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.  

Coronavirus, COVID-19, Debt Relief, student loan debt

New Legislation Provides Student Loan Forgiveness to Frontline Healthcare Workers

Healthcare workers on the frontlines are putting their lives at risk every day during the coronavirus (COVID-19) pandemic, which has many asking what can be done to financially help these dedicated individuals.

Rep. Carolyn Maloney (D-NY) plans to introduce new legislation that will do just that by forgiving outstanding student loan debt carried by these frontline healthcare workers. The legislation is titled The Student Debt Forgiveness for Frontline Health Care Workers Act. The hope behind this new legislation is that by forgiving student loan debt for these workers, a large financial burden will be lifted. Additionally, this incentive could possibly drive others to join the healthcare industry and continue the fight against COVID-19.

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

Senior Education Official Resigns, Calls for Massive Student Loan Debt Forgiveness

A senior official appointed by U.S. Department of Education Secretary Betsy DeVos has resigned, declaring the student loan system to be “fundamentally broken” and calling for the forgiveness of billions of dollars of student loan debt.

The official, A. Wayne Johnson, was appointed as the Chief Operating Officer of the Department of Education’s Office of Federal Student Aid. This office manages the country’s outstanding student loan debt, which stands at an estimated $1.6 trillion. During his tenure, Johnson worked in a role specifically dealing with managing how student loans are serviced.

student loan debt, Student Loans

100,000 Borrowers Rejected for Public Service Student Loan Forgiveness

Statistics have come out showing just how many borrowers who have applied for public service loan forgiveness have ended up being denied loan forgiveness.  It is estimated that more than 100,000 applicants have been rejected since the program began, which has many scratching their heads asking why so many borrowers are being rejected?

According to the U.S. Department of Education, as of June 30, 2019, 90,962 student loan borrowers submitted 110,729 applications for public service student loan forgiveness. Of these applications, a total of 102,051 have been processed while 8,677 remain pending. Only 1,216 of the over 102,000 applications submitted have been approved, leaving a total of 100,835 applications being rejected. These numbers mean that less than one percent of all applications have been approved.

Digging deeper into these numbers, only 845 borrowers have received a collective $52 million in public service student loan forgiveness. The average debt discharged is $61,592. Another 726 applications have been approved under the Temporary Expanded Public Service Loan Forgiveness Program, which has given an additional 681 borrowers relief. However, a large number are still left without any recourse or assistance.

The reasons why so many applicants are being rejected vary. Fifty-five percent of them were because the borrowers failed to make all the required qualifying payments while 24 percent of them were due to missing information. Another 15 percent reportedly did not include “eligible” loans. Two percent were rejected due to employment date discrepancies, and another two percent were because the employer listed was not an eligible employer under the program.

If these issues are discovered early on, they can be remedied fairly easily. However, problems arise when the borrower does not discover this fact until years into the program.

The Public Service Loan Forgiveness Program forgives federal student loans for borrowers who are full-time employees, working more than 30 hours per week, in an eligible federal, state, or local public service job or 501(c)(3) nonprofit job. The borrower needs to make 120 eligible on-time payments, as well. Over half of borrowers who were rejected failed to meet this specific requirement.

One of the requirements under the program is the borrower must complete the Employment Certification Form and submit it to the U.S. Department of Education whenever the person begins a job in public service, when he or she switches employers, and annually to ensure that the borrower is on track. Not submitting this certification form can result in the person not remaining on the right track to qualify for the program.

Additionally, borrowers must be enrolled in an income-based federal student loan repayment plan to qualify and must make 120 required payments while enrolled in this federal student loan repayment plan.  As these kinks get worked out, it is possible that the number of applicants who are approved for loan forgiveness will increase. At this time, however, the small amount that are being approved is less than encouraging.

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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

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

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.

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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, Student Loans, Timothy Kingcade Posts

99 Percent of Public Service Student Loan Forgiveness Applicants Rejected

According to recent U.S. Department of Education statistics, more than 99 percent of people who have applied for available public service student loan forgiveness have been rejected. As of December 31, 2018, it was reported that 65,500 total applications for the public service student loan forgiveness program had been submitted. However, of this total, 58,000 applications had been processed with the majority of them resulting in denials. An additional 7,200 applications were marked as pending.

The program’s requirements are complicated, and not well-explained to qualifying borrowers.  Approval requires more than simply working in public service. The Public Service Student Loan Forgiveness Program is offered through the federal government and requires the borrower work full-time, meaning more than 30 hours per week, in an eligible federal, state or local public service job. The borrower can also work for a 501(c)(3) nonprofit, so long as the position is a full-time, eligible one. The borrower must make 120 eligible on-time payments to qualify.

Several different reasons were given for these denials. Seventy-three percent of these rejected applications were denied due to the applicant not meeting the “program’s requirements.” These requirements could mean either the borrower did not have student loans that were eligible for forgiveness, did not have qualifying employment, or did not make the 120 consecutive required qualifying student loan payments. Another 25 percent of these student loan forgiveness applications were denied because the applications were incomplete or had missing information on the employment certification form.

The report indicated that only 610 applications for student loan forgiveness had been approved and that 338 borrowers had received a collective amount of $21.1 million in public service student loan forgiveness. Less than 0.5 percent of the applications submitted were successful.

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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

President Trump Plans to End Student Loan Debt Forgiveness Program

The White House has released President Trump’s budget proposal for 2020, and many of the cuts take aim at the student loan debt crisis. Here are some of the specific proposals, which could affect borrowers’ ability to pay off their student loan debt.

  • The end to public service loan forgiveness. According to Trump’s proposed budget, the Public Service Loan Forgiveness Program would be eliminated. The effects could adversely impact members of the U.S. Armed Forces, police officers, firefighters, first responders, prosecutors, public defenders, and other public servants.
  • A change to federal student loan repayment. The number of income-driven repayment plans would be reduced to just one. Current plans, such as PAYE and REPAYE, allow borrowers to repay their federal student loans based on income, family size and additional factors, and can result in student loan forgiveness.  The changes would favor undergraduate borrowers who typically earn less than graduate school student loan borrowers. Monthly student loan payments would be capped at 12.5% of income and after 15 years of monthly payments, any remaining student loan debt would be forgiven.  This is five years earlier then the current income-driven repayment options. Graduate student loan borrowers would see the opposite effect – a five year increase to student loan debt repayment before their loans are forgiven.
  • The end to subsidized student loans. Subsidized student loans has traditionally meant that the government pays the interest costs on federal student loans while borrowers are enrolled in school. The rationale behind eliminating these type loans is to save the federal government money by collecting additional interest.  This could result in the cost of a higher education being that much more expensive due to additional interest costs.

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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.

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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 Loans, Timothy Kingcade Posts

Disabled Veterans Eligible for Student Loan Forgiveness Still Paying

Many disabled veterans who are eligible for student loan forgiveness are still paying on their debt, according to a recent Freedom of Information Act (FOIA) request filed by the Veterans Education Success. The nonprofit group filed this FOIA request on behalf of veterans in June 2018.

According to the FOIA information, the U.S. Department of Education is still seeking repayment on over $1 billion in federal student loan debt from tens of thousands of veterans who are severely disabled and have been determined to be unable to work, thus making them eligible for student loan forgiveness.  Borrowers were reportedly notified of their potential eligibility in the mail and received a Total and Permanent Disability Discharge application.

Specifically, the Department of Education has identified approximately 40,000 veterans who could have their student loan debt cancelled due to a total and permanent disability discharge. Out of that number, 25,000 of these veterans are already in default on their student loans.

Some critics of the administration believe it is because the current leadership in the Department of Education is more interested in protecting the for-profit institutions out there than students, veterans and other individuals who arguably need the protection more.

Going through a default on your student loans is an extremely stressful process, and when the person defaulting on the obligation is unable to work, already living in poverty and likely suffering from physical and emotional conditions that are debilitating, the stress is compounded even more. A default can seriously hurt that person’s credit score and can also result in the government garnishing that person’s tax refunds and a portion of their Social Security benefits. If the person is already on a limited income, this can be devastating.

The Veterans Education Success and Vietnam Veterans of American are both asking that the Department of Education automatically discharge the debt for these veterans. The current requirement is that the disabled veteran must apply to have the debt cancelled. If he or she is not aware of this program, the Department will not identify that person as someone who is eligible, which is a likely reason for the high number of defaults.

A new tax code includes a provision that waives federal income taxes on any debt that includes forgiven student loan debt for disabled taxpayers. Disabled veterans would fall under this category. If you are a disabled veteran who is interested in learning more about student loan forgiveness, you are encouraged to visit disabilitydischarge.com. If you receive any information on student loan forgiveness for a fee, do not follow this information as it is likely a scam. This service is free and is provided by organizations, such as Veterans Education Success. To learn more email help@veteranseducationsuccess.org.

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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.