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Total Higher Education, a NorthStar loan program, may have breached its contract with student loan customers by raising their interest rates to cope with the credit crunch.
Investigation Source
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Student Loans
- Excessive Interest Rate
- Questionable Lending Practices
Product or Service
- Student Loan
Injury Type
- Monetary Loss
Investigation Details
This is an ongoing investigation which has led to a pending lawsuit against Total Higher Education.
Total Higher Education is owned by Northstar, one of the nation's largest student lenders, with a loan portfolio of $5 billion.
Upon graduating from college or graduate school programs, many students choose to consolidate their federal student loans with a single lender for convenience or to lock in a fixed rate. With hundreds of lenders to choose from, lenders compete for graduates’ business by offering them the opportunity to reduce the interest rates on their loan if certain conditions are met. Once a loan is consolidated with a certain lender, the student is ineligible to reconsolidate that loan with another lender.
Total Higher Education business model is predicated on providing borrowers with substantial reductions of their monthly payments. Total Higher Education is accused of breaking its contract after eliminating one of its key enticements for customers “T.H.E. Repayment Bonus,” a program that reduced borrowers’ interest payments by .75% if they were on-time with payments (no later than 59 days past due).
On February 18, 2008, Total Higher Education sent out a notice to student loan borrowers announcing it was temporarily suspending the program citing that the cost of financing has increased due to the credit crunch, despite the terms of their contract with student loan borrowers.
If you have a loan through Total Higher Education and have been on-time with your payments, we want to hear your story.
Total Higher Education is owned by Northstar, one of the nation's largest student lenders, with a loan portfolio of $5 billion.
Upon graduating from college or graduate school programs, many students choose to consolidate their federal student loans with a single lender for convenience or to lock in a fixed rate. With hundreds of lenders to choose from, lenders compete for graduates’ business by offering them the opportunity to reduce the interest rates on their loan if certain conditions are met. Once a loan is consolidated with a certain lender, the student is ineligible to reconsolidate that loan with another lender.
Total Higher Education business model is predicated on providing borrowers with substantial reductions of their monthly payments. Total Higher Education is accused of breaking its contract after eliminating one of its key enticements for customers “T.H.E. Repayment Bonus,” a program that reduced borrowers’ interest payments by .75% if they were on-time with payments (no later than 59 days past due).
On February 18, 2008, Total Higher Education sent out a notice to student loan borrowers announcing it was temporarily suspending the program citing that the cost of financing has increased due to the credit crunch, despite the terms of their contract with student loan borrowers.
If you have a loan through Total Higher Education and have been on-time with your payments, we want to hear your story.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| NorthStar Education Finance, Inc. | NorthStar Education Finance, Inc. issues asset-backed securities to fund the Total Higher Education (T.H.E.) Loan Programs. Effective May 21, 2009, NorthStar Education Finance, Inc. suspended its participation in the federal and private student loan programs through the T.H.E. Loan Program. NorthStar has originated and continues to hold more than $6 billion in student loans for borrowers across the country. |