Debt Relief, student loan debt

Loan Forgiveness Applications Stall at the U.S. Department of Education

Student Loan Forgiveness

More than 180,000 applications remain pending in the hands of the U.S. Dept of Education, leaving borrowers with little to no answers when it comes to their student loan forgiveness. This lack of progress has many borrowers feel that their chances of receiving any type of relief for their student loan debt is slipping away.

Last year, a federal judge ruled that the Department of Education’s delays in processing student loan forgiveness applications from borrowers who were defrauded through for-profit school lending schemes was illegal and in direct violation of federal law. The ruling supported claims that the Department was purposely ignoring borrowers seeking promised relief from their debt.

A number of ‘for-profit’ school students have reported their financial struggles after taking out student loans to attend these educational institutions. More than two-thirds of them reported that they are not able to get a mortgage or even a car loan after defaulting on their loans. Half of them have shared serious concerns regarding whether their debt will ever be cancelled. Many of them have delayed getting married or having children due to the weight of the debt. All of them reported that their lives were significantly worse now than before they went to school.

This problem comes as a result of the current administration’s handling of Obama regulations meant to help and protect student loan borrowers. It is reported that 200,000 people submitted applications since 2015 to have their student loans cancelled after they attended a fraudulent, for-profit school.

Due to this influx of complaints, the Obama administration issued a regulation in 2016 which created an easier process for borrowers to receive forgiveness for their loans. The rule was set to take effect in July 2017.  As soon as Donald Trump took office, it was reported that his appointed Education Secretary Betsy DeVos intentionally delayed the regulation. After an audit of the Department of Education was conducted in 2017, it was discovered that government staff in the Department had been instructed to not submit any applications for approval.

DeVos and Department officials insist that the agency is ready to process these claims. They argue that the litigation regarding the delays is what is holding up approval of pending claims. These statements, however, provide very little relief to borrowers who are now wondering when their loan forgiveness applications will be processed.

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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. There are ways to file for bankruptcy with student loan 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 McMaken 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 McMaken website at www.miamibankruptcy.com.

 

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