Tag: student loan relief

student loan debt, Student Loans

Navient Student Loan Settlement Focuses on Delinquent Borrowers

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A settlement has been reached as of January 13, 2022, involving student loan servicing company, Navient, and approximately 400,000 student loan borrowers. This settlement provides some much-needed debt relief to hundreds of thousands of delinquent borrowers.

The lawsuit alleges that Navient encouraged student loan borrowers who were behind on their loan payments to enter into costly long-term forbearance programs that kept them in debt. Additionally, borrowers alleged that Navient likewise encouraged them to take on private loans which the borrowers were not able to pay back. To hold the loan servicing company accountable, lawsuits were filed by several states and were joined by 39 attorneys general.

The settlement specifically focuses on student borrowers who took out loans to attend for-profit colleges between the years 2002 and 2014. In the settlement, Navient said they will cancel $1.7 billion in private student loan debt for approximately 66,000 borrowers. In addition, they said they would pay $95 million in restitution for 350,000 federal student loan borrowers.

The goal of this settlement and the reason behind the lawsuit is to prevent predatory lending practices is accused of doing to borrowers.  The lawsuit claimed that Navient encouraged borrowers who were not able to make their loan payments to enter forbearance programs instead of income-drive repayment plans. While forbearance programs do help borrowers in a temporary bind, they end up being much costlier in the long run and can often push the borrower even deeper into debt. Investigations into Navient practices found that employees in the call center were pushed to recommend borrowers go into forbearance programs instead of recommending programs that would be much better for the borrower’s financial situation.

Another predatory practice found through investigations into Navient’s practices involved pushing borrowers to apply for subprime private student loans even knowing that the borrowers had low credit and a high likelihood that they would not be able to repay the private loans.  Most students who took out these private loans were attending for-profit institutions. However, under federal law, school tuition payments must be at least 90 percent federally funded, therefore making the schools more dependent on federal funding instead of private.

Navient adamantly denied the claims in the lawsuit. They stated the settlement was entered into to avoid financial burden and time in litigation.

Borrowers who are eligible for debt cancellation under the settlement include those who took out private subprime student loans between 2002 and 2014. These loans were mostly taken out through Navient’s predecessor, Sallie Mae. Loan cancellation is available for borrowers who were behind on their private loan payments for at least seven consecutive months prior to June 30, 2021. If a borrower was current on his or her loan obligations, that person would not be eligible for cancellation.

In addition, borrowers who received a non-subprime private student loan to attend a for-profit educational institution listed specifically in the settlement, including DeVry University and University of Phoenix, are also eligible for debt cancellation.

Debt cancellation will be available for borrowers from 38 states and the Washington D. C., who took out federal loans through Navient and were in forbearance for at least two years between 2009 and 2017.

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

Freeze on Student Loan Payments Extended Through September 2021

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The U.S. Department of Education has placed a pause on student loan payments through September 2021. This is among the 17 executive actions President Biden has signed since taking office. This Order, along with the extension on eviction and foreclosure moratoriums, are an effort to relieve the economic impact caused by the coronavirus pandemic. Prior to the Order, payments were scheduled to resume at the end of January.

Student loan debt continues to be a national crisis, as debt tops more than $1.6 trillion. What was once a looming financial crisis, has now been exacerbated by job losses and pay cuts caused by the pandemic. Approximately 1 in every 5 student loan borrowers are in default, according to the U.S. Department of Education. Many are struggling to pay for basic necessities and provide for their families. With the extension of the forbearance agreement, borrowers will not be forced to decide between paying their student loans and putting food on the table.

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

Student Loan Borrowers Diagnosed with Cancer Still Waiting for Promised Relief

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In September 2018, President Donald Trump signed a bill into law, allowing student loan borrowers who have been diagnosed with cancer to delay their federal student loan payments. This new law was created to allow these individuals to focus on their treatment and not their student loan obligations through the course of their medical treatment and six months afterward. However, just nine months after the law took effect, borrowers who have requested this deferment are still waiting for approval.

The delay seems to be due to the U.S. Department of Education not yet providing student loan providers that administer its federal student loan programs an official application through which qualifying borrowers can apply. While the law may be in effect, service providers have no way to implement it.

The Department of Education insists that they are taking steps towards resolving this problem and creating an application for the cancer deferment. However, many borrowers are questioning why this was not done previously. As of January 2019, the Department of Education asked that the Office of Management and Budget conduct an emergency review and approval of the cancer deferment form created.

The Department of Education is also requiring a 60-day comment period on the proposed form, which is delaying the process even further. With cancer patients, time is of the essence. Many consumer advocates question why the comment period was not shorted to 30 or even 15-days.

Student loan servicers are offering temporary forbearances for borrowers who are seeking the cancer deferment. However, forbearance does not stop interest from accruing on the debt while payments are paused. Deferment, on the other hand, puts payments on hold while pausing interest from accruing, as well.

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, Credit, Timothy Kingcade Posts

The Student Loan Borrower’s Bill of Rights Explained

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Following President Obama’s introduction of the “Student Aid Bill of Rights” the Senate followed suit by reintroducing the Student Loan Borrower’s Bill of Rights.  The bill was first introduced last year, but failed to move forward. The bill is an effort to ensure that the 40 million Americans with student loan debt are protected and understand their rights as consumers.

“The Student Loan Borrower’s Bill of Rights” will ensure that all borrowers have basic rights and protections as they repay their student loans and offer more repayment options to them if they are unable to make their monthly payments in full,” according the Senator Dick Durbin. He was one of three senators to reintroduce the bill.

The legislation’s authors explained that the new bill would give six basic rights to both federal and private student loan borrowers:

1. The right to have options such as alternative payment plans to avoid default.
2. The right to be informed about terms and conditions of the loan and repayment options to ensure changing plans will not cost more.
3. The right to know your loan’s servicer and who to contact when there is a problem.
4. The rights to have consistent monthly payments. Lenders and servicers will also be required to honor promotions and promises that are advertised or offered to borrowers.
5. The right to fairness when it comes to issues such as grace periods, when loans are transferred, or debt cancellation when the borrower dies or becomes disabled.
6. The right to accountability including timely resolution of errors and certification of private loans.

The Bill of Rights will also ensure that service members and veteran borrowers will be provided with a liaison specifically trained in the benefits available to military borrowers.

Click here to learn more about the Student Loan Borrower’s Bill of Rights.

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 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, 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 http://www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

President Obama Announces Changes for Student Loan Repayment

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President Obama recently signed a “student aid bill of rights,” which outlined an assortment of policy changes to make it easier on borrowers to pay back their student loans. It will require businesses that service student loans to ensure students know how much they owe, along with providing repayment options and helping students get back in good standing who are falling behind on payment.

In addition, President Obama has asked the Treasury and Education Departments and the Consumer Financial Protection Bureau to report by October 1, 2015 on whether or not bankruptcy laws or other laws should be amended to include student loans. Lenders have always resisted loosening bankruptcy standards for student loans. However, many believe that student loans should be eligible for discharge when students are burdened by heavy debt.

Federal student loan borrowers are eligible for discharge in bankruptcy court for borrowers with permanent disabilities. However, the review will focus on students who borrower from private lenders, who do not have the same protections as federal student loan borrowers.  According to the White House, approximately 40 million Americans have student loan debt and more than 70 percent of graduates with bachelor’s degrees have an average of $28,400 in student loan debt.

Click here to read more on Obama’s plans to change student loan debt repayment.

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 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, 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 http://www.miamibankruptcy.com.