Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Ads Promote Fake ‘Obama Student Loan Forgiveness’

If you have student loan debt, you have probably already seen the advertisements online promoting “Obama’s New Loan Forgiveness Program.”  Companies are charging borrowers upfront fees for services they can receive for free from the Department of Education.

Nine percent of student loan borrowers have used debt-relief companies, according to a recent survey by borrower advocacy group Student Debt Crisis and personal finance website NerdWallet. These consumers paid an average of $613 for income-based repayment plans and loan consolidation that they could have received at no cost from the federal government, the survey found. Sixty-five percent said the services did not improve their financial situation.

The Consumer Finance Protection Bureau has shut down three companies and the Department of Education has sent cease-and-desist letters to five just this year.

The Obama administration did expand repayment options for federal student-loan borrowers. In 2012, the Department of Education offered the “Pay-as-you-Earn” plan that reduced monthly payments to 10 percent of a borrower’s discretionary income, which was lower than the 15 percent required under the original income-based repayment plan.

Last year, an update was made to the plan, giving more than 1.6 borrowers more affordable student loan repayment options entitled, “The Revised Pay-as-you-Earn” plan. The percentage of borrowers enrolled in income-based repayment plans has quadrupled over the past four years from 5 percent in 2012 to nearly 20 percent in 2016.

The Department of Education offers four income-based repayment options for federal student loans. To enroll in any one of these plans, borrowers must complete an application from their loan servicer or online at to verify their income.

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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