Student loans

Published on: April 19, 2019

The Patriot Act Exposes the Student Loan Bubble: Entertaining and Informative Piece

This week 60 Minutes aired a student loan story about a Home Depot founder who donated hundreds of millions and raised additional funds to make NYU’s medical school tuition free. While this was a great story, and a compassionate thing to do to ensure that the lower paid physician fields such as general practice and internal medicine draw new doctors in today’s world where it costs several hundred thousand for medical school, still the impact is minimal if you look at the landscape of 1.5 trillion dollars of student loan debt out there.

A better overview of the enormity of the student loan debt bubble, how we got here, and possible solutions, check out the student loan story on the Patriot Act by Hasan Minhaj, airing on Netflix.

A clip with me about Navient appears 8 minutes in, another of our Florida client’s news story about losing her medical LPN license when in default on her federal loans was quickly on in the beginning, and another client spoke of his denial of PSLF, and our class action against Navient for misleading people into believing they qualify for PSLF is 16 minutes in. It’s only a ½ hour show – talks about the recent IG audit too: 61% of the time when dealing with your student loans, the federal student loan servicers screw up. The story focuses on the fact that the Department of Ed is the biggest lender out there, isn’t prepared to be, and how horrible of a job the servicers do and that student loan debt is now more than vehicle and credit card debt combined etc. Here’s a link on YouTube – it’s well worth the watch:

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Published on: April 15, 2019

Bankruptcy Payments Permitted to be Directed Toward Principal During Plan

By Christie D. Arkovich, P.A.

Faced with a nearly impossible standard to discharge federal student loan debt in bankruptcy due to undue hardship, creative debtors’ attorneys and the bankruptcy courts are continuing to create pockets of relief wherever possible.

Finding that “non-dischargeability does not immunize the student loan claim from modification,”a bankruptcy court confirmed the debtors’ plan under which their payments would go to the principal on their student loan debt with accumulated post-petition interest to be paid post-discharge. In re Duensing, No. 18-10201 (Bankr. D. Kans. Feb. 22, 2019).

The guarantor of the loans, ECMC, objected to the debtors’ proposed treatment of the student loan debt arguing that, because the reduction of principal would result in declining post-petition interest, the proposed plan effectively discharged her student loan without a finding of undue hardship.

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Published on: April 13, 2019

Great Decision for a Non-Profit Group (ABA) for PSLF – Denying the DOE’s Attempt to Limit Employer Eligibility

By Christie D. Arkovich, P.A.

Many people are facing uncertainty about PSLF for all kinds of reasons. We’ve focused on those who were told they were in the PSLF program only to find out that their loan types didn’t qualify all along, and now they have to start all over. We also help borrowers who were in the wrong payment plan and their servicer should have known that that plan did not qualify for PSLF. Congress even set up a TE-PSLF program to temporarily waive those in the wrong payment plan provided their payment was at least as much as it would have been under IDR.

We now see two other issues popping up with more frequency. Those encouraged to go on forbearance when they should have been on an income driven plan at a low or even zero payment which would have qualified for PSLF.

One other issue that a potential client is facing is having her PSLF certification under review now for years.

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Published on: April 9, 2019

Re-Certification of Income for Federal Student Loans – Can I do it Myself? Should I?

By Christie D. Arkovich, P.A.

How can you trust your student loan servicer when they don’t follow the law 61% of the time per a recent Inspector General’s Report?

Let’s look at a relatively simple chore – re-certification of income under an income driven plan. What appears to be simple, can have meaningful impact. If nothing has changed, you likely can do it yourself – but do yourself a big favor and keep reading just in case. Here is a brief explanation of what we do to re-certify the borrower’s income to remain in an Income Driven Plan (IDR) for federal student loans:

When we are asked to re-certify an IDR plan, we ask that the borrower advise of their marital status, income of each spouse, # and circumstances of dependents, amount and type of federal loans, and lastly whether the borrower is working or intends to work public service. There are times that nothing has changed from the borrower’s prior circumstances the previous year and we likely would simply submit their tax return to renew. We would need to obtain a signed authorization form and often follow up with the servicer(s). We are often re-explaining how the forgiveness works, the 1099 expectation, impact on their credit, ability to qualify for a mortgage one day.

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Published on: April 3, 2019

The Fresh Start for Life Podcast

By Christie D. Arkovich, P.A.

A bankruptcy attorney colleague, Don Golden, has started a new Podcast, The Fresh Start for Life, and has graciously had me on as one of his first guests.

Tune in to listen to our chat where we talk about options to pay off student loan debt. Links for Itunes, Spotify, Google and Sticher at the end of this post.

Student Loan Debt-Know Your Options with Christie Arkovich

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Published on: April 2, 2019

Dear “Student Loan Sharks”

By Christie D. Arkovich, P.A.

I regularly ask for hardship letters from our clients in our student loan and other debt settlement cases.

One of our clients began his letter “Dear Student Loan Sharks”…. I took that part out, but if you read his letter, you would be very saddened by what has happened to him. Out of a family of nine siblings, he was the only one to go to college.

However, his bright future was cut short when he went to I.A.D.T., which was acquired by Sanford-Brown, both of which were shut down. His credits and degree are worthless. Employers don’t recognize these degrees and schooling. These schools told him he could make 90k in his field a few years after graduation. They showed him charts and graphs. Upon graduation, he made less than he did serving tables before college. Now with a mountain of debt. Federal and private loans.

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Published on: March 29, 2019

Continued PSLF problems…..

By Christie D. Arkovich, P.A.

Our last client of the day yesterday had this to say: “Navient misled me by having me place my loans on forbearance and deferment rather than on an income driven plan, and also kept me on non-qualifying loans for loan forgiveness for public service. Had they guided me through this process correctly rather than misled me, I would have had my loans already forgiven because I am on my 13th year with the federal government”.

Instead this client is having to start all over again. He only owed $20,486 upon graduation in 1994 in seven loans. He’s been paying what he could for many years. Now he owes $42,000 — in 2018. He’ll never see any forgiveness (administratively) because he now makes too much money and has a huge monthly student loan payment.

How is allowed to happen? This is nothing short of a national tragedy that so many of our public service workers are being denied the student loan relief that they were counting on!

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Published on: March 20, 2019

Forbearance Renewals on Federal Student Loans: BDTR Hotline

By Christie D. Arkovich, P.A.

Many folks who have filed applications for Borrower Defense to Repayment seeking to discharge their federal student loans due to fraud by the school, are running into problems with their servicers sending bills that payments are now due — even though the application is still pending and the loans should be in forbearance until the review is complete.

I believe this is due to the understaffing of the BDTR department by the Department of Education as they put the program on hold and are now in the process of re-writing it under Secretary DeVos. Regardless of how that all comes out, you can call the DOE BDTR hotline for help with your forbearance. They will call your servicer and push back the loan due to the forbearance. That hotline is (855) 279-6207.

For borrowers nearing retirement, that is 2-3 more years closer to retirement (where less income will allow for a much smaller Income Driven Payment).

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Published on: February 25, 2019

Parent Plus Loan Warning: How to Avoid Paying 850% More on Your Student Loans

By Christie D. Arkovich, P.A.

It’s extremely important when consolidating federal loans that you do not add any Parent Plus loans to the consolidation of your own loans. It will taint the new loan and disallow many favorable options.

Here’s an excellent example from a current client (Cecelia) who came to see us before she did anything — just to make sure what she was doing was correct. Can’t express how valuable that decision turned out to be.

By keeping a very small Parent plus loan of $3,000 apart from all of her other loans totaling in the low six figures, this client is estimated to have an IBR payment of $191 starting in approximately 90 days. Had she not come to see us for advice first and consolidated all of her loans (as her servicer would have had her do), her loans would only be eligible for ICR and a payment of $1600.

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Published on: February 12, 2019

Defaulting on Federal HEAL Student Loans can Cause Loss of Medicare Benefits!

By Christie D. Arkovich, P.A.

Anyone with a federal HEAL student loan, should be aware that additional consequences can occur in the event of default. One of these consequences is exclusion from Medicare, Medicaid and all Federal health care programs pursuant to 42 U.S.C. Sec. 1320a-7(b)(14) for failure to pay your Health Education Assistance Loan(s) (“HEAL”).

It is possible to enter into consolidation or rehabilitation to cure a default. Then a payment plan can be set up based upon your income. If the matter has been referred to the Department of Justice, and a judgment has already been entered, then a Repayment Agreement is possible to avoid such an outcome.

In Florida, a default on federal HEAL loans may also cause the suspension of the practitioner’s license. Kinda hard to repay that student loan while unemployed. If you own your own practice, can you imagine the harm if your entire practice was shut down without warning?

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