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Lawyers: GM seeks bankruptcy shield from lawsuit

By WTOP Staff

TOM KRISHER
AP Auto Writer

DETROIT (AP) — Lawyers for a Georgia family that is trying to reopen a wrongful death lawsuit against General Motors say the company is trying to move the case to federal court so it can use bankruptcy as a shield from the claim.

The lawyers, Lance Cooper and Jere Beasley, said Wednesday in a statement that GM’s court filings run counter to a promise made by GM CEO Mary Barra to fairly compensate families of people killed or those injured in crashes caused by defective ignition switches.

GM spokesman Greg Martin called the company’s filings procedural.

A federal bankruptcy judge in New York ruled in 2009 that the new GM is shielded from claims stemming from cars made before the company emerged from bankruptcy protection. Instead, the claims go against the old GM, which has limited assets. The judge now is being asked to decide if he will allow claims against the new company.

Cooper and Beasley say moving the case to federal court would allow the company to use the bankruptcy to send claims to the old GM.

Ken and Beth Melton sued GM three years ago in Cobb County, Georgia, in the death of their daughter, Brooke Melton, in 2010. The 29-year-old nurse died when her 2005 Chevrolet Cobalt skidded on a county road, hit another car and ended up in a creek.

The lawsuit alleged that Brooke Melton, a pediatric nurse, was killed after the Cobalt lost power due to a faulty ignition switch, causing her to lose control of the car. The Meltons settled the case last September, but Cooper and Beasley filed a lawsuit in May seeking to set aside the settlement and reopen the case, alleging that GM fraudulently concealed evidence.

Research by Cooper’s firm and depositions in the original lawsuit exposed a GM engineer’s move to fix the defective switches and conceal his actions.

GM ended up recalling 2.6 million older small cars starting in February to fix the switches, which the company says have caused 54 crashes and at least 13 deaths. GM acknowledged that it waited more than 10 years to recall the cars. A report from an outside attorney hired by GM blamed the delay on a dysfunctional corporate structure and misconduct or poor decisions by some employees. The attorney’s report also indicates that the Meltons’ case was settled for $5 million.

The case has brought investigations from Congress and the Justice Department. Also, GM has agreed to pay a $35 million fine to the government’s road safety agency. The automaker has hired attorney Kenneth Feinberg to come up with a method of compensating victims.

Feinberg said last week that a compensation plan is weeks away. So far, GM has announced or taken charges of $1.7 billion to cover the cost of the ignition switch and dozens of other recalls.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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