student loan debt, Student Loans

Beware of this Student Loan Debt Relief Scam in 2021

Student loan borrowers look for ways to save on their loan payments, including having their loans forgiven. However, for the 10 million student loan borrowers who were part of the recent Navient settlement, they now find themselves at risk of falling prey to a new scam.  

This recent Navient settlement came as part of a student loan forgiveness lawsuit. Navient is one of the country’s largest student loan providers, and while the settlement does not necessarily affect how much each borrower owes, scammers are targeting borrowers, by offering false claims of debt forgiveness.  

It is important that borrowers recognize the signs of the student loan scam before falling prey to one of their tactics. Borrowers who have received scam calls report the caller requesting personal information from the borrower and asking for a fee upfront to officially transfer the debt from Navient to the Department of Education. The reason why these calls are so dangerous is these steps are normally the first ones taken as part of the settlement process, which gives them the hidden appearance of legitimacy. The problem is the caller is not associated with Navient or anyone connected to the company.  

Once the scammer has this information from the borrower, he or she explains that the fees need to be paid monthly, requesting credit card or bank account information from the caller so they can begin making regular withdrawals. Unfortunately, some callers have provided this information only to see later that their loan payments did not change at all through Navient.  

Navient has alerted customers that they will not be calling them personally to transfer the loan. They will also not be asking for financial information to make withdrawals over the phone. When a call is received for no apparent reason at all, the consumer should be extremely cautious with the communication.  

Further, if the borrower is interested in proceeding with loan forgiveness, such as through the Public Service Loan Forgiveness program, he or she should contact the loan servicer directly to receive more information. If the loans are federal student loans, the government contracts with just one servicer, FedLoans, and if the caller is mentioning any entity that does not sound familiar, immediately end the call.  

If a caller is contacted by one of these scammers and is not sure about the legitimacy of the call, he or she should ask for a call back number so that the individual can hang up and call the individual back. If the person on the other end of the phone disputes this request, this indicates a scam, as well. If the borrower is truly interested in learning more about loan forgiveness, he or she should contact the servicer directly or visit both Navient’s official site and the Federal Student Aid web site  

Please click here to read more.  

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. 

Debt Relief, student loan debt, Student Loans

Student Loan Changes on the Horizon in 2021

Changes are on the horizon for student loans in 2021. Student loan reform has been an issue discussed for years, if not decades, but several events that occurred in 2020 have pushed the issue to the forefront. The presidential election, the coronavirus (COVID-19) outbreak, and the current economic climate have all pushed lawmakers to realize that student loan reform is a very real issue, and one that requires immediate action. The following possible changes could be coming in the new year.  

Student Loan Cancellation 

A number of recent legislative proposals have brought up the idea of student loan forgiveness. One proposal was included in the Heroes Act stimulus package proposed by House Democrats. In the legislation, lawmakers proposed to cancel up to $10,000 in student loan debt for borrowers who could demonstrate that they were struggling financially. Unfortunately, even though the legislation moved forward to the Senate, this portion of the original bill was removed. Senators Elizabeth Warren (D-MA) and Chuck Schumer (D-MA) have proposed legislation that would cancel $50,000 in student loan debt for borrowers who earn less than $125,000 in annual income. Lawmakers have pushed on President Elect Joe Biden to make a statement as to whether he supports or does not support student loan cancellation. Biden has stated that he would not likely pursue an executive order to cancel student loans, but rather, he encouraged Congress to consider immediate cancellation of $10,000 of student loans across the board. However, the fate of this proposal hinges on whether Republicans will retain control over the Senate. If they do, it is unlikely that student loan cancellation will move forward. 

Deferment for Student Loan Payments 

COVID-19 legislation, namely the CARES Act, brought about a pause for all outstanding federal student loan payments. In March 2020, this legislation paused payments on federal student loans, stayed student loan debt collection on defaulted loans, and stopped interest from accruing on all federal student loans. The legislation was created to help borrowers who were struggling financially during the pandemic. This “pause” is expected to expire as of January 31, 2021 unless Congress introduces legislation to extend this measure.  Discussions have occurred regarding extending the forbearance period past January 31, but no decision has been made to date. How this proceeds could depend a great deal on COVID-19 numbers, the current unemployment rate, and the economy.   

Student Loans and Bankruptcy  

One major change that could be occurring in 2021 has to do with how student loans are handled in a consumer bankruptcy case. For the most part, student loans have been all but impossible to discharge in both Chapter 7 and Chapter 13 bankruptcy cases. Borrowers must file a separate case within the bankruptcy matter, naming the lender, and providing evidence of undue hardship on behalf of the borrower. Courts across the country have been inconsistent in how they have applied this test, leaving disparity across the board in how they are treated. However, a number of recent legal decisions have indicated that change could be come as to how loans are handled in bankruptcy cases. President Elect Biden has made statements indicating he would like to see student loans discharged in bankruptcy, and Congress also has bipartisan support for similar measures. If student loan cancellation does not occur, this may be the next viable path for student loan reform.    

Employer Paid Student Loans 

The idea of employer paid student loans has gained a lot of support. The CARES Act includes provisions that provide tax incentives for employers to assist their employees with repayment of their loans. Under the CARES Act, employers can make a maximum of $5,250 in tax-free payments towards student loans per employee. The legislation makes both private and federal student loans eligible for this benefit, so long as the payments go towards principal or interest on what is defined as a “qualified education loan.” Employers have the option of choosing either tuition assistance or student loan repayment, but they cannot choose both options. This legislation was set to expire at the end of 2020, but the new stimulus package passed by Congress shortly around Christmas extended the benefit through the end of 2025. 

Please click here to read more.   

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 Loan Bankruptcy: A Solution to the Student Loan Debt Crisis

With an estimated $1.6 trillion owed in student loan debt nationwide, it comes as no surprise that solving the student loan crisis has been at the forefront of most political campaigns in 2020. However, many argue that the solution to the problem is much simpler than just forgiving student loan debt. In fact, the answer to solving the student loan crisis could lie in the United States Bankruptcy Code.  

Traditionally, student loans have been all but impossible to discharge in either a Chapter 7 or Chapter 13 bankruptcy case. Since the creation of the Higher Education Act in 1965, Congress has continued to add rules that make discharging federal student loan debt more and more difficult in bankruptcy. In 2005, private student loans were added to the list of debts that were difficult to discharge in bankruptcy, regardless of how much the filer was struggling financially. 

student loan debt, Student Loans

Former For-Profit College Operator Settles Bankruptcy Case with Department of Education

A settlement was reached between former for-profit college operator, FCC Holdings Inc., and the U.S. Department of EducationThe $8 million settlement is part of the company’s bankruptcy case and signifies the end of years of legal battles 

FCC Holdings formerly operated 41 for-profit colleges under various names. Before filing for bankruptcy, FCC Holdings sold 14 of their for-profit colleges to another company, International Education Corporation (IEC). IEC still operates 11 of these campuses in Florida and Texas under the name of Florida Career Colleges.

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.

student loan debt

What Borrowers Should Know About Refinancing Student Loan Debt

If you are facing reduced income as the coronavirus spreads, keeping up with your bills may become increasingly challenging—especially if you are among the more than 43 million people in the US who have student loan debt.

Student loan borrowers regularly receive email advertisements regarding the possibility of saving money on their loans by refinancing their student loan debt. The possibility of saving thousands in student loan interest paid on the debt is tempting, but not every refinancing option is legitimate. However, for borrowers who are paying on loans with rather high interest rates, refinancing through a reputable source can be an excellent way to lower how much interest they pay in the end.

student loan debt, Student Loans

Keep Our Graduates Working Act Gathers Support in Florida

A new piece of legislation has been introduced in the Florida State Senate which would protect the professional licenses of student loan borrowers from being suspended or revoked in the event they fall into default on their loan obligations.

The measure is Senate Bill 356, also known as the “Keep Our Graduates Working Act.” The bill expressly prohibits a state authority from suspending or revoking an individual’s professional license, registration, permit or certificate due to the person falling into delinquency or default on his or her student loan obligations.

Debt Relief, student loan debt, Student Loans

An Alarming Number of Student Borrowers Have Made No Progress on their Loan Balances

A disturbing number of student loan borrowers who began their repayment plans between 2010 and 2012 have made little to no progress towards reducing the principal balance owed on their student loans. According to a recent report from Moody’s Investor Services, 49 percent of student loan borrowers whose loan repayment plans began during that time have made no progress. Even worse, many of them have seen their balances grow.

This problem could be due to several factors, including poor job prospects and low salaries in their first jobs after graduation. Depending on the degree pursued by each borrower, it can be difficult, if not impossible, to find a viable job that will allow the borrower to make appropriate payments to pay down their student loan debt.

Debt Relief, student loan debt, Student Loans

Changes Coming in 2020 for Student Loan Borrowers

Student loan debt has reached an all-time high in this country with an estimated $1.6 trillion owed nationwide. Student loan debt is a major issue being discussed in the 2020 presidential race, and it is also an issue being addressed in the current legislative session. The U.S. Department of Education is also considering changes for student lending. No matter how you look at it, major changes are coming in 2020 for student loan borrowers.

These changes come at the height of the student loan debt crisis. According to a recent study from Politico/Morning Consult, more than half of American consumers consider student loan debt to be a major problem facing the country. In fact, student loan debt has now surpassed both credit card and auto debt. With the average college graduate walking away with $30,000 in student loans, which is up from $10,000 in the 1990s.

student loan debt

Six-Figure Parent Loans and the True Cost of Parent PLUS Loans

Parents will often do anything they need to when it comes to their children, and for many parents, that means taking on student loans for them, on top of the ones they already have left over from their own college education. These loans are normally taken on in the form of Parent PLUS Loans, and can often end up being a struggle for the parent to pay off in the end.

The Parent PLUS program was introduced in the 1980s as a means of financial support for middle- and upper-income families to help pay for their children’s college expenses. Most of the time, parents in these income classes did not qualify for other financial assistance, but the Parent PLUS program allowed them to obtain financing while keeping their liquid assets. However, since that time, the program has also become more popular among lower-income families who may not be able to pay down the loans once they are taken so easily.