student loan debt, Student Loans

Baby Boomers and Higher-Income Earners Carry Largest Amount of Student Loan Debt

Student loan debt affects more than 44 million Americans, a collective $1.67 trillion in outstanding student loans.  Members of the Baby Boomer generation owe the largest portion of student loan debt, as well as borrowers who earn higher incomes. 

According to a recent study by Fidelity, that surveyed 250,000 outstanding student loans, Baby Boomers owed 33 percent (33%) more debt in 2020 than they did in 2019. The biggest reason for this increase has to do with the number of Baby Boomers who took out Parent Plus loans to help their children and grandchildren attend college.  

student loan debt, Student Loans

A New Loophole for Certain Kinds of Private Student Loans

Student loan debt has traditionally been extremely difficult to discharge in consumer bankruptcy cases. For those consumers struggling with insurmountable student loan debt, the ability to seek a fresh start through a bankruptcy case has been impossible for this reason. Even if they are able to successfully discharge most of their debts, they still walk away with a significant amount of  student loan debt, including both federal and private student loans. A new loophole could change this fact for borrowers who are struggling to pay their private student loan debts.  

A staggering 45 million American consumers owe a collective $1.5 trillion in student loan debt. Over one million borrowers defaulted on their student loan debt annually. The only method available to these borrowers to discharge their loans in bankruptcy is to meet the “undue hardship” test. Unfortunately, courts view this exception very narrowly and not all courts apply the test uniformly.

student loan debt, Student Loans

ITT Tech Student Loan Lender Must Pay $330 Million in Debt Relief to Former Students

An agreement has been reached between the attorneys general from 43 states and the now-closed ITT Technical Institute (ITT Tech). This agreement was part of a lawsuit brought by former ITT Tech students, requesting approximately $330 million in student loan forgiveness for 43,000 loans.

This lawsuit was a joint legal effort brought on by the Consumer Financial Protection Bureau (CFPB) and 43 different states. The settlement was made with PEAKS Trust, a private lending institution that is run by ITT and is also affiliated with several Deutsche Bank entities.

student loan debt, Student Loans

Half a Million Borrowers Petition President Trump to Have Their Student Loan Debt Cancelled

More than half a million student loan borrowers have signed a petition posted on Change.org, asking that President Trump sign an executive order that would effectively cancel all federally held student loans. This request makes up around 85 percent of all outstanding student loan debt.

The creator of the petition and founder of student loan advocacy group, StudentLoanJustice.org, Alan Collinge, stated he created this petition as he believes this would be the least expensive way, as well as the most effective way, to bring in trillions of dollars into the national economy. During a time of global pandemic, where the economy has taken a hit, he believes this would be the best way to give the economy a boost.

student loan debt, Student Loans

Bankruptcy Court Discharges $200,000 in Private Student Loan Debt for Colorado Couple

A major victory was scored for student loan borrowers after a U.S. Court of Appeals for the Tenth Circuit issued a ruling stating that a Colorado couple’s private student loan debt could be discharged in their personal bankruptcy case. The ruling allowed $200,000 of private student loan debt to be wiped out, breaking the long-standing stigma that student loan debt, particularly private student loan debt, is near impossible to discharge in a bankruptcy case.

The Colorado couple had taken out $200,000 in private student loans from Navient, one of the nation’s largest student loan issuers. The ruling comes after a similar bankruptcy case, where the borrower also had their student loan debt discharged. In that case, the loan servicer appealed the ruling.

Credit Card Debt, Debt Relief, Medical Debt, student loan debt

Tips for Managing Student Loans, Medical Debt, Credit Cards and More

DMP - Debt Management Plan acronym, business concept background

Consumer debt encompasses several different categories. However, many people often struggle with the same few categories, mainly student loans, medical debt, and credit card debt. It helps to know how to attack the debt individually in each category if a consumer is looking to pay down their various debts.

Student Loan Debt

If you are struggling with student loan debt, you’re not alone. In fact, it has been reported that Americans carry over $1.5 trillion in student loan debt. This figure amounts to an average individual load of $32,731 per student. If the consumer proceeds towards a master’s degree or professional degree following graduation from undergraduate studies, that amount can get into six figures. Paying down that debt can be a struggle for many, especially during recent times. Currently, the federal government has issued a forbearance on all federal student loan debt during the COVID-19 crisis, which has been extended past September 30.

student loan debt, Student Loans

What Borrowers Need to Know About the New Executive Order- “Continued Student Loan Payment Relief During the COVID-19 Pandemic”

A new executive order signed by President Trump is expected to give additional relief to student loan borrowers during the coronavirus (COVID-19) pandemic. It is important that all student loan borrowers be aware of what these changes entail and how they can affect their outstanding student loan balances.

At the start of the COVID-19 pandemic, Congress passed the CARES Act, a $2.2 trillion stimulus bill, that included relief effort for numerous aspects of the economy. The CARES Act paused all federal student loan payments and stopped interest from being incurred on federal student loans. Additionally, the stimulus bill put a stop to all federal student loan collection efforts. However, this bill was passed at the beginning of the pandemic with the thought that relief would no longer be needed through the end of 2020 with the hopes that the COVID-19 crisis would eventually be subsiding. Given the fact that numbers of positive cases are growing, and states are struggling to manage the crisis, it has quickly become clear that additional relief was needed. The original relief offered through the CARES Act was set to expire on September 30, 2020.

student loan debt, Student Loans

5 Anticipated Student Loan Changes on the Horizon

Student loan debt has become a hot topic in Congress and on the 2020 presidential campaign. The current COVID-19 crisis further highlighted the issue, which has student loan experts anticipating several potential changes when it comes to student loan debt.

Temporary Pause for Payments

One of the more immediate changes comes with the federal stimulus package, the Coronavirus Aid, Relief, & Economic Security Act (CARES Act). This $2.2 trillion stimulus bill offered many different benefits, one of them being a pause for all payments due on federal student loans. This temporary stop is set to last through September 30, 2020. In addition, interest will not accrue on outstanding federal student loans during this period. However, this coverage only includes loans serviced directly by the federal government and not by private providers. If borrowers have loans that were originally federal but later consolidated through a private entity, no immediate pause will occur on these debts. This fact has not stopped many states from working out arrangements with student loan servicers to include private student loans in the temporary relief. Given the fact that the COVID-19 pandemic seems to be holding on, this forbearance period could potentially extend beyond September 30, 2020. The Heroes Act has already included a provision to extend the forbearance by one year, but it is not decided yet whether the extension will occur.

Debt Collection, student loan debt, Student Loans

How the Supreme Court’s Recent Decision Affects Student Loan Debt Collection

A recent U.S. Supreme Court decision has implications for how student loan debts will be collected.  This week, the court issued a 6-3 ruling that debt collectors collecting on government-owned debts cannot do so by robocalling mobile devices.

The ruling came from Barr v. American Association of Political Consultants, a case involving a 1991 law banning the federal government from using robocalls to collect on debts. Specifically, the case was brought after a 2015 revision was made by Congress to the 1991 that allowed a distinct group of creditors to collect on government-owned debts, including defaulted federal student loans.

Debt Relief, student loan debt, Student Loans

President Trump Vetoes Student Loan Forgiveness Bill

A recent move by President Trump has student loan borrowers, as well as Veteran’s and Consumer groups, concerned and disheartened after he sided with Education Secretary Betsy DeVos and vetoed the bipartisan Borrower Defense to Repayment legislation.

The Borrower Defense to Repayment program is a student loan forgiveness program that was created during the Obama administration as part of an effort to provide debt relief for students who were taken advantage of by predatory colleges and for-profit universities.  Many of the borrowers who fell prey to these predatory tactics were veterans.