Student Loans

student loan debt, Student Loans

Federal Appeals Court Issues Ruling, Allowing Remaining Student Loan Forgiveness to Move Forward after Pause

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Borrowers waiting to see if they could receive student loan forgiveness through the stalled Borrower Defense to Repayment settlement recently received a victory. A federal court of appeals has issued a ruling saying that student loan forgiveness and other debt relief under this program could proceed while the appeal is pending. This ruling affects over 200,000 borrowers.

The case in question is Sweet vs. Carolina. A federal district court ruled in February that the settlement relief involved in this case could proceed. The case involves a class action lawsuit led by thousands of student loan borrowers who were seeking relief from the Education Department. In the lawsuit, the borrowers alleged that the Department had illegally delayed or arbitrarily rejected hundreds of thousands of Borrower Defense to Repayment applications, unfairly blocking borrowers from receiving relief.

student loan debt, Student Loans

Biden Administration to Make Process Easier to Have Debt Discharged in Bankruptcy

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The road to having student loans forgiven in a bankruptcy case is certainly not an easy one, which is why so many borrowers forgo pursuing bankruptcy for fear that they will never be able to receive relief from their largest source of stress: their student loan debt. However, all of this could change very soon due to new guidelines issued by the Biden Administration.

In January 2023, the Justice Department updated the required attestation form that borrowers pursuing bankruptcy must complete before being able to seek a bankruptcy discharge of their federal student loan debt. The changes to the form include several modifications, including small changes as to how monthly household income is reported, instructions clarifying when a borrower needs to provide the court with additional information, and new questions looking for information on whether a school closure impacted the borrower’s ability to pay his or her student loans. The changes to guidelines also include more detailed information regarding the borrower’s student loan repayment history, including any consolidations made, deferments, or forbearances.

student loan debt, Student Loans

Supreme Court Hears Arguments on Student Loan Cancellation

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The U.S. Supreme Court will be hearing arguments this week over two legal challenges brought against President Biden’s student loan forgiveness plan. The decision from these challenges could make or break Biden’s overall plan for loan forgiveness, affecting tens of millions of American borrowers.

Since President Biden made his initial announcement regarding his loan forgiveness plan, his policy has faced six legal challenges. The two challenges before the high court now have consolidated these suits. One legal challenge has been brought by six states, including Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. The other challenge has been backed by the Job Creators Network Foundation, a conservative-based advocacy group.

student loan debt, Student Loans

The Supreme Court Prepares to Hear Legal Challenges to Biden’s Student Loan Forgiveness Program

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For many people with federal student loan debt, it has been approximately three years since they were obligated to make a payment on their loans. The pause on these payments started at the beginning of the COVID-19 pandemic and has continued since then, eight separate times. 

Another extension has been issued for this pause on payments after legal challenges were made regarding President Biden’s widespread student loan forgiveness program originally announced in August. To help borrowers who were anticipating help from this forgiveness, the government announced student loan debt bills from the federal government will not be collected formally for months. 

student loan debt, Student Loans

Biden Administration Creates New Path to Help with Student Loan Discharges

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The Biden administration has created new pathways for borrowers struggling to pay their federal student loans. These measures are giving cautious optimism to critics who say that financial relief is not available for those struggling with student loan debt.

The Departments of Justice and Education made an announcement regarding a new process that would allow bankruptcy borrowers to discharge their federal student loan debts. These departments stated this move will hopefully reduce what they call “unnecessarily burdensome and time-consuming” investigations.

student loan debt, Student Loans

$32 Billion in Student Loan Forgiveness Granted by Biden Administration: How to Apply

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The Biden administration approved a total of $32 billion in student loan forgiveness over the course of the last year. Here’s a quick overview of Biden’s recent student loan forgiveness plan announced this week:

    • $10,000 for federal student loan borrowers who didn’t receive Pell Grants (only applies to those earning less than $125,000 a year or couples earning less than $250,000 a year)
    • $20,000 for federal student loan borrowers who received Pell Grants.
student loan debt, Student Loans

Do You Qualify for Student Loan Relief?

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The subject of student loan debt has become a major topic of political discourse. While lawmakers have called for widespread student loan relief, a number of loan forgiveness programs have existed for several years.

One public method of student loan forgiveness is the Public Service Loan Forgiveness program (PSLF), although this program has come under fire in recent years. PSLF was created in 2007 with the purpose of helping borrowers working in nonprofit and governmental roles following graduation. If the borrower was able to pay consistently on his or her debt while working in a qualifying nonprofit or government job for ten years, making a total of 120 payments), the remaining debt would be forgiven.

student loan debt, Student Loans

Dispelling Myths about Private Student Loans and Bankruptcy

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Federal student loans often are not enough to cover the costs of attending a university. Many times, student borrowers need to seek additional sources of funding, including private student loans, to pay for the costs not covered by their federal student loans. Borrowers often operate under the misconception that, like federal student loans, these private loans are also not dischargeable in bankruptcy. In fact, many misconceptions exist surrounding private student loans and how they are handled in a consumer bankruptcy case.

One of the biggest of these misconceptions is that private student loans can be discharged in a bankruptcy case. While student loans are harder to discharge in bankruptcy, it is not impossible. With federal student loans, the bankruptcy filer must start a separate adversary proceeding where he or she needs to prove that paying these debts would present an undue hardship. However, private student loans are not always subject to this extra step in a bankruptcy case.