Posts Tagged: ‘Pay As You Earn’

How changes to bankruptcy laws could affect your student loan debt

March 8, 2017 Posted by kingcade

Student loan debt continues to be a serious burden for many Americans, despite various repayment options available to borrowers.  Even with income-base repayment plans for federal student loans, borrowers who graduated in 2016 have an average of $37,172 in loans to repay over the course of their lifetime.

Recently, democratic lawmakers proposed changes to legislation that would provide student loan borrowers the ability to discharge their loans in bankruptcy. Under the current law, borrowers can only have their student loans discharged if they prove they have experienced an undue hardship, which is near impossible.

The proposed amendment would allow borrowers to include their student loan debt in a bankruptcy filing if the lender servicing the loan failed to offer a debt relief option. The federal government offers Pay As You Earn (PAYE), which gives borrowers the opportunity to cap student loan payments based on a percentage of their monthly income. After 20 years, the remaining balance of that borrower’s student loan debt is forgiven under the program.

If private student loan lenders did not offer a similar program to borrowers, student loan debt could be canceled or significantly reduced through bankruptcy, according to the proposed legislation.  Going a step further, some lawmakers have introduced changes that would allow student loan borrowers to include all education debt in their bankruptcy filing, even if a debt relief program similar to PAYE was offered directly by the lender.

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.

New York State Accepting Applications for Student Loan Debt Relief

January 8, 2016 Posted by kingcade

In an effort to help ease the burden of student loan debt on its residents, New York has started accepting student loan forgiveness applications from borrowers who attended college in the state this past year.

Governor Andrew Cuomo announced the state’s “Get On Your Feet” loan forgiveness program, which allows for up to 24 months of student loan debt relief to recent college graduates.  The Get On Your Feet program supplements the federal Pay As You Earn repayment program, and allows college graduates living in New York to pay nothing on their student loans the first two years out of school.  The program even goes a step further by paying its residents’ student loans for a maximum of 24 payments, equal to their monthly student loan payment amount.

“With this program, we are telling recent graduates: if you invest in New York’s future, we will invest in yours,” Cuomo stated.  Helping students pay for college is critical to ensuring their future success. Students struggling with student loan debt are less likely to start a small business or buy a home, and the consequences of defaulting on these loans can be devastating.

To qualify, applicants must have earned their degree from a college or university in New York no earlier than December 2014, have an adjusted gross income of less than $50,000 a year, and be enrolled in the Federal Income Based Repayment plan, Pay As You Earn.

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.

Paying off Student Loan Debt is about to get easier for 5 Million Borrowers

October 30, 2015 Posted by kingcade

The Obama administration has rolled out two new provisions that will give 5 million more college graduates the ability to enroll in income-based repayment plans and make it harder for schools to force students to use prepaid debit cards.

Here’s how it works…

More students can apply for income-based repayment plans.

The Education Department officially unveiled its long-awaited expansion of the income-based repayment program, Pay As You Earn (PAYE), which nearly four million federal direct loan borrowers are currently enrolled.   The new plan, which takes effect this December, is called REPAYE (the “RE” stands for “revised”) and will allow 5 million more federal student loan borrowers to enroll.

The new plan accomplishes this by allowing borrowers to sign up regardless of when they borrowed their loans or their debt-to-income ratio. The existing PAYE model is only available to people who borrowed after 2007 and whose debt greatly outweighs their income. Those enrolled in the REPAYE plan can have their payments capped at 10% of their income. Allowing the additional 5 million borrowers to qualify for the program will cost the federal government an estimated $15.4 billion over the next 10 years.

No more deceitful debit card agreements.

The government has been trying to crack down on prepaid debit cards on college campuses.  Thanks to the 2009 CARD Act, which stops banks from marketing credit cards on campuses, college credit card agreements have dropped by more than half between 2009 and 2013.

To get around this, the banks shifted their focus from credit cards to prepaid debit cards.  Today, 40% of students attend schools that have agreements with banks to market student debit and prepaid cards on campus, according to a report by the Government Accountability Office. These cards are known to come with high overdraft fees and other hidden fees.

The new Department of Education rule requires schools to allow students to choose how to receive their student aid refunds. They can no longer be forced or urged to open a certain kind of account to get that money.  The rule says schools have to make sure fees are not “excessive and confusing.”

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 of 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.