The Trump administration recently repealed the Obama guidelines and instructed guarantee agencies to once again go after defaulters with big fees. Agencies had previously been charging fees of up to 18.5 percent when people defaulted on their student loans. However, in July 2015 the Obama administration issued a memo forbidding such practices as long as the borrower entered into the government’s loan rehabilitation program within 60 days of defaulting and started paying again.
The announcement came after a report was released that found a double-digit increase in defaults. It also came after Sen. Elizabeth Warren asked Education Secretary Betsy DeVos to keep the guidelines in place.
The loans that are affected by the changes are loans through the Federal Family Education Loan Program (FFEL) that were taken out before 2010. There are approximately seven million borrowers with $162 billion of outstanding debt in the FFEL program.
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 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.