Student loans

Published on: January 15, 2019

Can I Obtain Federal Student Loans During or After a Bankruptcy?

Generally, approval is needed from the bankruptcy court to take on any new debt in the form of a new federal or private student loan. This would include the filing of a refinance or even a consolidation application – as these are considered new loans.

ECMC, the guarantor of FFEL government backed loans, has a specific policy regarding regaining Title IV eligibility during a bankruptcy. Whether a borrower is in a Chapter 7 or 13, they are required to make six consecutive payments in order to regain Title IV eligibility.

If the student loan debt is not listed, or if it is listed in the bankruptcy, but the plan provides for 0% to be paid to general unsecured creditors, then the borrower is not considered to have established a “satisfactory repayment arrangement” through their bankruptcy plan.

Continue reading →

Published on: January 9, 2019

What Should You Do With Your Federal Student Loans When Furloughed?

By Christie D. Arkovich, P.A.

You still need to pay your student loans when you are furloughed or else you risk a default.

But if you are a federal employee, take this opportunity to ask your servicer to recalculate your IDR plan while you’ve got zero income!! Even if the shutdown ends next week, your zero payment would continue for the remainder of your 12 month plan.

Published on: January 8, 2019

What to Look For In Hiring a Bankruptcy Attorney?

By Christie D. Arkovich, P.A.

When you are thinking about hiring a bankruptcy attorney, what should you consider? – besides all the regular stuff like client reviews, years of practice, cost, availability, knowledgeable, friendliness of attorney and staff etc.

One thing to keep in mind is what other areas does that law firm handle and could that help you fix your situation. As you can see from the chart above, many bankruptcy attorneys just take bankruptcy cases. While that’s fine, most people facing a bankruptcy also have issues with their credit report, foreclosures, debt collection violations, robo calls, student loans etc. We handle all of that. We also have a class action team. One consumer area we don’t handle is vehicles – I don’t know a thing about our lemon laws or other issues regarding vehicles for instance.

I’m not suggesting you hire someone who dabbles in bankruptcy to file your bankruptcy. That is probably the worst thing you can do. But hiring a firm that is experienced in bankruptcy plus the other issues you are facing is probably best. We have over 25 years experience in bankruptcy plus a myriad of other consumer related issues commonly faced by our clients.

Continue reading →

Published on: January 5, 2019

CEC Settlement with States’ Attorneys General: A Huge Step Forward for All Studentkind.

By Christie D. Arkovich, P.A.

In what reads like a Student’s Bill of Rights, a 76 page Assurance of Voluntary Compliance, CEC must clearly and conspicuously disclose to prospective students a “Single-Page Disclosure Sheet” that contains the following information:

the anticipated total direct cost for the program of study at the prospective campus; provided, however, that this provision shall not be interpreted to restrict CEC’s ability to change tuition, fees, or expenses;
the median debt for completers for the program of study for the most recent reporting period, if available;

Continue reading →

Published on: January 3, 2019

Hope Everyone has Recharged and Regrouped After the Holidays!

By Christie D. Arkovich, P.A.

Most of us still use the New Year as an opportunity to review the past year and set goals for the New Year. My own practice has grown tremendously from this goal setting. We target the best strategies to grow our practice and help our clients to get back on track financially.

As most of you know, we practice bankruptcy and foreclosure defense as we have for many years, but since student loan debt has become such a crisis, much of our work is focused on eliminating that debt. We have developed different strategies both inside and outside of bankruptcy to reduce student loan debt.

A new tool we are adding this year involves the misreporting of student loan debt on credit reports. Put quite simply, the student loan servicers often can’t get it right. They send bills with different amounts owed, transfer the debt so often that it appears duplicate times on a credit report, inaccurately reports payments etc. We intend to hold them accountable. Stay tuned as we hope to blog about this regularly to help our readers recognize when their credit reports may be in error and costing them real money – by denied credit or increased cost of credit, insurance etc.

Published on: December 19, 2018

Secretary DeVos Grants $150 Million in Relief to Federal Student Loan Borrowers

By Christie D. Arkovich, P.A.

Since last week’s announcement that the Department of Education was forgiving $150 million in federal student loans, many people have reached out to us to see if they may benefit.

Those who will receive forgiveness under the $150 million announcement are limited to only those borrowers who:

were enrolled when the school closed; or

Continue reading →

Published on: December 18, 2018

As More People Realize It Isn’t Their Fault, More Will Seek to Challenge their Public Service Loan Forgiveness Denial

By Christie D. Arkovich, P.A.

Today, a CNBC reporter Annie Nova, reports and gives an update on our Public Service Loan Forgiveness cases in Florida against Great Lakes and Navient for misrepresentations about the program. Both of these cases are seeking or will seek class action status.

https://www.cnbc.com/2018/12/18/borrowers-denied-public-service-loan-forgiveness-file-lawsuits.html

The number of people who’ve been financially derailed by the public service loan forgiveness program is piling up, and so are the borrowers interested in bringing their servicers to court to seek damages.

Continue reading →

Published on: December 10, 2018

Is the Federal Student Loan Program at Risk of Being Dismantled?

By Christie D. Arkovich, P.A.

In several stunning revelations, Betsy DeVos announced on November 27, 2018 in a press release that the federal government has 1.5 trillion dollars of federal student loan debt (more than credit card debt and auto loans combined). It took 42 years from 1965-2007 for the federal student loan balance to grow to 500 billion dollars and in the last ten years that 500 billion has tripled. However, that wasn’t the surprising part.

Only 24% of federal student loan borrowers are currently paying down both principal and interest. Nearly 20% of all loans are delinquent or in default. Those are very high numbers.

To compare, that’s seven times the rate of delinquency on credit card debt.

Continue reading →

Published on: December 7, 2018

Employers Starting to Take Up the Slack to Communicate Options to Alleviate Student Loan Crisis

By Christie D. Arkovich, P.A.

A recent GAO report showed just how poor of a job that the Department of Education and its various servicers are doing in communicating and explaining options to reduce student loan debt. This is the primary reason why so many people are being declined Public Service Loan Forgiveness. So I’d like to recognize and thank employers and schools that are picking up the torch and helping to get student loan relief for their employees.

This week, Blue Pearl Veterinary Partners, allowed me the opportunity to join Ken Russell of Principal Life to help explain student loan options to their interns at their veterinary hospitals. Turns out veterinaries have doctor sized student loans but not doctor sized pay. My aunt is employed by Mercy/Methodist hospital up north which is now giving out resources to its employees to help them understand and apply for income driven plans. I commend employers who recognize that we are in a student loan crisis and have taken the time to help get needed information to their employees. This year, we also put on a seminar for upcoming graduates of University of Tampa on what to expect and how to minimize their student debt. Both employers and schools see the problem.

Relying only on the Department of Education and their array of servicers is turning out to be a miscalculation that is costing former students their future. The servicers pay their customer service employees more money to cut calls short – short call durations = bonuses. If sued, the servicers claim that they do not represent the borrowers, they represent the student loan creditors. And finally, both the servicers and the Department of Education argue that the federal Higher Education Act preempts any state consumer protection laws. We do not believe that is true and the issue is up on appeal right now in the Eleventh Circuit.

Continue reading →

Published on: December 6, 2018

What to do if you don’t know who to believe about your student loan options.

By Christie D. Arkovich, P.A.

I’m still seeing a ton of misinformation out there. A perfect example of this is someone who consulted with us yesterday and granted us permission to tell her story to hep others.

First, this client, we’ll call her Debbie, is a retired teacher who had $73,000 in Parent Plus loans. She was told two different (what I can only say were lies at this point). First, her servicer told her that if she didn’t pay her Parent Plus loans, her son would be responsible for them. Not true.

Second, even though she was a teacher, she was told that she would not qualify for Public Service Loan Forgiveness. While this may have been technically true under her former loan types, the servicer conveniently omitted the fact she could consolidate and apply for ICR in order to qualify for PSLF. Omissions are usually seen as another form of a lie. The borrower is left with the false impression that nothing can be done and they are stuck. Keep in mind that the Public Service Loan Forgiveness Program was created specifically to encourage people to obtain degrees, often expensive Masters’ degrees, and go into the lower paid education field.

Continue reading →