student loan debt, Student Loans

Biden Administration Cancels Additional $55.6 Million in Student Loan Debt

The Biden Administration canceled an additional $55.6 million in student loans for 1,800 students who were found to be victims of fraud. This additional amount brings the total amount of student loan debt cancelled by the Biden administration to $1.5 trillion. 

Since entering office, President Biden has made it his mission to stand up for the thousands of students who were taken advantage of by for-profit colleges. This most recent effort was focused on students who attended Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute. Previously, the administration had approved loan forgiveness for students who attended ITT Technical Institute, the American Career Institute and Corinthian College. This is the first time the Department of Education has approved loan forgiveness for students attending for-profit schools not including these three.  

Credit Card Debt

Which Debts Should You Pay First After Paying Off Your Credit Cards?

Credit card debt is not the only type of consumer debt people struggle with. Once this debt is paid off in full, it helps to have a plan on which debts to tackle next.

According to data from the Federal Reserve and TransUnion, American consumers paid off a total of $82.9 billion in credit card debt in 2020. Credit card balances continued to drop by $49 billion in the first quarter of 2021, which is the second-largest quarterly balance decline seen since 1999. Despite this fact, more than 20 million American consumers have their student loan debts in forbearance.  

For the most part, financial advisors recommend that consumers pay down any debts they have that carry the highest interest rates, which is why credit cards are usually the first focus. With stimulus programs still in place, providing extra income to consumers temporarily, many financial advisors argue a different theory should be followed. 

Instead of focusing on the debt with the highest interest rate, consumers should look at all their debts and consider other options, such as refinancing other debt sources to lower their interest rates or modify payments. Refinancing could be a possibility for unsecured personal loans, as well as for mortgage debt.  With lower interest rates, consumers are encouraged to take advantage of this opportunity to save money and lower monthly payments, making it easier to pay off debts in full. 

Once credit card debt is paid off, many financial advisors recommend that consumers focus next on paying off their car loans. A car loses its value significantly as soon as it is driven, which is why so many consumers find themselves owing more on the car loan than the vehicle is worth. The interest rates of car loans tend to be moderate to high, although not always as high as credit card debt, depending on the consumer. Many times, it is advisable to either sell the car and use the proceeds to pay off what is owed on the loan or to refinance the loan.   

Once personal loans, credit card debt, and car loans are paid off by the consumer, it may then be advisable to pay off outstanding federal student loans. Since payments and interest is paused on federal student loans until September 30, 2021. During this time, any payment will go towards principal and not interest rate. Paying down this debt will only help improve the consumer’s credit score. 

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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   

student loan debt, Student Loans

Facing a Broken Student Loan System Borrowers Set Hopes on New Reform Bill

The student loan system has been considered broken for quite some time, and while many reform efforts have been made to help improve the process, nothing has been successful thus far. However, a new student loan reform bill could signal meaningful change is on the way.

This reform bill focuses on how student loan debt is handled in bankruptcy. Traditionally, student loans are non-dischargeable in a personal bankruptcy case, unless a specific set of criteria are met. The “Consumer Bankruptcy Reform Act of 2020,” proposed by House Judiciary Committee Chairman Jerry Nadler (D-NY) and Senator Elizabeth Warren (D-MA) proposes a way to make this process easier, allowing more student loans to be discharged through personal bankruptcy. The bill addresses both Chapter 7 and Chapter 13 bankruptcy cases and proposes changing the current systems under each chapter by one system, entitled Chapter 10.  

Coronavirus, COVID-19, student loan debt, Student Loans

How Student Loan Borrowers Will Benefit from the Stimulus Bill

The recently passed $2.2 trillion stimulus bill provides several different forms of financial assistance for American consumers during the current coronavirus (COVID-19) crisis. The new bill also provides options for student loan borrowers who are struggling to keep up on their loan payments, which comes as good news for the over 44 million borrowers holding more than $1.5 trillion in outstanding student loan debt.

Borrowers who have federally owned student loans will not have to pay on their loans through at least September 30, including Parent PLUS Loans. This payment suspension will occur automatically and does not need to be requested by the borrower.

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.

Debt Relief, student loan debt, Student Loans

Recent Court Decision Sheds Light on the Deceptive Practices of Student Loan Service Providers

A recent Seventh Circuit court ruling is providing hope to many student loan borrowers who are finding themselves in a difficult financial situation due to the heavy burden of their debt. The Seventh Circuit has ruled that a student loan servicer may be liable for damages caused as a result of their promises to advise student loan borrowers on how to handle their financial situations, directing them into plans that only benefit the lenders and hurt borrowers in the long run.

The case at the center of it all is Nelson v. Great Lakes Higher Education,  which was a case brought by student borrower, Nicole Nelson. Nelson paid for her college education through federal student loans, which she began repaying in 2009. However, she soon found herself in a tough situation when her income dropped due to a job change two years later.

Debt Relief, student loan debt

Seniors Carrying as Much Student Loan Debt as Borrowers in Their 30s

The student loan debt crisis is at an all-time high, but it appears that when it comes to the age of the borrower, this type of debt does not discriminate. According to Experian, a review of student loan balances across different age categories showed that borrowers who were in their 30s and borrowers who were in their 60s carried around the same amount of student loan debt.

According to Experian, the average 30-year-old borrower owes $36,406 in student loan debt while the average 60-year-old borrower owes $35,637.

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

How to Discharge Student Loan Debt in Bankruptcy

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.

Debt Relief, student loan debt

Loan Forgiveness Applications Stall at the U.S. Department of Education

Student Loan Forgiveness

More than 180,000 applications remain pending in the hands of the U.S. Dept of Education, leaving borrowers with little to no answers when it comes to their student loan forgiveness. This lack of progress has many borrowers feel that their chances of receiving any type of relief for their student loan debt is slipping away.

Last year, a federal judge ruled that the Department of Education’s delays in processing student loan forgiveness applications from borrowers who were defrauded through for-profit school lending schemes was illegal and in direct violation of federal law. The ruling supported claims that the Department was purposely ignoring borrowers seeking promised relief from their debt.

student loan debt, Timothy Kingcade Posts

Teachers Sue U.S. Over Student Loans that Were Not Forgiven

The American Federation of Teachers has filed a lawsuit against the U.S. Department of Education on behalf of educators who argue that they have been wrongfully denied loan forgiveness under the federal public service loan forgiveness program.

The Public Service Loan Forgiveness program was created more than a decade ago to encourage young graduates to seek employment in a government job or in public service industries. While the pay in these types of jobs tends to be lower, the promise of having their federal student loans forgiven at the end of a ten-year period was created to entice them to apply for these positions.

Under the program, borrowers who work in certain public service professions, including law enforcement, nursing, and teaching, and who make payments consistently for ten years, can have their federal loans forgiven. It is estimated that more than one million borrowers have filed official paperwork to participate in the program. However, many of these borrowers are finding out that they suddenly do not qualify for forgiveness for one reason or another, including not carrying the correct type of loan.