Articles Posted in Student loans

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Christie_1Despite lots of changes in the landscape allowing the discharge of both federal and private student loan debt under the right circumstances, many people still believe that student debt survives a bankruptcy.

Private loans follow very different rules then federal as you probably know.

One thing I haven’t written much about are private loans for these vocational schools such as those for coding, helicopter, cosmetology etc.  If the school is NOT on the federal Title IV list for the years of attendance, those are dischargeable in a bankruptcy.

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Christie_1Most people I speak with about the disability discharge of federal student loans are concerned that the test is similar to the Social Security Disability analysis.  It’s not.  You don’t have to deal with a scale of whether you can feed or dress yourself.  You don’t have to be approved for SSD.

It’s a vocational test.  Something we’ve dealt with often with our ADA or FMLA work for our former plaintiffs’ employment law practice.

The TPD standard doesn’t mean the borrower can’t work at all, it just means that due to their medical condition(s), they can’t reasonably work enough to be able to sustain themselves. 

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Christie_1Are you having trouble with your federal student loan servicer who is asking for  income documentation?  You can avoid all that for now, by simply self-certifying your income.  You can self certify through February 29, 2024 and here is how:

https://studentaid.gov/help-center/answers/article/report-income-in-the-income-driven-repayment-application

https://studentaid.gov/help-center/answers/article/report-income-in-the-income-driven-repayment-application

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Christie_1To help get the word out on how to obtain significant savings on federal student loans, we are speaking at a roundtable for the Florida Defense Lawyers Association on December 14.

Sponsored by: The FDLA Women in the Law Committee. Maximize your opportunities for student loan forgiveness by taking advantage of the new IDR Audit, SAVE, and On Ramp programs. While the IDR Audit is automatic, there are ways you should prepare for it to obtain the most forgiveness particularly if you have older FFEL loans, gaps between education, or even Parent Plus loans. Don’t try and figure it out all alone! (This is roundtable discussion with no CLE or CE offered.)

I don’t think you have to be a current FDLA member, but you may want to consider joining, and you do need a Fl Bar number.

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Christie_1If you have federal student loans, the Income Contingent Repayment (“ICR”) is the most expensive Income Driven Repayment Plan or IDR:

  • 20% of your discretionary income, or
  • the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.
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Christie_1I just wrapped up an interview for badcredit.org for a story that they will run sometime in Nov or early December about the new rules allowing someone to discharge student loans in bankruptcy.  I’ll post links here when that story is ready.

Bottom line is that there is a growing awareness that private student loans can often be discharged in a bankruptcy as a non-education loan.  You’d be surprised at the results that we see!  Often a full discharge, or getting the balances dropped by 50-70% and interest reduced from 10-15% to 1-2%.  Very small payments spread over 20 or even more years.  And the kicker is that any discharge in bankruptcy is tax free forgiveness.  Who wouldn’t want to kick their private student loan to the curb…

But what about federal student loans?  In the past, we simply did not file these cases – it was nearly impossible to win a discharge of federal student loans.  I used to work for the other side running around the State of Florida trying these cases.  I think I lost one down in Miami.  One.  All the rest resulted in a win for the creditor (my client at that time before I moved to the consumer side of things).  But now since the new DOJ process is available, it is finally possible, if not probable.  Here’s the new results – see for yourself:

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Re: Youssef v. Navient Solutions LLC, et al., Adv. Pro. No. 17-1085, in the U.S. Bankruptcy Court for the Eastern District of New York.

CLAIM SITE: NavientStudentLoanSettlement.com

Borrowers are eligible for free money under $16 million student debt settlement – but you need to file a valid Claim Form by November 20, 2023.  There is no cost to do so.

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Christie_1Consolidation before December 31, 2023 will help some borrowers maximize benefits under the Account Adjustment.  After the account adjustment, the qualifying PSLF payments made on loans later consolidated will be credited to the consolidation loan based on a weighted average of the qualifying payments on the underlying loans.  This will also help you to have one start/end date for PSLF forgiveness.

Those with Perkins loans or FFEL loans should definitely consider December 31, 2023 their deadline to consolidate their loans to Direct in order for prior payments to now count toward PSLF as well as future payments.  Remember, you can consolidate even one loan.  Think of this as a kind of refi – to a different type of loan.  Stay within the federal system – this is where all the forgiveness is occuring.

Please see our video on Double Consolidation if you have Parent Plus loans — this loophole may allow you to get into SAVE for a payment that is often MUCH LESS than the Income Contingent Plan (“ICR”).  https://www.youtube.com/watch?v=9KX74O4OJ8s

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Have student loans that are entering repayment?  On hold with your servicer?  For hours?  Not quite sure what’s going on?

Your servicer is your debt collector — are you certain that whatever they are going to tell you, assuming you get through, is your best option to reduce or eliminate student loan debt?  Try this test:  call 3-4 times, see how many different answers you get…

5.0 stars

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Lots of misinformation out there regarding student loans.  If you are receiving a bill, it’s important to speak with an expert or advocate who is on your side — discuss your options, make a plan.  You might save many thousands of dollars by doing this!

There are some important deadlines also for the IDR audit/recount, and Parent Plus loans in particular.  You may want to consider opting out of the IDR audit if you have a long loan history with gaps between loans — you can combine them and get more credit through a consolidation, then opt back in.  But consider a double consolidation if you have Parent Plus loans.  If all of this makes no sense to you, then see us, or someone like us!

Channel 13 10/17/23 Following a three-year pause, student loan payments have resumed for thousands of Americans.

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