. Would agree entirely. Just wondering if the court aspect could (hopefully) backfire

...on the loan-holders.

There is no way for the student to declare bankruptcy or settle for a lower, more reasonable amount.

And yet, once that loan is dragged into court, the court could -- theoretically -- make such adjustments/arrangements, no?