student loan debt, Student Loans

Biden Administration Cancels Almost $10 Billion in Student Loan Debt. Who Got Relief?

In total, the Department of Education has approved discharging $8.7 billion in student loan debt for more than 450,000 borrowers.

Click here to see if you are eligible.

That amount has included:

  • $7.1 billion for borrowers who were eligible for relief because of “total and permanent disability.”
  • $55.6 million in loan discharges for students who attended three trade schools that officials said misrepresented themselves to students.
  • Another $1 billion for other students defrauded by their schools.

The Biden Administration has cancelled nearly $10 billion in student loan debt since January 2021, according to the U.S. Department of Education. The Department reported they have approved $9.5 billion in student loan discharges since January 2021, affecting approximately 563,000 borrowers.  This has given borrowers the ability to tackle other debts, invest and increase savings.

student loan debt, Student Loans

Former ITT Tech Students Receive Debt Relief from Biden Administration

The U.S. Department of Education announced Wednesday that 18,000 former ITT Technical Institute students who were found to be defrauded by the shuttered for-profit university will have their federal student loans cancelled in full. This move is a step in the right direction. The for-profit school closed permanently in 2016, leaving tens of thousands of students with massive student loan debt, and no degree.  

More than 30,000 former students petitioned the Department of Education to cancel their debt under the “borrower defense to repayment law.” However, even after being defrauded by ITT Tech, their claims were denied by officials under the Trump administration.  

student loan debt, Student Loans

ITT Tech Student Loan Lender Must Pay $330 Million in Debt Relief to Former Students

An agreement has been reached between the attorneys general from 43 states and the now-closed ITT Technical Institute (ITT Tech). This agreement was part of a lawsuit brought by former ITT Tech students, requesting approximately $330 million in student loan forgiveness for 43,000 loans.

This lawsuit was a joint legal effort brought on by the Consumer Financial Protection Bureau (CFPB) and 43 different states. The settlement was made with PEAKS Trust, a private lending institution that is run by ITT and is also affiliated with several Deutsche Bank entities.

Debt Relief, student loan debt, Student Loans

President Trump Vetoes Student Loan Forgiveness Bill

A recent move by President Trump has student loan borrowers, as well as Veteran’s and Consumer groups, concerned and disheartened after he sided with Education Secretary Betsy DeVos and vetoed the bipartisan Borrower Defense to Repayment legislation.

The Borrower Defense to Repayment program is a student loan forgiveness program that was created during the Obama administration as part of an effort to provide debt relief for students who were taken advantage of by predatory colleges and for-profit universities.  Many of the borrowers who fell prey to these predatory tactics were veterans.

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

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.

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.

Bankruptcy Law

Bankruptcy Judge Grants $600 Million Settlement to Former ITT Tech Students

A major victory was won against for-profit educational institutions that have been accused of predatory lending practices. A federal bankruptcy judge in Indianapolis gave final approval to a $600 million settlement that will affect about 750,000 former students of ITT Technical Institute.

The now-defunct institution was once based in a suburb of Indianapolis, Carmel, Indiana. The school had over 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 paid payments on their loan to the school after the school’s parent company, ITT Educational declared bankruptcy in 2016.

After the school closed in 2016, students filed claims against ITT Educational and ITT Tech, alleging that they were subject to “systemic unfair and deceptive practices” by the school. The class of students argued that ITT violated consumer protection laws and also were in violation of breach of contract.

This settlement agreement may wipe out the debt that was owed directly to ITT, the issue of federal and private student loans that ITT students took out to pay tuition still exists. Only 33 of the former ITT students have been granted federal student loan cancellation. This number pales in comparison to the 13,000 borrowers who are unable to pay their student loan debt and have applied for cancellation.

However, despite this fact, proponents of student loan reform practices praise the settlement and believe that it has done more for students who fell prey to the predatory tactics of for-profit schools like ITT Tech.

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.

 

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

Bankruptcy Court Settlement Could Bring $600 Million in Student Loan Debt Relief to ITT Students

Students who attended ITT Technical Institute could have $600 million in student loan debt canceled under a new proposed court settlement. The settlement acknowledges that students who attended the college between 2006 and 2016 have a $1.5 billion claim against ITT.  This means that if any money is left over from the school’s assets after its bankruptcy, students could receive a portion of it.

Since ITT abruptly closed its nearly 140 campuses nationwide and declared bankruptcy in the fall of 2016, students have been desperate to seek financial relief.  Nationwide, ITT Tech had an estimated 35,000 students enrolled in classes.

Last January, a group of students led by the Harvard project, filed a lawsuit claiming that they had a right to ITT’s remaining assets, like any other creditor in a bankruptcy case. They claimed that ITT employed aggressive tactics to recruit them.  After recruitment, the students’ allege they were deceived or misled on multiple fronts.  This deception included the cost of attendance, the school’s accreditation status, the experience of instructors, and the likelihood of job placement and salaries they would earn after graduation.

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. 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, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Most Student Loan Fraud Claims Involve For-Profits, according to recent study

An analysis of Education Department data reveals that students who attended for-profit colleges filed more than 98 percent of the requests for student loan forgiveness alleging fraud by their schools.  Century Foundation found nearly 100,000 loan forgiveness claims (known as borrower defense to repayment) have been received over the past two decades, which paints a troubling picture of the state of for-profit higher education in the United States.

The study found “a disproportionate concentration of predatory behavior among for-profit colleges” that raises “serious concerns about the federal government’s current approach to providing relief to students who have been defrauded and misled.”

For-profit colleges expanded rapidly over the past two decades, with enrollment rising from around 230,000 in the early 1990s to a record 2 million in 2010. These for-profit schools recruited aggressively, targeting more “non-traditional” students, usually older people who had jobs and could only study part time.

They also heavily targeted women, people of color and veterans. But after graduating, many students struggled to find jobs they were promised or had difficulty transferring credits to other schools.  This lead to a massive increase in student loan defaults.  A 2010 government study found that all of the 15 for-profit colleges evaluated by undercover agents made deceptive statements to prospective students and four of them encouraged fraudulent practices.

The report comes as Education Secretary Betsy DeVos faces criticism for not moving forward with two Obama-era regulations that would have added protections for student borrowers.  The rules, known as borrower defense to repayment, were developed after a series of high-profile collapses of for-profit chains such as Corinthian Colleges and ITT Technical Institute left thousands of students with worthless degrees and mountains of student loan debt.  The regulations were scheduled to take effect on June 30.

However, the review of tens of thousands of claims has stalled and the AP reported last month that the department is considering abandoning the practice of full loan cancellation in favor of partial forgiveness.  Student advocates are pointing to the Trump administration’s ties to the for-profit industry and accuse DeVos of putting industry over students.

Click here 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. 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, Credit, Student Loans, Timothy Kingcade Posts

Education Secretary Sued for Delaying Rules Protecting Student Loan Borrowers

Education Secretary Betsy DeVos is being sued by eighteen states for allegedly delaying new federal regulations designed to protect student loan borrowers from being scammed by for-profit colleges and other schools.  The rules, known as borrower defense to repayment, were developed after a series of high-profile collapses of for-profit chains such as Corinthian Colleges and ITT Technical Institute left thousands of students with worthless degrees and mountains of student loan debt.  The regulations were developed by the Obama administration and scheduled to take effect on June 30.

Last month DeVos delayed the implementation and launched an effort to rewrite the rules, arguing they were putting taxpayers at risk for “significant costs.” The lawsuit, filed by attorneys general from 18 states plus the District of Columbia, said DeVos’ violated the Administrative Procedures Act because she did not satisfy the standards for a delay, and failed to give the proper notice or offer the public time to comment.

“These rules served as critical protections against predatory for-profit schools that exploit hard-working students–students who are simply trying to invest in their own education and future,” said New York Attorney General Eric Schneiderman, who also was among those filing the suit.

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. 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.

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

SEC Settles Fraud Charges against ITT Technical Institute

The fraud case has been settled against ITT Technical Institute, but the Securities Exchange Commission continues to pursue top executives from the college for deceiving investors about the high rates of late payments and the number of defaults on student loans backed by the company.

ITT executives assured investors in conference calls that the programs were performing well when in fact the company was making secret payments on the delinquent accounts to delay defaults, according to the complaint.

ITT Technical Institute ended its operations in September, shutting down 137 campuses after the U.S. Department of Education cut off access to federal loans and grants and threatened to pull the school’s accreditation amid mounting lawsuits and investigations.  The company filed for bankruptcy protection, leaving 35,000 students with worthless degrees and many with high interest student loan debt.

The student loan programs are what is at the heart of the SEC lawsuit.  ITT created two in-house student loan programs.  To get investors to finance the programs, the company offered a guarantee to limit the risk of students not repaying the debt.  According to the complaint, if a certain percentage of loans defaulted, the company agreed to cover the principal, interest and fees.

The SEC said investors did not have accurate information about the performance of the debt because ITT kept the loan programs off its balance sheets.  Regulators said executives failed to tell investors that the company was facing $30 million in guarantee obligation payments at the end of 2012 and used accounting tricks to cover up the numbers.

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. 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.