The tax landscape for student loan forgiveness is constantly shifting. Earlier this year we blogged about disability discharges of federal student loan debt no longer considered taxable. Discharges in bankruptcy for either federal loans under a Brunner challenge or non-qualified private student loans that don’t meet the definitions for discharge…
Just now, I got off the phone with a very sophisticated potential client who is facing a garnishment for his federal loans. This was a very intelligent person and well respected in his field, but he didn’t really know much about how the student loan system worked. His closing comment…
Matt Taibbi with Rolling Stone, wrote a recent piece called “The Great College Loan Swindle” that outlines how we got here. It started with sales pitches that colleges make to kids – comparisons of salaries of those with high school diplomas to those with 4 yr degrees. The value of…
Florida is a state that allows professional licenses to be suspended for non-payment of federal student loans. We had a client who came to us last month after having her LPN license suspended. This is even worse than a garnishment. Rather than 15% of her wages being garnished, which is…
Today, a client elected to have us settle her defaulted federal student loans in full by payment from her 401k. While we normally don’t recommend using protected 401k monies to settle debt, this particular client makes too much for debt forgiveness. A settlement now will likely result in 10% reduction…
An Iowa appellate court ruled recently that a Income Driven Plan with a zero payment “does not ameliorate the undue hardship”. In In re Martin, out of the Northern District in Iowa (8th Circuit) the lender argued that the debtor was not entitled to discharge the loans because she would…
Initially, twenty some years ago, I worked on the side of the student loan companies. Whenever someone in the State of Florida sought to discharge federal student loan debt in bankruptcy, I was often trial counsel for the student loan company. Our clients ranged from Sallie Mae, ECMC, TERI and…
Someone asked us recently: where does someone start to make sense of it all – when mounting student loans are crushing them and they don’t know what to do. That’s exactly where our clients stand, there is so much information out there, some accurate, some not so much, and it’s…
Desperate mother, teacher, bus driver and student loan captive for life. This is the actual signature line of a client who we are helping with her federal student loans. The short version of her story: she paid 10 years of consecutive and timely payments only to be told that she…
The New York Times today in an article titled “Education Department Unwinds Unit Investigating Fraud at For-Profits” shows a department charged with investigations of schools such as DeVry, Corinthian, Everest, ITT, IADT etc., has only three employees now that it has all but been shut down. In addition, the unit’s…