Student Loans Archives - Page 7 of 31 - Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

Be on the Look-Out for These Student Loan Scams

Posted on October 7, 2019by Admin

More than 40 million borrowers are carrying an estimated $1.5 trillion in student loan debt. With that many individuals carrying student loan debt, it should come as no surprise that many scams are out there, hoping to take advantage of borrowers who are desperate to get out of debt quickly. Borrowers need to be aware of these debt relief scams in particular, which are now facing investigation by the Federal Trade Commission (FTC).

Student Loan Debt Elimination Scams

Many companies are out there offering the promise of eliminating student loan debt for borrowers who are desperate for a way out. However, if someone is offering a deal that sounds too good to be true, that is usually because it is, in fact, too good to be true. Many companies will promise to wipe away a person’s loans when they have no actual ability to do so. The fact of the matter is no one can promise student loan forgiveness or cancellation. Student loan borrowers can only ever receive forgiveness if they meet very specific conditions, and the fastest any borrower can receive loan forgiveness is five years. Even these forgiveness programs can be very difficult in terms of qualifications.

If the borrower has federal student loans, it should be noted that no student loan debt relief company can negotiate directly with the federal government to obtain lower rates on those loans. If a company promises the ability to negotiate a lower payment, this can normally only be done via an income-drive repayment plan, but most of these can be applied for directly by the borrower, not a third-party entity.

Debt Relief, student loan debt, Student Loans

FTC Takes Legal Action Against Corrupt Student Loan Debt Relief Companies

Posted on September 18, 2019by Admin

The case comes as a warning to student loan borrowers struggling with their debt and company’s looking to profit from it. The Federal Trade Commission is cracking down on two student loan debt relief operations and the financing company that assisted them. The complaint is alleging the companies charged illegal upfront fees, led consumers to believe the fees would go towards reducing their loan balances, and falsely promised to permanently lower and even eliminate their balances.

The FTC has also charged the companies with locking its customers into high-interest loans and paying their fees without making required disclosures. This caused their customers to sink further into debt.

Debt Relief, student loan debt, Student Loans, Timothy Kingcade Posts

Student Loan Debt Relief Scams to Watch Out For

Posted on August 29, 2019by Admin

Student loan debt is an issue for many Americans, and for a great number of them, the situation has become a desperate one. This fact could be why so many borrowers are falling prey to student loan debt relief scams.

It is estimated that the national total student loan debt is well over $1.5 trillion. The average student loan borrower in 2018 is carrying just shy of $30,000 in loan debt, according to Student Loan Hero. This figure only represents what the average undergraduate student owes. For a graduate or professional degree, the borrower may end up with student loan debt well into six figures. With this much debt, borrowers can be paying on their loans for decades, which is why many of them jump at the opportunity, when presented, to get some sort of relief on their debt. The problem is these “relief opportunities” end up being more trouble than they are worth.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

How to Discharge Student Loan Debt in Bankruptcy

Posted on August 27, 2019by Admin

When it comes to discharging debts in a bankruptcy case, student loan debt has traditionally been one of the most difficult debts to discharge. The fact that this debt can be so difficult to get rid of in a bankruptcy case has kept some consumers from filing for bankruptcy. The problem is it can be very difficult for a person who is in a financially tight situation to keep paying on this debt outside of bankruptcy. Student loan debt is oftentimes the largest debt a consumer carries, outside of their mortgage. If someone goes through bankruptcy only to continue being stuck with his or her student loan debt, that person may end up in the same financial situation, again.

Here is how to discharge student loan debt in bankruptcy.

Undue Hardship

Student loan debt can be discharged if the borrower can demonstrate that he or she would suffer an undue hardship if forced to pay back his or her student loans. However, bankruptcy courts do not have one set standard to guide them in determining what exactly qualifies as an undue hardship. The U.S. Bankruptcy Code does not give a clear definition for what undue hardship is, which could be why so many inconsistencies exist among bankruptcy courts. Some courts will only use the undue hardship test to grant full discharge of the loans while others will allow for partial discharge. Others view the test as an extremely difficult standard to meet while others may be more lenient. At the end of the day, if the borrower has a very low income or took the student loan out to attend a for-profit trade school, he or she may have a better chance to get the obligation discharged, although other factors will be considered, as well.

Bankruptcy Law, student loan debt, Student Loans

Bankruptcy: Finally An Option for Student Loan Debt?

Posted on August 1, 2019by Admin

Student loan debt is at an all-time high with 44 million Americans carrying outstanding amounts of the debt. It is currently estimated that $1.5 trillion is owed in student loan debt. With that many people graduating with student loans, it should come as no surprise that many of these borrowers eventually default.

Approximately 11 percent of student loan borrowers have defaulted or were delinquent on their loans by the end of 2018. For the most part, consumer debt, including credit card and medical debt, can be discharged in a bankruptcy case. Only a very select list of debt is not allowed to be discharged at the end of a bankruptcy case, including child support, alimony, criminal fines and certain overdue tax debt.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

Student Loan Borrowers Diagnosed with Cancer Still Waiting for Promised Relief

Posted on July 5, 2019by Admin

In September 2018, President Donald Trump signed a bill into law, allowing student loan borrowers who have been diagnosed with cancer to delay their federal student loan payments. This new law was created to allow these individuals to focus on their treatment and not their student loan obligations through the course of their medical treatment and six months afterward. However, just nine months after the law took effect, borrowers who have requested this deferment are still waiting for approval.

The delay seems to be due to the U.S. Department of Education not yet providing student loan providers that administer its federal student loan programs an official application through which qualifying borrowers can apply. While the law may be in effect, service providers have no way to implement it.

The Department of Education insists that they are taking steps towards resolving this problem and creating an application for the cancer deferment. However, many borrowers are questioning why this was not done previously. As of January 2019, the Department of Education asked that the Office of Management and Budget conduct an emergency review and approval of the cancer deferment form created.

The Department of Education is also requiring a 60-day comment period on the proposed form, which is delaying the process even further. With cancer patients, time is of the essence. Many consumer advocates question why the comment period was not shorted to 30 or even 15-days.

Student loan servicers are offering temporary forbearances for borrowers who are seeking the cancer deferment. However, forbearance does not stop interest from accruing on the debt while payments are paused. Deferment, on the other hand, puts payments on hold while pausing interest from accruing, as well.

Click here to read more on this story.

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.

student loan debt, Student Loans

Lawsuit Filed Against Betsy DeVos for Failure to Cancel Defrauded Students’ Debt

Posted on June 28, 2019by Admin

More than 150,000 student loan borrowers have filed a lawsuit against the U.S. Dept. of Education and Education Secretary Betsy DeVos alleging they are being deprived of student loan debt forgiveness they are rightfully entitled to. The lawsuit accuses the Department of Education of failing to implement an Obama-era regulation known as “borrower defense, ” which allows students to have their federal student loans cancelled if their school misled them or engaged in other misconduct.

The attorney representing the Plaintiffs in the case say, “The law is clear: Students who experienced fraud should not be required to pay back federal loans that should never have been made by the Department in the first place.”

Borrower Defense Applications continue to pour in, but it has been reported that the Dept. of Education has not approved or denied a claim since June 2018. The majority of the complaints concern “for-profit” schools, of which there are some 7,000 around the country, which take in around 15% of government financial aid.

Last year, a federal judge ruled that DeVos’ delays of the borrower defense protections were unlawful. Still, the agency continues to neglect the applications.

Click here to read more on this story.

Debt Relief, student loan debt, Student Loans, Uncategorized

$5.3 Million in Student Loan Debt Canceled as Part of the ITT Tech National Lawsuit Settlement

Posted on June 19, 2019by Admin

Hundreds of Pennsylvania students who attended the now-bankrupt ITT Technical Institute will receive $5.3 million in student loan debt relief as part of a national settlement. Pennsylvania Attorney General Josh Shaprio said 570 former ITT students will have their student loan debt canceled as part of a multi-state settlement.

“With the private student loan program that ITT and CUSO established, ITT Tech was able to take advantage of thousands of hardworking students who were simply trying to complete their education,” Shapiro said in a statement.

The national settlement provides $168 million for more than 18,000 students harmed by abusive lending practices. ITT Tech targeted “low income” students who could not afford to pay tuition out of pocket and relied on federal loans to pay for school, according the settlement. A coalition of 44 states reached a settlement with Student CU Connect CUSO LLC, which was managing the loans for ITT.

ITT Tech had more than 136 campuses in 38 states when it shut down in September 2016. This $600 million settlement cancels all the student loan debt owed to the school.

The agreement specifically deals with student borrowers who attended ITT Tech between the years 2006 and 2016. The settlement also returns $3 million to students who made payments on their loan to the school after the school’s parent company, ITT Educational declared bankruptcy in 2016.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

Possible Solutions to the Student Loan Debt Crisis

Posted on June 5, 2019by Admin

With more than $1.5 trillion in student loan debt owed nationwide, it can be safe to say that the student loan crisis has reached a breaking point. For lawmakers, one solution to bring change to this problem is allowing student loan debt to be discharged in bankruptcy court.

Another measure that has received a great deal of public support is Senator Elizabeth Warren’s proposal to completely wipe out the majority of America’s student loan debt through a loan forgiveness program. Her proposal has received support from other presidential hopefuls, including Senators Bernie Sanders, Kamala Harris, and Amy Klobuchar, as well as Representative Eric Swallwell, all of whom are co-sponsoring it.

Recently, the American Bankruptcy Institute’s recommendations to allow student loan debt to be discharged in bankruptcy were published.

The average college student graduates with about $30,000 in student loans. This number does not include those students who pursue a master’s or post-graduate degree. Many of those students end up owing six figures in student loan debt.

The burden these loans present to young graduates is intense and can even follow them into retirement. Outstanding student loan debt can affect a person’s job in 13 states. To keep up with loan payments, many borrowers have accumulated credit card debt, just to be able to afford basic living expenses.

Student loans, while not impossible to discharge in bankruptcy, are extremely difficult to eliminate in a Chapter 7 or Chapter 13 bankruptcy case. Other obligations may be eliminated at the end of the case, but the student loan ones will stay with the borrower even after other obligations are discharged.

Bankruptcy courts use the “undue hardship” test to determine whether a filer should have his or her student loan debt discharged, but no set standard has ever been made on what qualifies as an undue hardship, making it very difficult to ever receive relief. New bi-partisan legislation has been introduced and proposes regulations that ensure student loan debt is treated like other forms of consumer debt in bankruptcy, meaning it can be easier to discharge.

Without the ability to discharge the largest amount of debt many bankruptcy filers are carrying; these individuals will never be able to receive the fresh start bankruptcy is meant to give them. While this change may not completely solve the student loan crisis, many financial experts are hopeful it can be a catalyst for change.

Click here to read more on this story.

Bankruptcy Law, student loan debt, Student Loans

Senior Student Loan Debt a Growing Trend

Posted on May 24, 2019by Admin

We are all aware of the effects student loan debt has on the Millennial generation, but many are unaware of the effects it has had on the senior population. According to a recent CBS News Report, seniors account for a growing number of student loan borrowers. For seniors who fall behind on their student loan payments, the government can garnish their social security.

According to Forbes data, senior student loan debt has increased 71.5% in the last five years. To date, seniors ages 60 to 69 owe a total of $85.4 billion in student debt. The reasons behind the increase in debt:

Seniors who have taken out loans to go back to school to increase their job prospects;
Seniors who have taken out loans for their children or grandchildren to go to college or graduate school. Parent PLUS loans come with a fixed interest rate of 7.6%

Seniors can see their Social Security benefits garnished at a rate of 15% to pay off student loans in default, according to recent report from AARP. It also notes that in 2015 alone, almost 114,000 student debtors ages 50 and older had some of their Social Security benefits seized to repay overdue federal student loans, which are subject to garnishment. Many of these funds were seized from disability benefits, not Social Security benefits paid out beyond the age of 62.

Some options to consider for anyone struggling with student loan debt (including seniors) include: Income driven repayment plans, graduated payment plans, extended repayment plans or refinancing your student loan debt.

Click here to read more on this story.

For Florida seniors 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 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.