Better Protection from Student Loan Fraud Needed By Veterans and the Rest of Us


By Debbie Gregory.

Veterans, with their attractive and generous GI Bill education benefits have been targeted by predatory, for-profit colleges. Often times, they leave with a partial education, or if they do graduate, the diploma comes with a mountain of debt. And for some, they find out too late that their credits won’t transfer or they don’t qualify for the licenses they need.

Until it filed for bankruptcy in 2015, the Corinthian College group was a leader in student loan fraud. Federal authorities, as well as the California attorney general’s office have gone after Corinthian. California’s AG successfully obtained a judgment for more than a billion dollars due to deceptive advertising and unlawful lending practices, and the Federal Consumer Financial Protection Bureau obtained a 40 percent reduction in the private loans owed for tuition at Corinthian Colleges.

Additionally, the U.S. Department of Education discharged student loan debt for over 27,000 students who enrolled in one of Corinthian’s programs, and it has promised debt relief to 23,000 more former students seeking debt relief based on allegations of fraud.

ITT Tech was another for-profit that filed for bankruptcy, leaving more than 35,000 students in limbo when it closed.

Corinthian, like many other for-profit schools, used fine-print forced arbitration clauses in its student enrollment contracts to have any litigation against the school dismissed.

Education Secretary Betsy DeVos has not been able to secure loan relief to students.

Relief may be on the way in the form of a rule that requires schools taking federal aid to drop forced arbitration, allowing students to pursue fraud claims in court. But DeVos has delayed the rule and is considering reversing it.

Not all for-profit colleges are in favor of arbitration. The University of Phoenix has eliminated mandatory arbitration clauses in student-enrollment agreements. Greg Cappelli, CEO of University of Phoenix’s parent company said that the decision “is the right choice for all of our students.”

DeVry University has also eliminated mandatory arbitration clauses.

The Consumer Financial Protection Bureau has issued a new rule that restores the ability of students, service members and other consumers to band together in court when banks, student lenders and other financial companies act illegally.

Military Connection salutes and proudly serves veterans and service members in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve,  and their families.

Consumer Financial Protection Bureau: Military Connection

Military Connection: consumer financial protection bureau

By Debbie Gregory.

When leaving active duty, many servicemembers are unsure how to set a path to financial security. The Department of Defense’s Transition Assistance Program may offer assistnace with finding the right job and re-establishing a permanent residence, but may not provide a good financial management plan.

The Consumer Financial Protection Bureau (CFPB) has recently established a financial coaching program, with a goal to provide 60 financial coaches at job centers and nonprofits across the country to assist veterans free of charge.

In addition to the some 250,000 military personnel leaving active duty each year, the Financial Coaching Initiative also supports those who may have recently become unemployed. It’s estimated that 49.1 million people are living below the poverty line, and an additional 68 million are financially underserved. With this initiative, more of these vulnerable consumers may make better financial decisions and reach their financial goals.

The organizations hosting these financial coaches were selected by the CFPB after a nationwide search, in partnership with the Department of Labor. They plan to assist with resources for employment and training programs, especially to gain skills in growing industries.

The CFPB is a landmark agency whose sole mission is to protect consumers in the financial marketplace. Utilizing various authorities such as regulation, enforcement, market research, financial education, and the authority to deal directly with consumer complaints, the CFPB is working to restore trust in consumer financial products and services.

The Financial Coaching Initiative proudly states that it is the first program paid for by the CFPB’s Civil Penalty Fund. In a three year period, the FCI forecasts that it will served tens of thousands consumers.

“Having a trusted, well-informed financial coaches can increase your odds of financial success,” said CFPB Director Richard Cordray.

More information is available here.

Military Connection proudly serves those who serve in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve, Veterans and their families. We are the go-to site for Veteran Employment and information on Veteran education. provides Veterans with and Directory of Employers, a Job Board, information on the Post-9/11 GI Bill, and a blog that offers Veterans boundless information. Be sure to visit, the go-to site.

Consumer Financial Protection Bureau: Military Connection: by Debbie Gregory

Military Connection: Creditors Ordered to Repay $3M to Service Members


By Joe Silva

On April 20, 2015, the Consumer Financial Protection Bureau (CFPB) intervened against a creditor for charging hidden fees to service members.

The Fort Knox National Company and its subsidiary, Military Assistance Company (MAC), are alleged to have charged millions of dollars in hidden fees to service members over the course of several years.

Service members would set up allotment programs with MAC that would automatically transfer portions of their pay every payday into a pooled bank account that MAC controlled, and used to make automatic payments to creditors, including auto lenders and credit cards. For this service, MAC would charge monthly fees that were often between $3 and $5.

While this is a convenience for service members, MAC was alleged to have, on several occasions, continued to collect funds from a service member’s pay, even after a debt had been paid off. These excess funds collected into a residual balance that MAC would charge hidden fees against. These fees would slowly drain the service members’ bank accounts, many times without them noticing for several months.

As a Veteran, I can speak with the voice of some experience in this matter. I set up automatic payments during my time in the Navy, but was burned on my first deployment when I wasn’t paying attention to these accounts. During that deployment, one of my debts had been bought out by another major bank, and my automatic payments stopped going through, early into my deployment. I was welcomed home by six months-worth of unpaid bills. For my next two deployments, I kept better track of my finances (as much as I could), and I also gave my mother Limited Power of Attorney over my finances, to make sure that she could act on my behalf while I was deployed. I suggest that all service members look into appointing a spouse, parent or someone they absolutely trust with some form of power of attorney while they are deployed. To find out more about Power of Attorney Basics, please visit or see your command’s career counselor or admin department.

The CFPB alleges that between 2010 and 2014, MAC charged tens of thousands of service members with hidden fees of $100 or more, totaling over $3 million. The bureau alleges that MAC and Fort Knox National Company failed to clearly disclose key information about costs to their consumers, and failed to notify service members that it had charged fees.

The Fort Knox National Company and MAC have been ordered by the CFPB to provide $3.1 million in relief to the service members they overcharged. The Consent Order can be viewed at

Military service members volunteer and swear an oath to stand up for their country and protect it. For their dedication and sacrifice, many Americans are grateful to them. But unfortunately, there are many people who take advantage of service members. It is refreshing to see government agencies reciprocating the support of service members, and having their backs as well.

Military Connection proudly serves those who serve in the Army, Navy, Air Force, Marines, Coast Guard, Guard and Reserve, Veterans and their Families. We are the go to site for Veteran Employment and information on Veteran education. provides Veterans with and Directory of Employers, a Job Board, information on the Post-9/11 GI Bill, and a blog that offers Veterans boundless information. Be sure to visit, the go to site.

Military Connection: Creditors Ordered to Repay $3M to Service Members: By Joe Silva