Articles Posted in Uncategorized

The Senate passed a bill a few weeks ago, the Joint Consolidation Loan Separation Act, to unravel the Joint Spousal Consolidation Loan program which has trapped many older borrowers who were encouraged to consolidate their loans with their spouses upon graduation. While that may have sounded like a good idea back in the 1990s to an uninformed borrower, folks were trapped in the program when it was discontinued in 2006, and therefore were not eligible for the lowest income driven plans, nor even public service because they did not have the correct loan types and could not change them through a consolidation.

Twenty years later, borrowers are still shackled with these spousal consolidation loans even in cases of divorce, or the death of one spouse. If passed, the Act would allow the loans to be severed, and would enable borrowers to access loan relief programs that they were previously ineligible for, such as PSLF, Income-Driven Plans, etc.

Waiting…

I just wanted to flag that as of  7/1/ 2022, PSLF Certification & Application Forms must be submitted to MOHELA.  Section 7 of the form has been updated to reflect the new submission instructions if it is accessed using this link. However, if you generate the form using the PSLF Help Tool or access it from the FSA Forms Library, the instructions still say to send everything to FedLoan.

Hopefully, FSA will change this soon, but until they do, this could cause confusion.

We can still use the old form despite the changes in the document, but we would now submit it to Mohela.

Whoo Hoo!  In a class action Sweet v. Cardona, the parties, including the Department of Education, have just announced a settlement of Borrower Defense to Repayment claims (“BDTR”).  It’s still early, and we don’t yet know if this settlement will be approved by the Court or if some of the named schools will oppose it.  We anticipate that the listed schools who are still in business will oppose the settlement or petition to have their school removed from the presumptive list.  Here is a copy of the filed settlement agreement.  So while this isn’t final, it’s certainly a huge step in the likely direction of where these BDTR applications are headed.  It’s been a long time coming, and will result in much needed relief for student loan borrowers.

What should you know?  Well, first of all, here is a list of schools that are presently in line for a full discharge.

For a FAQ, please go here.   One of the parties who has been instrumental in obtaining this settlement, the Project on Predatory Student Lending, has prepared detailed questions and answers for those who attended these schools or have allegations of fraud under the BDTR program.

I’m happy to say that we are starting to see Navient refund checks coming in!  A client today received a check for $13,795 which represents payments he had made on a Navient private student loan after June 30, 2021.  The remaining balance on these loans were forgiven per the Navient Attorney General settlement.

If you have questions about the Navient AG settlement, please watch and subscribe to our video:  https://www.youtube.com/watch?v=0m5rmBoj8eg

A FAQ is located here as well:  https://navientagsettlement.com/Common-Questions?portalid=0.

We’ve made the difficult decision to not take any further clients who have requested assistance in filing Borrower Defense to Repayment applications.  Importantly, it is NOT because the program itself won’t result in possible full forgiveness, we still expect that for many borrowers, but it is taking a longgg time.  If you have filed a BDTR application, go here and click Manage my Application to find any updates on its processing:  https://studentaid.gov/borrower-defense/.

We’ll still be doing all of our other student loan stuff, just not the BDTR applications.

Mostly our decision to not offer assistance in filing BDTR applications is because the Department of Education’s procedures have tied our hands.  We can no longer file the applications online like we used to be able to do.  Even reviewing the PDF draft applications hasn’t been working well because the application itself when forwarded by the client to our office does not always convey the information to view, many of the text boxes are blank unless and until the application form itself is revised per Adobe to correctly retain the data.  It took our IT company some time to figure that out and only the Department of Education can modify their application.

Here’s a link to the video.  Please subscribe so we can continue to offer this information free to everyone!  Thank you!

We are happy to share our thoughts on the new Public Service Loan Forgiveness Waiver announced last month.  It truly will fix most all of the problems with the PSLF program and we have already seen many clients benefit!

I was asked to present a webinar for the Florida Bar this week and over 500 people registered.  That’s a 10x of their usual number of 50.  Lots of demand to understand a new and important way to forgive student loan debt.  And you have until October 31, 2022 to act.  While that may seem like a long time away, a year goes by fast and why wait.  Why not get this done now and be done with these loans if you’ve already made 120 payments but found that many if not most never qualified.  They are likely to qualify now, provided you worked full time for a government agency or a qualifying non-profit.