student loans Archives - Page 4 of 4

Avoid Making these EXPENSIVE Student Loan Mistakes

Posted on September 5, 2014by Admin

Student loans have become a necessary evil for many students wanting to attend college or graduate school these days. A number of students fall into the gap of being “Too Poor to Afford College, Too Rich for Financial Aid.” There are two detrimental mistakes that many graduates are making when it comes to their student loan debt.

1.) Delaying the Inevitable. There are very few ways to get out of paying your student loans, even with the student loan forgiveness programs available. Waiting to pay back your loans, just allows them to grow. Interest will accrue and the debt will grow over time. Even waiting 1-2 years after graduating could cause your loan balance to increase by 10%. So instead of waiting until you earn more money or find a better job, negotiate with your lender to work out a repayment program that works for you.

Ask your lender if you qualify for any income based repayment plans or pay as you earn programs. In many cases, you could have $0 repayment until you start earning more money. This will help you map out a plan to have your student loan debt forgiven after a set number of years, and also keep your payments manageable until then. It is estimated that roughly 5 million borrowers qualify for these income based repayment plans or pay as you earn programs. However, only about 700,000 borrowers are enrolled in these programs.

2.) Paying for Student Loan Help you do not need. More and more businesses are entering the “Student Loan Forgiveness” and “Student Loan Consolidation” market. It’s a booming business! Unfortunately, many of these can be classified as student loan scams. These companies advertise on TV and radio that they can help struggling borrowers qualify for student loan forgiveness programs or lowering their monthly payments through consolidation.

What many of these companies are doing is charging borrowers anywhere from $200 to $1,500 (or more) a month to fill out paperwork that you can fill out yourself. Instead of paying these companies, call your student loan provider yourself. For Federal student loans, the servicing companies have very specific rules they must follow for offering repayment plans, forgiveness programs, and consolidation. Bottom line, you should NEVER pay for student loan consolidation out of your own pocket. If you have Federal student loans, you can get a consolidation loan for free through StudentLoans.gov.

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

An Increasing Number of Borrowers Seek Student Loan Debt Forgiveness

Posted on April 23, 2014by Admin

As education costs continue to increase, so do the number of borrowers enrolling in federal student loan debt forgiveness programs. The U.S. Education Department reports a 40% increase in the just the last six months. The cost of education has increased in recent years- up 6% in 2014 alone. The Obama administration recently proposed capping debt forgiveness at $57,500 per student.

The programs—especially the one revamped by President Barack Obama in 2011, Pay As You Go—forgives federal student loans after borrowers have paid a certain percentage of their income for a certain number of years. These programs aim to make sure borrowers are not prohibited from working in public sector jobs as a result of having to make astronomical student loan debt payments or pay their loans into retirement. These programs could reportedly cost the federal government as much as $14 billion a year.

Students have argued that these programs are necessary- particularly for those who want to take lower-paying jobs in the public sector. These programs are notably one of very few ways to get out of student loan debt. Unlike consumer debt, not even declaring bankruptcy or death can remove these debts. Private student debt is even harder to eliminate; A New York Times report on Tuesday found that when a cosigner dies, many private student lenders are now demanding early repayment for their student loans.

Click here to read more on this story.

Bankruptcy Law, Timothy Kingcade Posts

Recent Bankruptcy Case Offers Hope to Student Borrowers

Posted on December 30, 2013by Admin

Michael Hedlund, a graduate of Willamette Law School was able to discharge a portion of his student loans in bankruptcy following a 10-year court battle. Hedlund borrowed approximately $85,000 to get his undergraduate and law degrees, then failed the bar exam three times. He ultimately got a job as a juvenile counselor. At the age of 33, married with a child, he declared bankruptcy.

This case, which ended with the 9th U.S. Circuit Court of Appeals discharging Hedlund’s student loans, has potentially large implications for borrowers. It’s pretty well known that student loans cannot be discharged through the normal bankruptcy process. Instead, Congress requires student loan borrowers to prove “undue hardship.”

In the absence of any further guidance from Congress on what constitutes undue hardship, most courts apply what is called the “Brunner standard.” This standard requires a borrower prove three things:

1.) The borrower and any dependants cannot maintain a minimal standard of living based on current income and expenses;

2.) Additional circumstances indicate this is likely to be the case for a significant portion of the borrower’s repayment period;

3.) The borrower made a good faith effort to repay the loans.

Important to other struggling borrowers is the fact that the 9th Circuit Court upheld the bankruptcy court’s relatively reasonable application of the facts in Hedlund’s case to the Brunner standard.

Specifically, the Court agreed there was considerable evidence the family’s expenses, including two cell phones and leasing a reliable car could be seen as reasonable and that the excess expenses- including cable and children’s haircuts- were considered marginal. The bankruptcy court also rejected arguments that Hedlund should find another part-time job, holding there was considerable evidence that Hedlund had maximized his income. The Court did note that his wife could be expected to work three days a week rather than one.

This verdict provides not only hope, but good precedent for future plaintiffs who want to have their student loan debts discharged in bankruptcy. Borrowers should also be aware of a study by Jason Iuliano which suggests that in 2007 alone, there were 69,000 borrowers who were good candidates for relief but fewer than 300 actually attempted to discharge their loans.

Both Hedlund’s experience and Iuliano’s study should encourage more borrowers in bankruptcy to assert their rights under the undue hardship standard.

Click here to read more on this story.

If you are in a financial crisis and are considering filing 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, 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, Timothy Kingcade Posts

Student Loan Borrowers Face Payment Processing Pitfalls

Posted on November 1, 2013by Admin

A new report from the Consumer Financial Protection Bureau (CFPB) reveals that the companies hired by lenders to collect payment for private student loans are not always acting in the borrowers’ best interest. In fact, sometimes their actions increase the total cost of higher education. The most common complaint deals with the problem encountered when borrowers try to pay off their loans early or pay them off in a certain order.

Oftentimes, it makes the most sense to pay off the student loan with the highest interest rate first, but the CFPB report found that loan servicers do not always do that. Instead, they frequently divide the payment or over-payment and apply it to all of the person’s outstanding loans. According to the report, these “payment processing pitfalls” can lead to increased costs, extended periods of repayment and harm the borrower’s credit profile.

The CFPB also found problems for borrowers who had multiple loans with the same servicer and were unable to make their monthly payment in full. They were oftentimes told by the loan servicer to pay as much as they could. But instead of putting all of the money toward the highest-rate loans, the loan servicer applied it evenly to all of the loans. This practice maximizes late fees and can intensify the negative impact of a single late payment to the borrower’s credit profile.

Another problem encountered by borrowers was when their loans were transferred to another service provider. These complaints included lost paperwork, processing errors that resulted in late fees and an interruption in billing statements. More than 3,800 complaints about private student loans were received between October 1, 2013 and September 30, 2013. 49 percent of these complaints were with Sallie Mae.

If you are having trouble making your student loan payments or you have recently defaulted on your federal or private student loans, contact an experienced Miami bankruptcy attorney. Although student loans are often not dischargeable in bankruptcy court, an attorney can help you eliminate other debts and obligations so you can take control of your finances and better handle your student loan debt.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Parents on the Hook for Child’s Student Loans

Posted on September 25, 2013by Admin

American student loan debt tops $1 trillion, according to the Consumer Financial Protection Bureau. But with many recent graduates facing a tough job market and limited employment opportunities, what happens when they cannot afford their monthly student loan payments? If a parent co-signed the loan, the burden shifts to them.

Bankruptcy attorneys are seeing an increasing trend with parents struggling to pay off their child’s student loans. Unfortunately, even bankruptcy cannot wipe the slate clean- unless of course undue hardship can be proven. Al Franken, on the Senate Education Committee, said that he has backed several pieces of legislation he thinks could help. One example is the Fairness for Struggling Students Act, which, if passed, would make it possible to eliminate private student loan debt in bankruptcy. Franken has also backed legislation that aims to help students receive better counseling when taking out a loan.

Experts say parents can and should co-sign their child’s student loans, but must be “informed borrowers,” meaning they need to closely scrutinize the terms of the loan. Many banks are getting out of the student loan business, largely because of the increased scrutiny from lawmakers. JPMorgan Chase announced its departure just a couple of weeks ago. Bank of America, Citigroup, and U.S. Bank have already done the same. So for future borrowers, it means more student loans will come from the federal government.

Click here to read more on the story.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Obama’s Latest Student Loan Policy Faces Scrutiny as Student Borrowing Costs Increase

Posted on May 21, 2013by Admin

A nonpartisan government report has shown that the Department of Education is forecasted to earn a record $51 billion profit off student borrowers this year. The Huffington Post highlighted the estimate by the Congressional Budget Office, which showed that the Education Department was forecast to report higher earnings this year than Exxon Mobil and nearly as high as those of the four biggest U.S. banks combined!

Congressional Democrats are scrutinizing President Obama’s latest student loan policy and urging for structural reforms. One member of the House of Representatives stated, “We don’t see students or their parents as profit centers, and we don’t think it’s an appropriate concept to be acting like a market-driven bank here.”
The increasing gap between what students and families pay to finance a college education and what the U.S. government pays to borrow has led to record profits for the Treasury. President Barack Obama’s plan, features lower rates than the House Republicans’ plan, though unlike the Republicans’ plan it does not cap interest rates in case the U.S. government’s borrowing costs rapidly increase. The president’s plan would expand a program signed into law by George W. Bush that would tie monthly repayments of federal student debt to borrowers’ income. However, that part of Obama’s proposal was not seriously pursued during the education committee meeting.

Bankruptcy Law, Credit, Foreclosures, Timothy Kingcade Posts

Credit Card Delinquencies Reach 18-Year Low

Posted on April 16, 2013by Admin

Credit card users are using some of the best bill paying practices in nearly two decades. In the fourth quarter of 2012, delinquencies on bank-issued credit cards sank to 2.47%. This is the lowest level of delinquencies since 1994, according to an American Bankers Association report. It was significantly down from the previous quarter, which was 2.75%. The record high was set in 2009 at 5.01%. According to ABA Chief Economist James Chessen, credit card delinquencies fell throughout most of 2012.

In addition to consumers being more careful about paying their bills on time, banks are also being more conservative when approving people for credit cards. Banks are taking steps to ensure the consumer has the capacity to repay their debts. Delinquencies in three real estate related categories also fell in the fourth quarter: home equity loans, home equity lines of credit and property improvement loans. These declines reflect another sign of the housing market recovery. Auto loan delinquencies arranged through third parties, such as car dealers, also dropped in the fourth quarter to 1.85%, down from 2.08% in the previous quarter. However, credit card delinquencies on mobile homes and boats both increased at the end of 2012. Student loan 90-day delinquencies also increased during the fourth quarter of 2012 to 11.7%, up from 8.69% at the end of the first quarter of the year.

Click here to read more about the 18-year low on credit card delinquencies.

Timothy Kingcade Posts

What President Obama’s Re-Election will Mean for Students

Posted on November 12, 2012by Admin

President Obama continues to prove his commitment to lower student loan rates, which earned him immense popularity with students, aged 18-29 in this year’s election. During his last term he stopped the federal student loan interest rates from doubling and he increased funding for Pell grants, which provide support to underprivileged students. One of his biggest steps forward for students was providing them with the option of repaying their loans according to income rather than the amount borrowed.
Now elected for another term, President Obama’s ambitions are high when it comes to education. Within 10 years he wants to halve the amount by which tuition fees rise year-on-year. He also wants America to have the highest proportion of university graduates in the world by 2020. But the biggest challenge Obama will face when implementing education and economic reform is the same as in his first term – a Republican-led Congress.
Without action from Congress by July 1, 2013, interest rates on subsidized loans that are now 3.4 percent might double and Pell grants will face a funding shortfall of $7 billion in 2014. President Obama has other plans to help students, such as job training initiatives through partnerships with community colleges and the private sector in his second term, which he promises will result in 2 million job placements.
To read more on this story visit: http://www.guardian.co.uk/education/2012/nov/07/obama-reelection-students-loan-reform
Or visit: http://www.dailytarheel.com/article/2012/11/5099fe9ea545b
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. at www.timothykingcade.com.

Bankruptcy Law, Timothy Kingcade Posts

Hearing Held to discuss the Student Loan Debt Crisis

Posted on April 10, 2012by Admin

On March 20, 2012 the U.S. Senate Committee on the Judiciary Subcommittee on Administrative Oversight and the Court held a hearing to discuss the student loan debt crisis. The hearing was entitled, ‘The Looming Student Debt Crisis: Providing Fairness for Struggling Students.’ Since the recession, college graduates have struggled to find not only well paying jobs, but jobs in general. In 2005, a provision was made to the bankruptcy code that prevents borrowers from discharging their student loan debt in bankruptcy court. Financial analysts predict that a crisis with effects similar to the crash of the real estate market could happen if things to do not change.
A variety of professionals who are familiar with the current affects of student loan debt on the economy gave testimonies to remove this provision. In attendance, were Attorney’s Generals from Kentucky and Illinois, borrowers who are struggling to pay their student loan debt and representatives from organizations such as the Student Loan Borrower Assistance Organization. Most of the testimonies were in agreement that student loans should be treated in bankruptcy court just as any other consumer debt. There was also talk about loan modifications being available to borrowers who cannot afford to pay back their student loans, due to economic circumstances.
To read more on this story visit:
http://www.judiciary.senate.gov/hearings/hearing.cfm?id=eb997a7c3376c76b36a041cf2a10ca10
http://www.studentloanborrowerassistance.org/2012/03/24/bankruptcy-and-fairness-for-struggling-students/
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced 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, P.A. website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Student Loans go Unpaid as Younger Workers Face Difficult Conditions in the Labor Market

Posted on August 30, 2011by Admin

According to data from the Federal Reserve Bank of New York, 11.2% of student loans were more than 90 days past due and the rate was steadily rising. Only credit cards had a higher rate of delinquency at 12.2%. Younger workers have continued to face the most difficult conditions in the labor market. Workers between 20 and 24 years old have a 14.6% unemployment rate, compared to the national average of 9.1% recorded in July.

Student loan debt outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year as more students go to college and a growing number borrow money to do so. According to reports, two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993.

Education policy experts expect that the mounting debt may have extensive implications for the current student borrower. Individuals finishing or leaving school with a lot of debt, may find their choices to be different than the generation before them. Things like buying a home, starting a family, a business, and saving for their own children’s college education may have to be put on hold for those with insurmountable student loan debt.

Students who borrow to attend for-profit colleges are especially likely to default. They make up about 12% of those enrolled in higher education, but almost half of those defaulting on student loans. According to the Department of Education, about a quarter of students at for-profit institutions defaulted on their student loans within three years of starting to repay them.
To read more on this topic visit:
http://blogs.wsj.com/economics/2011/08/16/more-student-loans-are-past-due/?KEYWORDS=student+loans
http://www.nytimes.com/2011/04/12/education/12college.html?_r=1

If you have any questions on this topic or are in need of a financial fresh start, please contact our experienced team of bankruptcy attorneys at (305) 285-9100. 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, P.A. website at www.miamibankruptcy.com.