Posts Tagged: ‘Bankruptcy Protection for Student Loan Borrowers’

Student Loan Debt Forgiveness Signed into Law in New Jersey

December 7, 2016 Posted by kingcade

Governor Chris Christie signed a bill into law this week that will eliminate student loan debt in the event of death and total disability, and allow for deferment of payments and interest accumulation for those who are temporarily disabled.

The change comes after an investigation into the case of a mother who was forced to continue paying her son’s student loans after his senseless murder.  It brought to light New Jersey’s punitive lending practices.  The bill’s sponsors in the lower house called its success a victory for students and parental co-signers who could have been left with insurmountable debt after a tragedy.

The primary sponsor of the bill, State Assemblyman Vince Mazzeo, made the following statement:

“Imagine you’re a family who always pays their bills, has good credit and then you lose a child and in the midst of your grief, you’re saddled with tens, if not hundreds, of thousands of dollars in their remaining student loan debt,” Mazzeo wrote.  “That’s just something we can’t allow to happen on our watch.”

Fellow sponsor Andrew Zwicker also praised the change.

“To expect a student’s family or other survivors to pay their college loan debt in the event of their death is cruel and unacceptable.  We can do better than that,” Zwicker wrote.

New Jersey’s Higher Education Student Assistance Authority (HESAA) will now be obligated to forgive those debts.  In cases of permanent or temporary disability, borrowers will have to provide a written statement from their physician attesting to their condition.

Unlike other states, New Jersey does not allow for payments to be adjusted by income and charges higher interest rates than similar federal programs. The state can also garnish a borrower’s wages for non-payment and revoke professional licenses without court approval.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Four Ways President Trump Could Affect Your Student Loans

November 16, 2016 Posted by kingcade

President-elect Donald Trump has plans to address student debt and college affordability, but many of the details remain unclear.  Trump and the Republican Party did not emphasize higher education in their campaign platforms and any changes to the current federal student loan system would require congressional backing.

Here’s what we may be able to expect:

  1. Income-driven repayment changes are likely. According to Trump’s proposed student loan program, he would cap repayment at 12.5% of a borrower’s income. He did not indicate whether this repayment cap would apply to all federal loan borrowers or only for those who apply for income-driven repayment, as is the current standard.
  2. Private Banks may begin issuing federal student loans. Trump wants to restore a system where private banks issue federal student loans as opposed to the government.  This was a process that occurred up until 2010, when the federal government revamped the program and began originating all federal student loans through its Direct Loan program.  The Obama administration cited billions of dollars in cost savings as a result of the switch, and used the savings to offer more Pell Grants for low-income students.
  3. Students’ prospective earnings could dictate their ‘loan worthiness.’ Trump wants to let colleges have a say in lending decisions and make them share the risk of student borrowing with lenders.  It would be up to colleges and banks to decide together which students could take out student loans.
  4. College costs could be reduced by limiting the ‘administrative bloat.’ Trump said in an October speech that he would take steps to cut tuition costs.  In that same speech he said he planned to reduce the tremendous ‘bloat’ in college administration.  By reducing the unnecessary costs of compliance with federal regulations, colleges would be able to pass the savings along to their students.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:

http://www.latimes.com/business/la-fi-trump-student-loans-20161111-story.html

 

More than half of all student loan borrowers have seen scams

September 15, 2016 Posted by kingcade

Approximately 60% of more than 6,300 student loan borrowers surveyed said they have seen scams for advertisements promising relief from their student loan payments. Nearly 45% of the respondents said at least one of these companies reached out to them directly, according to the survey conducted by the personal finance site NerdWallet, and student loan advocacy group, Student Debt Crisis.

These predatory companies offer to help borrowers with their student loan payments for a fee, but typically provide services borrowers can access from the government for free- or sometimes they provide nothing at all.   The more than 40 million student loan borrowers with $1.3 trillion in student loan debt has become a vulnerable part of the population.

In response to borrowers’ struggles, the Obama administration has gone to great lengths to expand the assistance programs borrowers can use to manage their debt.  But scammers have used these programs as an opportunity to lure borrowers, advertising their services with government logos and phrases like “Obama student loan help.”

About 9% of the survey respondents said they paid for student debt relief services, spending an average of $613. The Consumer Financial Protection Bureau has taken legal action, accusing various student loan debt relief companies of deceiving borrowers into paying for services they can get for free from the government and keeping borrowers on the hook for a repeating charge illegally.

Consumer advocates say the prevalence of these student loan debt relief scams is reminiscent of the mortgage crisis, where servicers failed to provide homeowners with necessary information and scammers targeted a vulnerable portion of the population.

The Department of Education is taking action and working on revamping the student loan servicing system, giving servicers more of an incentive to work with borrowers, and repay their loans through one government-branded portal.  By fixing the current system, borrowers will not be as tempted to turn to these predatory companies.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources: http://www.bbb.org/wisconsin/news-events/bbb-scam-alerts/2015/04/bbb-alert-con-artists-are-targeting-student-loan-holders

New Jersey Student Loan Agency Instructs Staff Not to Tell Borrowers About Help Unless They Ask

August 2, 2016 Posted by kingcade

New Jersey has the largest state-based student loan program in the country. However, the terms of the loans offered through the program are particularly harsh and can lead to financial hardship.

Recently, internal emails from the staff at Higher Education Student Assistance Authority were released where employees were instructed not to tell families that they may qualify for loan forgiveness unless they ask.

The email sent to staff members in May 2016 from a supervisor said, “Families of deceased borrowers (or surviving cosigners) must inquire if HESAA has a policy on loan forgiveness. We should not be volunteering this information.”

The agency’s chief of staff, Marcia Karrow, released a statement that said the emails “do not accurately reflect the Authority’s policy or practice on loan forgiveness.” However, Karrow did not provide any proof that management had corrected the instructions that were sent out by email.

According to HESAA, they have helped 35 out of 50 cosigners or co-borrowers who have requested assistance after a borrower died or became disabled over the past four years.

The same company released a statement directly following Superstorm Sandy in 2012 stating that borrowers’ credit ratings would not be affected if they made a late payment. Instead, the agency only erased late payment reports if a borrower requested it.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Obama Administration Unveils NEW Student Loan Forgiveness Program

June 17, 2016 Posted by kingcade

This week, the Obama administration announced new guidelines for the forgiveness of certain student loans.  The program would forgive student loan debt for those borrowers who were the victims of scams perpetrated by for-profit colleges that used fraudulent or illegal practices to convince students to enroll.  While there are already federal laws in place for this, these new guidelines would make it easier to apply for this type of forgiveness.

If finalized, the new program would go into effect in July 2017. Under the new plan, borrowers would be able to ask for debt forgiveness if they can prove one of the following:

  • The school had a court judgement against it;
  • The school breached their contract with the student;
  • The school made a “substantial misrepresentation” about their offerings, graduate job prospects or the debt the student would accrue.

Under the new proposal, students would be able to request debt forgiveness up to six years following their discovery of the school’s wrongdoing, an increase from the current two-year limit.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.