More than 3,000 former Corinthian College students can expect to see their student loan debt erased. This marks the first wave of debt relief in relation to the fall of the for-profit higher education chain. In the event that all Corinthian students seek relief, taxpayers can expect to be hit with a $3.2 billion bill.
Nearly 12,000 students have sought discharge of their college loan debt from the federal government. According to the Education Department, many students have claimed that their school has either closed down or they were misled about job prospects. Approximately 3,100 closed-school claims have already been approved, totaling around $40 million in student loans, the department said.
Ted Mitchell, Education Undersecretary stated that proper processing of the remaining claims will take some time, if it is done right. While these figures are unprecedented, these numbers only represent a fraction of the students who might qualify for debt relief. For many students, the relief cannot come fast enough as they struggle to make ends meet while paying their student loans.
Recently, more students are claiming to be victims of fraud and are actively submitting what is known as “borrower’s defense” claims. As of late last month, the majority of nearly 12,000 claims have been Corinthian-related. For the Department of Education, this situation ventures into new territory. Over the past 20 years, officials could recall only five borrower defense cases. Mitchell has been appointed as the department’s new “special master” for debt relief. Approximately 350,000 students have attended Corinthian schools over the past five years, which means there will be more claims to come.
The Obama administration has stepped in to curb the issues surrounding the for-profit college industry. The administration says that the for-profit industry relies too heavily on federal student loans and often misleads students. Investigators have discovered that Corinthian schools charged exorbitant fees and blatantly lied to their students about job prospects.
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.
Source:
http://www.columbian.com/news/2015/sep/06/college-student-debt-relief-could-hit-3-2b/