Articles Posted in Student loans

So I’m hearing that President Trump is moving the federal student loan system over to the Small Business Administration (“SBA”).  I’m also hearing today that they are cutting the SBA’s workforce by 40%.  Interesting.  I admit, I was expecting big changes, but I didn’t really have this on the bingo card.

I have always been an advocate of looking at the ROI, return on investment, when deciding how much to pay for what degree.  I imagine this change will only emphasize this.  I’d hate to get a degree that resulted in unemployment or underemployment and then default on an SBA loan.  The SBA has a reputation of playing hardball when it comes to negotiation of past due balances.

At least the SBA has a system in place for loans and the collections of loans.  How they would incorporate all the Income Driven Plans and the other oddities and complexities of the federal system I really don’t know.  Maybe they won’t or they will do only that which was passed by Congress like IBR and PSLF.  I do know there was a report out by the Inspector General’s office a few years back that 62% of the time the dozen or so federal student loan servicers would do whatever wrong.  So the bar is pretty low to do it correctly.  I used to say that if I cited the wrong law or something 62% of the time, the Florida Bar would probably ensure my disbarment.

Today’s webinar went off without a hitch – link here.  I tried to update our fellow attorneys on what we are seeing or hearing out there in our student loan world.  Lots of changes, practically to everything in fact.

Student Loan Essentials:  Updates, Strategies, and Advocacy for Legal Aid Practitioners.  It’s one hour and free.

This is approved for Florida Bar 1.0 General CLE credit – see link for specifics.

While it is unlikely that the Trump administration will close the Department of Education anytime soon, it is clear that ED will be dismantled in some form over the next few months to years.  Many of its functions may discontinue or be passed to other federal or even state agencies.

It may be important to download information now while it is easily accessible to save time in the future.  You may need to prove loan balances, payments and the like to protect yourself in case of inaccuracies with a systemic change.  We would suggest that you download your StudentAid.gov records (NSLDS file, dashboard screenshot, PSLF and IDR tracking details), and your loan servicer records (payment histories, key notices/letters).

Keep this information just in case.

During all the hoopla surrounding student loans last year, probably the best program (TPD) out there gets so little attention.  Right now, that’s probably a good thing right?

I’m talking about the ability for someone who is unable to work a full time job doing what they used to do actually getting a discharge of their student loans due to that inability to work.  The test doesn’t read like that exactly, but it’s far from the SSD questions of “Can you feed yourself?”  “Can you dress yourself?”  We’ve long obtained full discharges within a remarkably small time frame of as little as 60-90 days using the TPD program.  We focus on someone’s vocation, what they were trained to do, their experience and actual abilities.  Age matters as well, our best chances exist when we have someone who is 55 or older with cognitive issues.   My former experience as an employment attorney and the use of the ADA and FMLA I think helps to understand and process these claims.  Our streamlined process includes medical professionals who can see our clients via Zoom or in our office in Tampa.

As this program, which has been paused for a couple months, begins anew, we expect some changes.  It’s possible that the test will be more stringently applied.  That’s good and to be commended.  We don’t want people who aren’t deserving of this discharge to get it either.  However, our clients have had long term illnesses and/or injuries that have made it next to impossible to pay their student loans back.  The income simply isn’t there and often hasn’t been for a long time.  Getting a TPD discharge can be life changing now b/c it will get rid of that fear of the government coming after someone or their social security for students.  This includes even Parent Plus loans.  In fact, it may be the only solution for those with Parent Plus loans!