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If you thought you were out of luck to qualify for the Public Service Loan Forgiveness (PSLF) program because you were enrolled in graduated or extended repayment plans — Congress recently did you a favor.
Improving consumer protections for federal and private student loans to help ease student loan debt is the aim of an amendment to the Economic Growth, Regulatory Relief and Consumer Protection Act introduced March 8 by Illinois Senator Dick Durbin. It includes a Student Loan Borrower Bill of Rights as well as some bankruptcy protections.
The National Association of Consumer Bankruptcy Attorneys (NACBA) has learned from a number of its members that the Department of Education (DOE) and its student loan servicers are kicking out bankruptcy debtors from their income-driven repayment plans. This is happening when debtors file Chapter 7 or Chapter 13 — even if they are current on their student loan repayments.
If you have defaulted on your federal student loan — you are not alone. According to a September 2017 article in the Washington Post, “the share of people not making payments on their federal student loans within three years of leaving college has risen, reversing five years of reported declines in new defaults.”
The shift is subtle — up to 11.5 percent from 11.3 percent from 2015 to 2016 — but the raw numbers show what a significant issue this is. Of the more than 5 million people who began repaying their student loans in October 2013, 580,671 defaulted.
Student loan Debt has become a crisis in the United States, with many young professionals turning to bankruptcy lawyers seeking relief for crushing Student Loan Obligations. The total outstanding Student Loan Debt has ballooned to over $1.3 trillion, and is only going to get worse.
Last week the U.S. Department of Education announced their latest move to assist some individuals with financially debilitating student loan debt. This part of the Obama Student Aid Bill of Rights, is directed at hundreds of thousands of borrowers who are permanently disabled and cannot work. The Department of Education started sending out letters this week to student loan borrowers that have been identified, with the help of the Social Security Administration, as receiving disability payments and are eligible to have their student loans discharged. This type of student loan relief is known as a “Total and Permanent Disability” loan discharge. There were 387,000 permanently disabled individuals identified, with nearly half of these currently in student loan default, as qualifying with an estimated $7.7 billion in student loans.
The U.S. Department of Education announced, on March 25, 2016, that evidence uncovered in its ongoing investigation of Corinthian Colleges, Inc. indicates that students were defrauded at 91 former Corinthian campuses nationwide and that those students have a clear path to student loan forgiveness. Students in more than 20 states who attended Corinthian's Everest or Wyo Tech schools, now represent the largest group of borrowers eligible for loan relief as a result of the Department of Education's investigation into Corinthian.
San Diego bankruptcy litigation attorney D.J. Rausa uses his knowledge and litigation skills in matters involving tax debts, child and spousal support enforcement actions and consumer bankruptcy. He appears on behalf of clients throughout San Diego and Imperial Counties, advocating for clients in cases involving:
Attorney Rausa advocates for individuals and families consumed by debt after dealing with catastrophic medical bills, job loss, and other factors. Contact him today to discover whether you qualify for debt relief through Chapter 7 or Chapter 13 bankruptcy.
Since 1993, attorney Rausa has provided clients with the legal representation they need to put their financial and legal concerns behind them. Mr. Rausa was one of the first lawyers in San Diego County to shape interpretations of recent federal bankruptcy law changes. He is committed to remaining at the cutting edge of the law and sharing his knowledge of consumer bankruptcy to credit counselors and real estate professionals in San Diego.
During a free initial consultation, attorney Rausa will address your pressing financial concerns and advise you on the new bankruptcy law myths.
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Student loan debt cripples many student loan borrowers, including recent graduates. Many leave college with thousands of dollars in student loans. Even with a steady job, it can be difficult to meet student loan repayment obligations. Others struggle for years in an attempt to manage the student loan debt.
Attorney D.J. Rausa is committed to helping clients develop a payment plan they can manage. He can also determine if a student loan might cause the debtor "undue hardship." This can be used as an exception to the student loan repayment requirements.
In San Diego, attorney D.J. Rausa helps clients obtain relief from student loan debt. He has more than 20 years of experience. He is committed to making sure everyone has a chance to obtain student loan debt relief. Contact us for help addressing your student loan concerns.
Students may have received federal student loans or loans from private companies – many students use a combination of both to get through school.
Many students have also turned to parents, grandparents or others to either take out the loan or co-sign for it. Either way, this makes the parent a student loan borrower.
Because so many students have gotten in over their heads with excessive student loan debt, the federal government has developed a whole host of options available to address Federal Student Loans. These types of loans are subject to programs offered by the U.S. Department of Education.
To find out what Federal Student Loans you have, go to the National Student Loan Data System, www.nslds.ed.gov, to get your report. This report contains vital information in evaluating what the next step will be to address your Federal Student Loans. If a student loan is not on this report, chances are the loan is a private student loan.
Once this information is reviewed, Attorney D.J. Rausa will be able to determine what the best options are.
Private Student Loans are NOT subject to any Federal Student Loan Program. Therefore, they have to be addressed in a completely different manner.
Options for Private Student Loans are very limited, however Attorney D.J. Rausa may be able to negotiate favorable terms of repayment. The factors widely vary from lender, servicer, and collection agency. Therefore the results also vary.
If favorable terms cannot be reached, then a Chapter 13 Bankruptcy is an option that can be exercised to force the Private Student Loan lenders to accept an affordable payment.
There is a common misperception that once you take out a student loan, you are obligated to pay it all back no matter what. This is not entirely true. While some student loan debt may not be discharged through bankruptcy, The Law Offices of D.J. Rausa may have ideas to help you reduce or discharge your debt.
However, it is important to note that the process of discharging student loan debt differs from the process of discharging other types of debt and will require a detailed analysis of the type of student loan as well as the history of the loans.
Student loan debts are not automatically discharged through Chapter 7 bankruptcy. The Chapter 13 bankruptcy process can be used to restructure your student loans into a more manageable monthly payment. Attorney Rausa offers comprehensive Chapter 13 bankruptcy solutions to help you set up a payment plan to pay down your debt, including your student loans.
Chapter 13 repayment plan can last for as long as five years. Attorney Rausa will develop a feasible plan for you in order that some percentage of all your debt is paid. During the pendency of your case, you will be protected from any and all collection activity; this includes the IRS and any student loan collection agencies or servicers.
Sometimes student loans can be forgiven when the borrower is shown to have endured “undue hardship,” such as:
Attorney Rausa is prepared to address all of your questions regarding undue hardship.
Find out more about these related topics:
Contact us by e-mail or call toll free at (619)295-3322 to see if you qualify for the hardship exception, or if reorganizing your payment plan is a better option. A free initial consultation is available with an experienced San Diego student loan debt relief lawyer.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
On January 27, 2016 the Federal Trade Commission filed a lawsuit against DeVry University alleging the for-profit school deceived prospective students by exaggerating post-graduation job prospects. This constitutes a violation of the FTC Act and the complaint asks the court to provide redress to consumers and prohibit DeVry from further violations. Additionally, the U.S. Department of Education (DE) has taken separate action to require DeVry to stop deceptive advertising claims regarding its graduates’ employment success and to implement procedures to insure the truthfulness of post-graduation employment claims. These enforcement actions may open the doors for DeVry graduates to request student loan debt relief.
Marinello Schools of Beauty operates 56 cosmetology schools across five states, including two locations here in San Diego (Miramar and El Cajon). On February 4, 2016 Marinello suddenly shut down all of its locations leaving 4,300 students unable to continue their education and 800 employees out of work.
The sudden shut down came after the US Department of Education denied recertification of Marinello’s eligibility to participate in federal student aid programs. According to the Department of Education website, Marinello was notified on February 1, 2016 that its participation would end effective February 29, 2016. Three days after Marinello received this notification, it shut down all locations.
The recent focus from the Presidential candidates on the economy and the future of student loans has caused me to look at the connection between a rate hike in the Federal Interest Rate the future of student loans, both Private and Federal.
When we speak of student loan debt, we really have to talk in terms of long term debt. With the national average of student loan burden of current graduates exceeding $30,000.00, addressing that debt load and arriving at a manageable student loan debt resolution option will take a long time. Therefore, the effects of any rate increase, even if it is incremental, will have a huge long term negative impact on addressing the repayment of student loans. According to the Wall Street Journal, 97% of experts predict an increase over the next year.
An important factor that sets student loan debt apart from all other kinds of debt is that it’s just about impossible to rid yourself of it. Even borrowers that end up in such financial burdens file for bankruptcy and struggle to get a fresh start void of their student loan debt.
But a few cases working their way through the legal system could alter that. They increase the possibility that the courts might offer a loose definition of how difficult the borrower’s financial situation is before a bankruptcy judge can justify discharging his or her loans.
It’s not just young people struggling to pay back student loan debt but more and more retirees are struggling due to this student loan debt burden. An estimated 700,000 seniors on Social Security are still paying off student loans. Recently nearly 160,000 of these retirees have had their disability and retirement payments garnished to pay down student loan debt.