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Christie_1Prior Student Loan Sidebars have addressed the specific guidance and programs available to help with student loans in bankruptcy.  Some of these features include:

Enrollment in an Income Driven Repayment Plan rather than allowing ED to simply place student loans in a capitalizing forbearance during a Chapter 13 plan. We can do that here in Florida by using the Student Loan Management Program (“SLMP”).  Someone can come out of bankruptcy with years of IDR (Income Driven Repayment) credit toward forgiveness rather than huge balances owed on student loans.

Taking this one step further are new rules that allow a Chapter 13 bankruptcy plan payment to automatically count as an income driven plan payment.  That would allow a consumer to use high medical, mortgage, rent or child care costs when determining a student loan payment amount.  Basically, the holy grail next to a full discharge!  This is stalled by the SAVE injunctions and we don’t know yet whether it will take effect or not.  It does offer simplicity and court guardrails which is good.  It would require little to no effort by the Department of Education – all features that are good in a Trump administration.

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Christie_1It has now been several years since borrowers have had to deal with their student loans – but The Times They are A-Changin’ as Bob Dylan sang in 1964.

This will be a multi-part series on what we are seeing out there now, and what we have found is working to meaningfully decrease student loan debt.  It has gotten much harder over the past year, but it’s still possible in many situations.  As always, you can schedule a Student Loan Strategy Session with us to go over your loan particulars, what options you have and whether you are on the best path forward.  We charge for those sessions, and we’ve been told by a lot of borrowers that it was money very well spent.  We didn’t break the student loan system, (it’s been broken for a decade at least) but we hopefully will have some insight and advice on how to save the most money and see some light at the end of the tunnel.

We will first address some opportunities in bankruptcy that may be overlooked by most.  Then we’ll cover what we are seeing regarding the IDR Recount, forgiveness emails going out now, how to obtain the lowest possible payment for those with Parent Plus loans, and collection news such as whether Social Security is being offset.

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Christie_1One major piece of litigation supported by a non-profit group has just been filed – so it will be awhile before we have any answers.

This legal complaint, filed on September 9, 2025, by the American Federation of Teachers (AFT) and several individual plaintiffs against the U.S. Department of Education and its Secretary, Linda McMahon, alleges that the Department is unlawfully withholding access to and benefits from federal student loan income-driven repayment (IDR) plans and the Public Service Loan Forgiveness (PSLF) program.

Here’s a summary of the key points:

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Christie_1If you are concerned or have questions about how many months you have in IDR credit from past federal student loan payments or even forbearances under the IDR Recount, you can check online here:  (this applies to those with counts toward PSLF as well).  In our opinion, this is a better avenue for an accurate assessment than trying the ombudsman office right now or your servicer.

Step 1) Log in to studentaid.gov

Step 2) Open another browser tab and go to https://studentaid.gov/app/api/nslds/payment-counter/summary

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arkovich_law-narrowWe believe we’ve found a good software solution to upgrade our document collection for bankruptcy.  We are now taking steps to purchase and incorporate this into our system.  Our hope is that it will reduce the time our clients spend obtaining and uploading or sending documents to us, pre-populate the client questionnaire, eliminate the time it takes to convert data to PDF, quickly cure blurry photos or expired IDs and help to organize data and get it where it needs to be.

Not only will this hopefully save our clients’ time, but it should save our firm a great deal of time as well, in areas such as following up on data, transcribing data from place to place, and allowing us to spend more time doing what we do best:  finding solutions to our clients’ debt.

Our team hasn’t changed much over the years — which has been a boon for clients — to always deal with the same person.  Employee turnover is practically non-existent at our firm.  Software tools have changed a lot, and cutting edge stuff really helps keep our costs low and service high.

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Christie_1We are hearing numerous reports of  surprise billing by student loan servicers especially now that SAVE is no longer an option.  Or the checking account is being hit with a standard repayment amount rather than an IBR payment based upon someone’s income.  If f you have permitted auto billing in the past, you may be surprised by a charge out of the blue for an unexpected amount.

A tip to help avoid this situation is to set up a separate checking account to obtain the .25% auto pay deduction.  This will avoid a surprise payment and a cascade of NSF fees that could result.

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Christie_1Folks are reporting that they are being asked to make a large student loan payment – but they in in a long queue waiting for their Income Driven Plan (IDR) application to be processed.   This is happening because if a payment isn’t being made, the loan defaults to the Standard payment plan (which is usually very high).

You need to request administrative forbearance while the IDR application is pending.  It’s supposed to happen automatically, but often doesn’t.  Don’t wait until your credit score is hit to do this please!

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Christie_1So 7.7 million borrowers are in a SAVE forbearance.  That means no payment, no interest since the courts applied the SAVE injunction last July (2024).

Lots of questions about what borrowers should do now.  We just did an interview with ABC Action News this a.m. that will run tonight.  Here’s the link to that story.

If you can’t afford to make any payment now, then stay on the SAVE forbearance as long as you can.  Servicers are beginning to shift people off SAVE forbearance but it may be another month or two before they can get to you.  It’s incredibly unlikely that someone can just stay on a SAVE forbearance long term.  SAVE has ended.  No doubt about that.

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arkovich_law-narrowIf you are encountering collections calls or even a collection lawsuit, sometimes taking the offense is the better route.  For instance, we are seeing usury violations where the rate of interest being charged on its face is 90% APR.  The lawsuit may be filed by a smaller player who you’ve never heard of, who we call debt buyers.

In Florida, the maximum simple interest rate is 18% per year for loans less than $500k, for loans larger than that, the maximum is 25%.  Violations can be severe, and can include all interest voided, and the lender can even face criminal charges.  This may be an important negotiating point, and something that you should carefully raise to avoid making an inadvertent extortion violation yourself.

You may see an interest rate way higher than 18% for credit cards and payday lenders.  Why is that?  Well, they have unique rules is one answer.  Rates can fluctuate based upon default rates, the company’s operating expenses, credit score and card type.  They also can choose to follow another state’s laws which may allow for higher rates.

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arkovich_law-narrowBuy now, pay later options are on the rise.  The most popular players in this space – Klarna, Afterpay, Affirm, and Zip – are everywhere. They’re not just options. They’re default features, embedded into the checkout flow of almost every major retailer.  Even Door Dash now has options which allow you to pay for your burrito later.

Most offer 0% interest and when used responsibly, they can help as a cash flow tool to carry someone until their next paycheck for instance.

It’s easy access, no real credit checks, frictionless credit with a few mouse clicks or phone taps.

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