Student Loans

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/

This past February, America’s first student debt strike took place when 15 former students of Corinthian Colleges Inc. joined forces. The students refused to pay their student loans, claiming that the degrees they had earned were worthless and the company had used fraudulent marketing and recruitment practices. Other students also joined the strike and soon organizations like the American Federation of Teachers and Jobs with Justice had endorsed the students’ cause.

In May, Corinthian filed for bankruptcy. Arne Duncan, Education Secretary discussed the debt relief plan for some former Corinthian students. According to Duncan, Corinthian brought the ethics of payday lending into higher education and preyed on vulnerable students, leaving them with debt they could never pay. In fact, a third of Corinthian students came from families that earned less than $10,000 per year.

For the strikers, this was a grand victory. However, many feel that the Education Department has not done enough to fully correct the situation. Unfortunately the department is not issuing a complete discharge of debt to all former Corinthian students, which means some students may be left out. To receive relief, most students will have to apply individually and will be required to furnish transcripts and other documents that may be difficult to obtain, since the campuses have shut down or been sold. They must also spell out what parts of a state law that Corinthian violated in their particular case.

For many of the students, this has proven to be complicated and confusing for them. The Education Department has not advised the students of their options and many Corinthian students are not even aware of the debt relief program. In a recent report by the New York Times, only 6% of students have asked for debt cancellation. It seems that the Department of Education does not want to cancel potentially millions of student loans, however many find it absolutely necessary.

This is not the first time Corinthian has come under fire. Corinthian has had a long history of past allegations against them. In 2014, the Education Department accused Everest College of lying to students about job placement rates and briefly cut off federal funding to Corinthian.  However, after the company said it could not survive even a few weeks without the public money, the Education Department continued funding Corinthian while they sought a buyer. That same year, the federal Consumer Financial Protection Bureau (CFPB) sued the company for operating a predatory lending scheme.

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.latimes.com/opinion/op-ed/la-oe-0623-taylor-corinthian-colleges-loans-20150623-story.html

 

Student loan debt in America has been a topic of concern for years and now it appears to have spiraled out of control. The government’s Department of Education is one of the largest money lenders in the country, with a $1.2 trillion portfolio of student debt. This figure rivals the entire loan business of mega-lender, JP Morgan Chase.

With so many Americans taking out student loans to help pay for college and graduate school, some are concerned as to how these loans are being handled. Contractors hired by the government have often mishandled payments or provided incorrect information, causing students to miss out on repayment programs that could have saved them money or protected them from defaulting on their loans

In 2015 alone, over 30,000 borrowers complained to the Consumer Financial Protection Bureau about servicers losing paperwork, giving inconsistent information or neglecting to advise them about their repayment options. A Georgia woman contacted her lender to ask about the Public Service Loan Forgiveness program, since she worked as a full-time professor at Kennesaw State University. She was told that she qualified for the program, yet for months her lender neglected to advise her of additional steps she needed to take in order to receive the aid.

President Obama plans to vastly improve America’s student loan system by allowing the government to lend directly to students, instead of issuing loans through the banks. In 2010, Obama declared that $60 billion was saved by ending the bank-based lending program. The president then channeled over half of these funds into Pell Grants for underprivileged students to attend college.

Americans are also concerned about whether the federal government is making money off student loans. While student loans offer lower interest rates than the typical bank loan, many feel that it is still a money-making business. Some federal loans have interest rates as high as 7% in addition to origination fees.  Borrower requirements for obtaining a federal loan are very lenient and applicants may receive up to the full cost of tuition, provided they have not recently defaulted on a loan, declared bankruptcy or have any other severe marks on their credit report within the last two years.

Earlier this year, Obama signed the Student Aid Bill of Rights, which outlined ways to improve the servicing of student loans. The department must create a new website that allows borrowers to file complaints and provide feedback about federal student lenders, servicers and collection agencies. It also must establish a central point of access for those who are repaying their federal student loans, so they may view their accounts and track their payments.

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.washingtonpost.com/business/economy/how-the-education-department-turned-into-a-massive-bank/2015/08/23/7618f2fa-1442-11e5-9ddc-e3353542100c_story.html

A recent study conducted by the Center for American Progress has revealed some shocking statistics regarding the largest graduate school beneficiaries within federal loan programs. It turns out many are not prestigious, accredited schools, but rather lower quality, for-profit universities. This is a cause of great concern for students who believe these lesser valued schools are accepting government funding, only to increase their own profits.

Of all the graduate student debt in our nation—totaling $6.6 billion, 20 universities account for almost one fifth of the debt. Furthermore, 10 of the 20 institutions are for-profit schools. Charging expensive tuitions while providing a poorly valued education, does not seem to stop these schools from offering loans to prospective students. The schools also exhibit very low standards for admission.  The only requirement seems to be money, which the universities are more than happy to provide (often through loans from the federal government).  As a result, the degrees student’s graduate with are barely worth the paper they are printed on.

The study shows that the largest borrower on the list is Walden University, with $756 million of borrowed funds disbursed to students last year. Owned by the for-profit education company Laureate Education, Walden University hardly has an academic reputation. Many of the schools are able to obtain such a large amount of funding by taking advantage of the law that governs student loans. The Higher Education Act allows graduate students to borrow far more than undergraduates, upwards of $50,000 per year. For-profit universities that mainly operate online, often encourage students to borrow larger amounts for graduate degrees instead of bachelor’s degrees.

The for-profit universities argue that they are offering education to those who are not served by mainstream universities. Still, many believe these schools provide “less than worthy” degrees to students, leaving them with enormous amounts of debt and little chance for employment in a competitive job market. The schools continue to draw students in with promises of a better future, when in reality, the government is offering subsidized loans for a mediocre education.

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.forbes.com/sites/stevensalzberg/2015/07/12/for-profit-colleges-encourage-huge-student-debt/

Last week, the Department of Education provided guidance on how it will deal with bankruptcy discharge requests for government backed student loan debt. The Department of Education hopes to provide a balance when collecting on student loans, taking possible undue hardship on the debtor into consideration.

The July 7th document has broken down the updated Undue Hardship Formula, which will be used to help the Department of Education find a suitable balance between collecting debts versus allowing debt to be discharged.

The following factors will be considered regarding undue hardship when it comes to the discharge of student loan debt:

• If a debtor has filed for bankruptcy;

• If a debtor asserts undue hardship due to physical or mental impairment;

• If a debtor is a veteran who is unemployable, as determined by the Department of Veterans Affairs;

• If a debtor is approaching retirement, taking into consideration the debtor’s age at the time student loans were borrowed;

• If a debtor’s health has significantly changed since the student loan debt was incurred;

• If significant time has elapsed since the debt was incurred;

• If a debtor’s expenses are reasonable, without unnecessary expenses to provide funds for student loan repayment;

• If a debtor had the mental and/or physical capacity to pursue discharge or aid;

While the Department of Education has provided guidance to clarify the process, developments are still underway.  If a debtor cannot discharge student loan debt as an undue hardship, there is still the opportunity to “agree to discharge of a portion of the amount owed.”

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.huffingtonpost.com/steve-rhode/department-of-education-r_1_b_7753076.html