Student Loans Archives - Page 7 of 31

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.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Possible Changes Ahead for Student Loan Debt in Bankruptcy

Posted on May 16, 2019by Admin

Student loans have traditionally been very difficult for borrowers to discharge in bankruptcy, but this fact may soon change with legislation proposed this week in the U.S. Senate. Lawmakers have introduced a bill that would make it easier for student loan borrowers to cancel their debt in bankruptcy. The measure has been titled the “Student Borrower Bankruptcy Relief Act of 2019” and has the support of 14 Democrats, one Republican, and one Independent Senator.

This legislation marks the first time that the Senate has proposed giving student borrowers the ability to discharge their federal student loans.

The average student will end up taking out $33,310 in 2018 to attend college, according to data from the Institute for College Access & Success. The total amount of student loan debt in the country is approximately $1.5 trillion. It is estimated that the country’s student loan balance will reach $2 trillion by 2022. Financial experts believe that a significant portion of the total debt will never end up being repaid. In fact, more than one-fourth of all student loan borrowers are either in delinquency on their student loan debts or are in default.

For people carrying federal or private student loans, their debts can only be discharged in a bankruptcy case if they can prove that the loans pose an undue hardship. However, no definite test has ever been given on what qualifies as an undue hardship, leaving it as a matter of interpretation for the bankruptcy judge to decide.

Student loan advocates have called for Congress to force the U.S. Department of Education to establish clear rules on when student loan debt can be discharged in bankruptcy. Many argue that the interpretation of what is an undue hardship depends on that specific judge’s interpretation of the law, which can be very unfair to the borrower if the judge hearing his or her case happens to be tough on discharging certain debts.

By making it easier to discharge student loan debt in bankruptcy, it is a distinct possibility that lenders will be more willing to work with a borrower who is struggling to pay on his or her loans. If the borrower is not able to work out a payment plan with the lender, he or she should then have the option to discharge that debt just as easily as other debts in a bankruptcy case and receive a fresh financial start.

Click here to read more on this story.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, 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 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.

Source:

https://www.wsj.com/articles/lawmakers-plan-would-let-borrowers-cancel-student-loans-in-bankruptcy-11557440856

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Debt Can Affect Your Job in These 13 States

Posted on May 10, 2019by Admin

It is hard to believe that student loan debt can cost you your job. But in 13 states it is legal to revoke a professional license if the borrower defaults on their student loan debt. These states include:

Arkansas
California
Florida
Georgia
Hawaii
Iowa
Louisiana
Massachusetts
Minnesota
Mississippi
South Dakota
Tennessee
Texas

All of these states have laws on the books that make it possible for a professional license to be revoked in the event a borrower defaults on his or her student loans.

This situation puts borrowers at a distinct disadvantage in these states. After all, you need to be able to work to continue making student loan payments every month. However, if your professional license is revoked due to your student loan burden, how are you able to continue paying on your loans?

Many different professions require a license for a person to work in that specific career field. According to the National Conference of State Legislatures, approximately 25 percent of all U.S. workers need to hold a license to work in their field, including lawyers, doctors, nurses, teachers, and hair stylists. For many of these individuals, not only did they need to go through years of education to work in their profession, but they also had to obtain a license, which can be a difficult and expensive process. Without that license, they are not able to earn a living in their respective fields.

Recently, more than 100 Florida healthcare workers lost their licenses to practice medicine due to their inability to repay their student loans. If someone is struggling to pay his or her student loan obligations, it can often be beneficial to first reach out to the loan servicer to see if an arrangement can be made. For federal student loans, borrowers have the option of forbearance or deferment. However, this option can add thousands of dollars to the loan balance, as the interest will continue to accrue.

Bipartisan legislation was introduced last month in Congress that would prohibit states from taking these types of measures to penalize student loan borrowers who default on a federal student loan. Six states, including Alaska, Illinois, Kentucky, North Dakota, Virginia and Washington already have enacted laws that prohibit this practice.

Related Resources:

https://www.usnews.com/education/blogs/student-loan-ranger/articles/2019-04-10/these-states-could-revoke-your-professional-license-over-student-loan-debt

Bankruptcy Law, Debt Relief, Student Loans

Another Broken Promise to Student Loan Borrowers: Public Service Loan Forgiveness

Posted on May 8, 2019by Admin

Public Service Loan Forgiveness Program Proves Unforgiving for Borrowers

A program that was once promoted as a way for student loan borrowers to receive forgiveness for their student loans is now coming under fire after it has been discovered that 99 percent of its applicants have been rejected.

The Public Service Loan Forgiveness Program was created in 2007 and promised to cancel any remaining student debt for those who work government jobs or for non-profit organizations and have been making continuous payments on their student loans for 10 years. Many teachers, public defenders, Peace Corps workers, and law enforcement officers have applied for the student loan forgiveness offered by the program.

It is estimated that over 73,000 borrowers have applied for debt forgiveness as of March 31, 2019, according to data from the U.S. Department of Education. However, only 864 of these borrowers have had their loans forgiven. In fact, only one percent of all Public Service Loan Forgiveness (PSLF) applications submitted were approved for loan forgiveness. This rate of approval leaves borrowers frustrated and confused as to why they worked so hard to qualify for a program that is now failing them.

Consumer advocates claim that the legislation was poorly written while others claim that mismanagement by loan servicers has led to the issues these borrowers are now facing.

According to the breakdown from the U.S. Department of Education, 16 percent of the denials were due to the borrower having the wrong type of loan while 25 percent were due to information missing in the applications. In addition, 53 percent of applications were denied due to the borrower not making enough payments.

One of the major issues that borrowers are discovering is that while their loans are federally-guaranteed, they are actually privately owned. Many law schools have been accused of offering only private student loans in their financial-aid packages but not clarifying this fact to the borrower. Congress has fixed this issue by eliminating federally-guaranteed private loans as of 2010, but if you are a borrower who took out one of those loans before that time, this fact may hurt your chances of qualifying for the loan forgiveness.

Government officials have also been accused of not properly educating borrowers on the requirements of the program or publishing clear guidelines on which employers qualify as a public-service organization and which do not, another issue that has resulted in denials for many borrowers.

Click here to read more on this story.