Fall 2006 77 Summer Street, 10th Fl. Boston, MA 02110 617 542-8010 Outlook www.nclc.org NATIONAL CONSUMER LAW CENTER NCLC Calls for Reform of Protecting Student Loan Programs Vulnerable According to a new report released by Consumers NCLC, the nation’s student loan system is in dire need of repair. “No Way Out: and Student Loans, Financial Distress, and the Promoting Need for Policy Reform,” describes a system that does not promote access to higher Marketplace education. Instead, the report paints a Justice picture of student loan borrowers in greater financial trouble than ever before and calls for major policy reforms to build a better, more equitable system. NATIONAL CONSUMER LAW Written by staff attorney Deanne Loonin, the report confirms that student loan debt is CENTER S “...there is no statute of limitations for student loans. The government can literally Deanne Loonin (right) met U.S. Senator Hillary Rodham Clinton Inside (D-NY) who has introduced a bill to help student borrowers pursue borrowers to the repay their school loans. Outlook grave.” - Deanne Loonin Student Loan Reform 1, 6 Cy Pres Supports rising at alarming rates as the cost of Sandler Challenge 3 financing our nation’s higher education California Initiative NCLC Updates Manuals 3 system falls increasingly on students and Established with two cy pres awards from their families. Debt levels for graduating Advocacy Update 4-5 college seniors with student loans have more attorney Robert Goldstein, NCLC has Building Campaign 5 than doubled over the past decade, rising launched the California Economic Justice Initiative, from $9,250 to $19,200. Defaulting on a an effort to help enforce the rights of low- Foreclosure Prevention 6 student loan can ruin a credit rating and income consumers in California by bolster- Older Consumers in Debt 7 cause long-term damage to a family’s ing the practice of consumer law in the finances. Calif. Cy Pres Initiative 1, 11 nation’s most populous state. NCLC Donors 8-9 As a legal matter, student loans are treated unlike credit card debts or other typical The initiative will make NCLC’s expertise New NCLC Staff 10-11 loans. “The government has extraordinary more widely available to attorneys Consumer Conference 12 powers to collect student loans, far beyond Continued on page 11 Continued on page 6 Fall 06 OUTLOOK Dear Colleagues: Deanne Loonin, Attorney The unbridled greed that is NCLC Staff Ava Morgenstern, Development fueling abusive credit practices Assistant NCLC in today’s marketplace is at an Carolyn Carter, Deputy Director for Willard P. Ogburn, Executive Partners’ all time high. But these abuses Advocacy Director Council are planting the seeds of Alys Cohen, DC Office, Attorney Debbie Parziale, Office Manager Leadership for NCLC enlightened reaction and with Eleanna Cruz, Administrative Assistant John Rao, Attorney concerted effort NCLC and Suzanne Cutler, Development Elizabeth Renuart, Attorney Chair: Bryan Kemnitzer like-minded organizations and Director Stuart Rossman, Director of Litigation Roy E. Barnes advocates can, and are, estab- Bernard E. Brown Nathan Day, Editorial Assistant Lauren Saunders, Managing Attorney, lishing new consumer protec- James L. Brown Charles Delbaum, Attorney tions. DC Office Elizabeth J. Cabraser Richard DuBois, Development Margot Saunders, Of Counsel Sheila Canavan Together, we face these market- Director Eric Secoy, Legal Editor Mark A. Chavez William H. Crowder place challenges and opportu- Shannon Halbrook, Publisher’s Jon Sheldon, Attorney Michael D. Donovan Assistant Stacy Smith, Customer Services nities with even greater Timothy E. Eble strength. The number of Charles Harak, Attorney Manager Cary L. Flitter consumer advocates is growing Megan Harrington, Publications Mallory SoRelle, Research Assistant Robert S. Green faster than ever. We gain Assistant Dorothy Tan, Legal Editor Kathleen E. Keest William M. Krieg power from that group dynamic Robert Hobbs, Deputy Director Diane Thompson, of Counsel and have a greater capacity to Robert I. Lax John Howat, Energy Advocate Tara Twomey, of Counsel Seth R. Lesser effect consumer justice and to Danijela Jankovic, Assistant to John Van Alst, DC Office, Attorney Michael P. Malakoff right consumer wrongs. Director of Finance Olivia Wein, DC Office, Attorney Daniel Mulligan John T. Murray Frances Jones, Administrative/ Shirlron Williams, DC Office, The challenges before the John Roddy Technical Assistant National Consumer Law Center Office Administrator Howard Rothbloom - and, indeed, all of us - are Margaret Kohler, Director of Finance Odette Williamson, Attorney James C. Sturdevant great and the possibilities Svetlana Ladan, Operations Manager Donna Wong, Publications Director exciting. That the Center Denise Lisio, Supervising Legal Editor Chi Chi Wu, Attorney approaches the future with more strength, greater exper- tise, and an exceptional staff, Outlook is in no small part a testimony OUTLOOK, a publication of the National Consumer Law to the support provided by its Center, is intended to inform friends - as colleagues in the HELP our supporters about the cause, in time and commit- NCLC make a difference Center’s advocacy and ment, in contributions of fundraising activities. money, and in cy pres awards. ___I enclose a check for $________ For additional information on ___I pledge a gift of $________payable over ____ years. NCLC or to be placed on the ___Please charge $________ to Visa/Mastercard On pages 8 and 9 we have listed OUTLOOK email list, write or #______________________________ expiration date_________ those of you who have made email: Signature______________________________________________ National Consumer Law Center financial contributions to the Name________________________________________________ OUTLOOK Center in the past year. Your Address______________________________________________ 77 Summer Street, 10th Fl. contributions are helping us ___________________________________________________ Boston, MA 02110 fight the gross predatory Please make your tax-deductible contribution payable to [email protected] practices of today and work National Consumer Law Center, Inc. 77 Summer Street, 10th Fl. toward a more equitable Boston, MA 02110 NATIONAL marketplace in the future. CONSUMER LAW Thank you. Or make a donation on our CENTER Willard P. Ogburn secure website, www.nclc.org S Executive Director 2 Fall 06 OUTLOOK Sandler Foundation Offers NCLC Updates Its Match If NCLC Raises $200K The Sandler Family Supporting Foundation has challenged us Legal Manuals and Foundation has issued a - and our supporters - in such a challenge to NCLC that offers manner. Thanks to the gen- our donors a chance to multiply erosity of our friends and Guides the impact of their contribu- colleagues, we’ve more than NCLC has just released the Summer 2006 Updates to eight of our tions. NCLC must raise met the challenge each time. legal manuals: $200,000 by the end of the year and the foundation will match “With additional help from our Consumer Class Actions (6th ed. 2006) with CD-Rom it with $100,000. The founda- supporters, old and new, we Consumer Warranty Law (3d ed. 2006) with CD-Rom tion will make a 50 percent expect to be equally successful Fair Debt Collection 2006 Supplement with CD-Rom match on a portion of a this time,” said Willard Ogburn, The Cost of Credit 2006 Supplement with CD-Rom donation or cy pres to NCLC NCLC’s executive director. Credit Discrimination 2006 Supplement with CD-Rom that is at least $5,000 greater Consumer Banking and Payments Law 2006 than the donor’s largest pre- For more information on Supplement with CD-Rom vious grant. meeting the challenge, contact Automobile Fraud 2006 Supplement with CD-Rom Suzanne Cutler at 617 542-8010. Access to Utility Service 2006 Supplement with CD- This is the fourth time the Rom; and Consumer Law in a Box July 2006 (Two CD-Rom Set). NCLC Feeds the Hungry We also now have available the following new guide books: NCLC Guide to Surviving Debt (2006 6th ed.). Now with new and expanded changes to credit reporting, student loans, and bankruptcy advice for consumers. NCLC Guide to the Rights of Utility Consumers (2006). Key advice on electric, gas, and other utility services: shut-off protections, rights to restore termi- nated service, bill payment options, weatherization tips, rights to government assistance, and more. Combating Foreclosure Rescue Scams: A Practice Guide with CD-Rom (2006). A detailed roadmap for legal advocates confronting scams that strip homeowners of their equity while failing to save their homes. For more information or to order visit www.consumerlaw.org or contact the NCLC Publications Department at (617) 542-9595, fax (617) 542-8028 or email [email protected]. Eleanna Cruz, NCLC administrative assistant, joined more than 20 of her Boston colleagues in an afternoon of volunteer work at the Greater Boston Food Bank. NCLC 24-7 Together, NCLC staffers sorted, hauled, and packed 7,800 pounds of food. On average each of our NCLC volunteers sorted 195 pounds of food and made possible 150 meals for men, women, and children in the Boston area who might www.nclc.org otherwise go hungry. Fall 06 OUTLOOK 3 Advocates egies were developed to protect The comments point out that borrowers. the Telephone Consumer Gather for High Protection Act explicitly NCLC’s Elizabeth Renuart, who prohibits the placing of Cost Credit spoke at the conference, said automatic dialed or pre- Forum that advocates were aware of the recorded calls to a cell phone challenges posed by high cost without the express consent of Advocates and community small lenders. “All the the person called. The Fair groups discussed ways to advocates in the room recognize Debt Collection Practices Act protect consumers from that the battles in each state restricts calls that result in predatory small loans at the will be fierce. But armed with charges to the consumer. day-long New England High the latest research and infor- Cost Credit Forum in Boston on mation on these predatory NCLC’s comments also cite the May 18. Organized by NCLC, industries, consumer protec- pervasive level of abuse in the Consumer Federation of tions can be preserved or debt collection business.