Student loan | FACTSHEET: Making Student Loans More Affordable | The White ...

Student loan | FACTSHEET: Making <b>Student Loans</b> More Affordable | The White <b>...</b>

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FACTSHEET: Making <b>Student Loans</b> More Affordable | The White <b>...</b> Posted: 09 Jun 2014 04:55 AM PDT The White House Office of the Vice President For Immediate Release June 09, 2014 President Obama declared 2014 a year of action – vowing to use the power of his pen and phone to help ensure that hardworking Americans have the opportunity to succeed. And this week will be no different. With a focus on supporting hardworking Americans and upholding our country's commitment to provide a quality education for all of our students, the President is again taking action. Today, he will deliver remarks at the White House, announcing new executive actions to further lift the burden of crushing student loan debt, including a Presidential Memorandum that will allow an additional 5 million borrowers with federal student loans to cap their monthly payments at just 10 percent of their income. A fact sheet detailing these new steps is below. Tomorrow the President will do a live Q and A with Tumblr, answering questions directly from consumers across the country about this crucial issue. At both of those events, and throughout this week ahead of their upcoming vote, the President will use every opportunity to urge Congress to do their part by passing Senate Democrats' bill to help more young people save money by refinancing their federal student loans. From reforming the student loan system and increasing Pell Grants to offering millions of students the opportunity to cap their monthly student loan payments at 10 percent of their income, making a degree more affordable and accessible has been a longtime priority for the President. But he knows there is much more work to do and that's what this week is all about. FACTSHEET: Making Student Loans More Affordable A postsecondary education is the single most important investment that Americans can make in their futures. Higher education results in higher earnings and a lower risk of unemployment, but for too many low- and middle-income families this essential rung on the ladder to opportunity and advancement is slipping out of reach.  Over the past three decades, the average tuition at a public four-year college has more than tripled, while a typical family's income has barely budged.  More students than ever are relying on loans to pay for college.  Today, 71 percent of those earning a bachelor's degree graduate with debt, which averages $29,400.  While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement. The President and his Administration have a long track record of taking steps to make college more affordable and accessible for families. And as part of his year of action to expand opportunity for all Americans, the President is committed to building on these efforts by using his pen and his phone to make student debt more affordable and more manageable to repay.   Today the President will use the power of his pen to help millions of borrowers afford their student loan payments. He will sign a new Presidential Memorandum directing the Secretary of Education to propose regulations that would allow nearly 5 million additional federal direct student loan borrowers the opportunity to cap their student loan payments at 10 percent of their income.  The Presidential Memorandum also outlines a series of new executive actions aimed to support federal student loan borrowers, especially for vulnerable borrowers who may be at greater risk of defaulting on their loans. Today the President will also reiterate his call for the Senate to pass legislation that could help an estimated 25 million Americans refinance outstanding student loans at lower interest rates, the same as those available to federal student loan borrowers taking out loans this year.  This move could save a typical student $2,000 over the life of his or her loans.  The Challenge of Student Debt:  The challenges of managing student loan debt can lead some borrowers to fall behind on their loan payments and in some cases even default on their debt obligation, with such consequences as a damaged credit rating, losing their tax refund, or garnished wages. Because credit ratings are increasingly scrutinized in making employment offers, financing a home, or even opening a bank account, a damaged credit rating can further reduce borrowers' ability to repay their loans.   Today's actions build on the Administration's significant progress in creating flexible repayment options for borrowers and raising awareness about the steps borrowers can take to responsibly manage their debt.  Capping Student Loan Payments at 10 Percent of Income: Today, the President will direct the Secretary of Education to ensure that student loans remain affordable for all who borrowed federal direct loans as students by allowing them cap their payments at 10 percent of their monthly incomes.  The Department will begin the process to amend its regulations this fall with a goal of making the new plan available to borrowers by December 2015. With legislation passed by Congress and signed by the President in 2010 and regulations adopted by the Administration in 2012, most students taking out loans today can already cap their loan payments at 10 percent of their incomes.  Monthly payments will be set on a sliding scale based upon income.  Any remaining balance is forgiven after 20 years of payments, or 10 years for those in public service jobs. However, this Pay As You Earn (PAYE) option is not available to students with older loans (those who borrowed before October 2007 or who have not borrowed since October 2011), although they can access similar, less generous options.  No existing repayment options will be affected, and the new repayment proposal will also aim to include new features to target the plan to struggling borrowers. This executive action is expected to help up to 5 million borrowers who may be struggling with student loans today.  For students that need to borrow to finance college, PAYE provides an important assurance that student loan debt will remain manageable.  Because the PAYE plan is based in part on a borrower's income after leaving school, it shares with students the risk of taking on debt to invest in higher education. Many student loan borrowers are working and trying to responsibly make their monthly payments, but are nonetheless struggling with burdensome debt.  For example, a 2009 graduate earning about $39,000 a year as a fourth year teacher, with student loan debt of $26,500, would have his or her initial monthly payments reduced by $126 under the President's Pay As You Earn plan compared with monthly payments under the standard repayment plan and would see a reduction in annual loan payments of over $1,500. Doing All We Can to Help Students Repay their Loans: The President today will also direct the Secretaries of Education and the Treasury to work together to do all they can to help borrowers manage their student loan debts. Specifically, the Departments will: Strengthen Incentives for Loan Contractors to Serve Students Well: The Department of Education administers the federal student loan program through performance-based contracts with private companies awarded through a competitive process.  Rather than specifying every step of the servicing process, as was done in the guaranteed loan program that ended in 2010, these contracts provide companies with incentives to find new and innovative ways to best serve students and taxpayers and to ensure that borrowers are repaying their loans.  Today, the Department announced that it will renegotiate its contracts with federal loan servicers to strengthen financial incentives to help borrowers repay their loans on time, lower payments for servicers when loans enter delinquency or default, and increase the value of borrowers' customer satisfaction when allocating new loan volume.  These changes will improve the way that servicers are compensated to better ensure high-quality servicing for student loan borrowers.     Ensure Active-Duty Military Get the Relief They Are Entitled to: The Servicemember Civil Relief Act requires all lenders to cap interest rates on student loans – including federal student loans -- at 6 percent for eligible servicemembers.  The Department of Education already directs its loan servicers to match their student borrower portfolios against the Department of Defense's database to identify eligible active-duty servicemembers.  Now, the Department of Education will reduce those interest rates automatically for those eligible without the need for additional paperwork. It will also provide additional guidance to Federal Family Education Loan program servicers to provide for a similar streamlined process.   Work with the Private Sector to Promote Awareness of Repayment Options: The Secretary of the Treasury and the Secretary of Education will work with Intuit, Inc. and H&R Block, two of the U.S.'s largest tax preparation firms, to communicate information about federal student loan repayment options with millions of borrowers during the tax filing process — a time when people are thinking about their finances. The Administration is continuing its partnership with Intuit. through its TurboTax product, which serves around 28 million tax filers.  The Administration will also form a new partnership with H&R Block, serving approximately 15 million tax filers through its 11,000 retail locations, and an additional 7 million tax filers through its digital tax products. Partnerships like these will give us the opportunity to provide information about federal student loan repayment, building upon our work during the most recent tax season by exploring different messages and the timing of information to best help borrowers in evaluating their federal loan repayment options. In addition, the Administration will work with Intuit to explore ways to communicate with federal student loan borrowers through Intuit's free personal financial management product, Mint.com. Mint is used by 15 million people for financial management and advice, and partnering with Mint provides the opportunity to communicate with their 15 million users about income-driven repayment options. Mint includes the capability to provide personalized information about federal loan repayment options, based upon the information that a user has already provided to Mint. Use Innovative Communication Strategies to Help Vulnerable Borrowers: Too many borrowers are still unaware of the flexible repayment options currently available to them, especially when they run into difficulties in managing their payments.  The Department of Education is redoubling its efforts to identify borrowers who may be struggling to repay and provide them with timely information about their options supporting them through the repayment process and helping them avoid or get out of default.  Last year, the Department's efforts led to more than 124,000 borrowers enrolling in an income-driven repayment plan like Income-Based Repayment or the Pay As You Earn plan Moving forward, the Department of Education will test new ways to reach 2.5 million borrowers with the greatest risk of encountering payment difficulty, such as borrowers who have left college without completing their education, missed their first loan payment, and those who have defaulted on low balances loans to get them back on track with their loan payments.  The Department will also evaluate these strategies to identify which can be used on a larger scale and which are the most effective. Promote Stronger Collaborations to Improve Information for Students and Families: All student borrowers are required to receive loan counseling when they first borrow federal student loans and when they leave school, but little is known about the effectiveness of these programs.  Working with student debt researchers and student advocates, the Department of Education and the Department of Treasury will also develop and launch a pilot project to test the effectiveness of loan counseling resources, including the Department of Education's Financial Awareness Counseling Tool.  The lessons learned will be considered for future actions by the Department and shared with outside partners like the National Association of Student Financial Aid Administrators to improve loan counseling activities at colleges and universities throughout the country.  Another way to reach student borrowers is by working with professional associations to provide customized information about repayment options.  Today, the Administration is announcing its commitment to work with the American Federation of Teachers, National Education Association, American Association of Colleges of Nursing, American Association of Nurse Practitioners, American Nurses Association, American Association of Physician Assistants, Business Forward, City Year, National Association of Social Workers, Physician Assistants Education Association, SEIU and the YMCA of the USA to provide comprehensive information about repayment options and federal student aid resources that are available to them. Moving forward, the Administration will continue to engage organizations, institutions of higher education, and others to ensure that all borrowers have access to the resources and information they need to responsibly manage the repayment of their student loans. Additional Actions to Reduce Indebtedness and Promote College Affordability: Helping Students and Families Access Education Tax Benefits. In addition to helping borrowers manage their student loan debt, the Department of Education and the Department of Treasury will also work together to educate students, families, financial aid administrators, and tax preparers to ensure that all students and families understand what education tax benefits they are eligible for and receive the benefits for which they qualify.  In 2009, the President created the American Opportunity Tax Credit (AOTC), which provides up to $2,500 to help pay for each year of college. But the process of claiming education tax credits like the AOTC can be complex for many students, including for the 9 million students who receive Pell Grants, and hundreds of millions of dollars of education credits go unclaimed each year.  To help address this complexity, the Department of Treasury will release a fact sheet clarifying how Pell Grant recipients may claim the AOTC.

<b>Student Loan</b> Debt, Like Gates, Federal Trade Secret Legislation Posted: 14 Aug 2014 05:30 PM PDT Before jumping into the Top 10, I wanted to point out I had the privilege of having Troy Rosasco join me on LXBN TV to discuss what he's doing to help 9/11 recovery workers and their families—as the event is still having a devastating impact on many of them. In the top 10, Robert Milligan has an excellent piece on the push for federal trade secret legislation. Media reports on student loan debt: distortions abound – Philadelphia lawyer John Culhane, Jr. of Ballard Spahr on the firm's CFPB Monitor Is that Cute Baby Photo Really PHI? Calming the HIPAA Hullabaloo – Princeton, NJ lawyer Elizabeth Litten of Fox Rothschild on the firm's blog, HIPAA, HITECH & HIT Asking the Questions that Matter – Dykema Chairman & CEO Peter Kellett on his blog, The Business of Serving Clients New Executive Order = New Burdens for Government Contractors – Baltimore lawyer Eric Hemmendinger of Shawe Rosenthal on the firm's blog, The Labor & Employment Report "Like-Gated" Promotions No Longer Permissible on Facebook – Shannon Harrell on the InfoLawGroup blog Reluctant Rakoff Approves $285 Million Citigroup "No-Contest" Settlement With The SEC, But Not Without Getting The Last Word – Lawrence E. Ritchie and Raphael Eghan of Osler on the firm's blog, Risk Management & Crisis Response What's Happening with Whistleblowing? – Boston attorney Chip Phinney of Mintz Levin on the firm's blog, Securities Litigation & Compliance The rise of cross-border M&A – Toronto lawyer Troy Ungerman of Norton Rose Fulbright on the firm's blog, Deal Law Wire Success: Want More? Get Comfortable Outside Your Comfort Zone – Dallas, Texas attorney coach Cordell Parvin on the Cordell Parvin Blog For more of the best, check out LXBN, a complete review of the top insight and commentary across the LexBlog Network Copyright © 2014, Kevin O'Keefe. All Rights Reserved. Strategy, design, marketing & support by LexBlog

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Student loan | These Private Student Loans Can Be Easily Discharged in Bankruptcy

Student loan | These Private <b>Student Loans</b> Can Be Easily Discharged in Bankruptcy

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These Private <b>Student Loans</b> Can Be Easily Discharged in Bankruptcy Posted: 24 Jul 2013 08:43 AM PDT 3:12-ap-03171 – Davidson This loan was incurred to pay tuition and expenses for the Debtor's participation in Co-Active Coach Training Program and Co-Active Leader Program at the Coaches Training Institute (hereinafter "CTI"). After completing CTI's Co-Active Coach Training Program Debtor had her doubts about the quality of the program because a large portion of each seminar was devoted to selling the "students" attending the "class" on purchasing additional classes from the "school", which is how Debtor ended up purchasing her second program from CTI, the Co-Active Leader Program. Debtor's participation in the program was officially terminated on or about February 27, 2009, and confirmed in writing by a letter to CTI. Defendant's Claim Does Not Meet Definition for Exemption Under §523(a)(8) Despite having paid $941.26 in interest on the Defendant's loans in 2009, $769.20 in 2010, and $1084.84 in 2011. Defendant's loan servicer has informed Debtor that her loans were "ineligible for a tax deduction" see EXHIBIT A, attached hereto. Upon further investigation by Debtor's attorney, Debtor does not believe her loan to the Defendant meets requirements for the exemption from discharge provided under §523(a)(8) of the Bankruptcy Code. Specifically, Debtor does not believe that her loan meets the definitional requirements for exemption because she does not believe the loan was made for "qualified higher education expenses", that CTI was an "eligible educational institution," and does not believe that she was an "eligible student" as those terms are defined by 26 USC 221(d) which is referred in §523(a)(8)(B) for the discharge of "qualified educational loans." – Source Results Sallie Mae loan is fully discharged in bankruptcy. – Source Need Student Loan Assistance? Click Here Not All Student Loans are Alike Granted, it is more difficult to discharge student loans in bankruptcy. But loans which were used for training or some types of education at organizations that were not eligible financial institutions may not be classified as student loans in a bankruptcy filing. For a loan to be qualified as a "student loan" it must: For a loan to fall with this section, (1) it must have been made under a government or nonprofit student loan program, or (2) it must be a qualified educational loan under section 221(d)(1) of the Internal Revenue Code, for attending an eligible education institution as defined in section 221(d)(2) of the Internal Revenue Code, and incurred for costs of attendance as defined in section 472 of the Higher Education Act. As bankruptcy attorney Craig Andresen says, "For example, perhaps you were not an "eligible student" at the time the private student loan was made to you; or maybe the loan was not incurred to pay "qualified education expenses"; or perhaps the loan was not for attendance at an "eligible education institution" because the school was not accredited under Title IV of the Higher Education Act. All these are requirements imposed by section 221(d) of the Internal Revenue Code. Failure of a private student loan to meet any of these criteria means that the loan is fully dischargeable, because it would not qualify under section 523(a)(8) of the bankruptcy law." – Source What These Dischargeable Loans Look Like Let's look at those section that describe what an "eligible education institution" or "qualified education loan" really is. According to this bankruptcy code section the loan may not be automatically discharged: (8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for– (A) (i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual; 221(d)(1) & (2) Let's look first at what section 221(d)(1) says: d) Definitions For purposes of this section— (1) Qualified education loan The term "qualified education loan" means any indebtedness incurred by the taxpayer solely to pay qualified higher education expenses— (A) which are incurred on behalf of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred, (B) which are paid or incurred within a reasonable period of time before or after the indebtedness is incurred, and (C) which are attributable to education furnished during a period during which the recipient was an eligible student. Such term includes indebtedness used to refinance indebtedness which qualifies as a qualified education loan. The term "qualified education loan" shall not include any indebtedness owed to a person who is related (within the meaning of section 267 (b) or 707 (b)(1)) to the taxpayer or to any person by reason of a loan under any qualified employer plan (as defined in section 72 (p)(4)) or under any contract referred to in section 72 (p)(5). Section 221(d)(2) says: 2) Qualified higher education expenses The term "qualified higher education expenses" means the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, 20 U.S.C. 1087ll, as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) at an eligible educational institution, reduced by the sum of— (A) the amount excluded from gross income under section 127, 135, 529, or 530 by reason of such expenses, and (B) the amount of any scholarship, allowance, or payment described in section 25A (g)(2). For purposes of the preceding sentence, the term "eligible educational institution" has the same meaning given such term by section 25A (f)(2), except that such term shall also include an institution conducting an internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility which offers postgraduate training. I Know This is Boring But Keep Going According to the code, schools that are able to be discharged DO NOT meet the following criteria in section 472 of the Higher Education Act of 1965, 20 U.S.C. 1087ll (a) Institution of higher education For purposes of this chapter, other than subchapter IV, the term "institution of higher education" means an educational institution in any State that— (1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, or persons who meet the requirements of section 1091 (d) of this title; (2) is legally authorized within such State to provide a program of education beyond secondary education; (3) provides an educational program for which the institution awards a bachelor's degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree, or awards a degree that is acceptable for admission to a graduate or professional degree program, subject to review and approval by the Secretary; (4) is a public or other nonprofit institution; and (5) is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for the granting of preaccreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time. (b) Additional institutions included For purposes of this chapter, other than subchapter IV, the term "institution of higher education" also includes— (1) any school that provides not less than a 1-year program of training to prepare students for gainful employment in a recognized occupation and that meets the provision of paragraphs (1), (2), (4), and (5) of subsection (a) of this section; and (2) a public or nonprofit private educational institution in any State that, in lieu of the requirement in subsection (a)(1), admits as regular students individuals— (A) who are beyond the age of compulsory school attendance in the State in which the institution is located; or (B) who will be dually or concurrently enrolled in the institution and a secondary school. For purposes of this section and section 1002 of this title, the Secretary shall publish a list of nationally recognized accrediting agencies or associations that the Secretary determines, pursuant to subpart 2 of part G of subchapter IV of this chapter, to be reliable authority as to the quality of the education or training offered. To make things easier, The Department of Education maintains a list of institutions online which you can search. Search Here This would be the first place to look to see if the school you attended is on the list. In the examples I provided earlier, neither training provider is found by searching. If the school you attended IS NOT found by searching the list above then that would be an initial clue your private students may be fully dischargeable. You should discuss this with your bankruptcy attorney. You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Just Because a School Offers Loans They May Still be Discharged Here is an example of a school which is offering Sallie Mae SLM Financial loans to pay for flight training. Silverhawk Aviation Academy says, "Silverhawk Aviation Academy is one of only a handful of helicopter schools who is very fortunate to be able to continue to offer SLM Financing to our qualified students for their flight training loans. The Sallie Mae Smart Option Student Loan® is an ideal solution for students who still need funds after they have maximized free money and federal loans. With this loan, students can borrow up to the full cost of their education, less other aid received." – Source As of the publication of this article Silverhawk Aviation Academy is not on the list of accredited schools from the Department of Education. Or how about TekSeekers IT Training. This company says students can apply for a technology training loan through Sallie Mae SLM Financing but they are not on the list either. – Source SLM Financial To confirm my findings I went and looked at loans included in 2011 bankruptcy filings for SLM Financial and sure enough, more discharges were granted for non-eligible institutions. 3:11-03295-tmb – Brown The loans alleged in Paragraph 4 were to "WINGS/CASCADES-SPIRIT FLT", with Sallie Mae School Code 6012170000. This flight school is not (and was not at the time of the loan) an eligible education institution within the meaning of 26 USC 221(d)(1) and (2). The fact that the student loan in question was not to an "eligible education institution" under 26 USC 221(d)(1) and (2) means that the debt is not "qualified education loan(s)" under 11 USC 523(a)(8)(B), and therefore is dischargeable. – Source [The school was "Wings of the Cascades Spirit Flight"] Results Plaintiffs are indebted to Sallie Mae pursuant to the applicable terms of one (1) Career Training Loan Promissory Note ("Promissory Note"), disbursed on January 3, 2007. As of October 11, 2011, there was a balance due and owing under the Promissory Note, including principal, interest and fees, in the amount of $42,693.09. Plaintiffs' liability on the debt owed to Sallie Mae, arising from the Promissory Note referenced herein above, is hereby rendered dischargeable upon the grant of a general discharge in the Plaintiffs' main bankruptcy case. – Source But Don't Lose Hope Yet If your school is on the list some of your private student loans may still be discharged if they were used for expenses that were not "qualified higher education expenses." That part of the student loan may and should be discharged. A qualified higher education expense is defined as: (3) Qualified higher education expenses (A) In general The term "qualified higher education expenses" means— (i) tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution; (ii) expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance [2] (iii) expenses paid or incurred in 2009 or 2010 for the purchase of any computer technology or equipment (as defined in section 170 (e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution. Clause (iii) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. (B) Room and board included for students who are at least half-time (i) In general In the case of an individual who is an eligible student (as defined in section 25A (b)(3)) for any academic period, such term shall also include reasonable costs for such period (as determined under the qualified tuition program) incurred by the designated beneficiary for room and board while attending such institution. For purposes of subsection (b)(6), a designated beneficiary shall be treated as meeting the requirements of this clause. (ii) Limitation The amount treated as qualified higher education expenses by reason of clause (i) shall not exceed— (I) the allowance (applicable to the student) for room and board included in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll), as in effect on the date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001) as determined by the eligible educational institution for such period, or (II) if greater, the actual invoice amount the student residing in housing owned or operated by the eligible educational institution is charged by such institution for room and board costs for such period. – Source So as an example, if you attended a qualified educational institution but were not at least half-time it appears an argument could be made to discharge room and board expenses. Or if you used part of your student loan for living expenses outside of room and board, those may be be eligible for discharge as well. This would also apply to money paid from student loans for: Discretionary college costs, like those associated with intramural sports teams or sororities and fraternities Transportation expenses, such as gas for those who commute to school or airfare to fly home for the holidays. A laptop or computer isn't considered a qualified education expense unless it is required by the college or for a course. Dorm room supplies like the bed sheets and a mini-fridge, don't qualify, unless they're charged to the student by the university. Off-campus housing (rent and food) that exceeds the estimated off-campus expenses published by the university. Textbooks are qualified education expenses, but a study guide not included on the required course list may not be. Furnishing an apartment is not part of room and board. SAT or ACT testing. School sponsored travel. Internet access not billed through the school. Workshops at school if not enrolled. The list above are examples but it is certainly not exhaustive. You would need to evaluate what you specifically spent your student loan on. Need Student Loan Assistance? Click Here Don't Assume Your Private Student Loan is Not Dischargeable It would be a complete mistake to not assume part or all of any private student loan is not dischargeable or allowed to be eliminated in a bankruptcy filing. This is an emerging area and there are frankly not that many people familiar with this topic. The general assumption is that private student loans are not dischargeable in bankruptcy and that would be both factually and practically wrong. As I've demonstrated to you, some can be. For more information on dealing with student loans in bankruptcy, see the articles below. Discharge Your Student Loans in Bankruptcy How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try. A Look at Sallie Mae and Other Student Loans Discharged in Bankruptcy in 2012 Federal Student Loans Discharged in Bankruptcy. A Look at the Surprising 2012 Data and Cases. These Private Student Loans Can Be Easily Discharged in Bankruptcy All Student Loan Bankruptcy Discharge Articles Get Out of Debt Guy – Twitter, G+, Facebook If you have a credit or debt question you'd like to ask just use the online form. I'm happy to help you totally for free. These Private Student Loans Can Be Easily Discharged in Bankruptcy by Steve Rhode

USAvsDEBT, USDC <b>Student Loan</b> Services and <b>Student Loan</b> <b>...</b> Posted: 15 Nov 2013 08:48 AM PST The Association for Student Loan Relief has shared new member flocking to the association focused on selling student loan relief services to consumers. Current members include AP Student Loan Relief, Action Financial, Debt.org, Student Loan Consolidation Center, American Student Loan Consolidators, US Student Loan Services, USAvsDebt, USDC Student Loan Services, Frontline Debt Services. – Source As always, for consumers who are doing business with any debt relief company they may not be familiar with I always urge they check out the company first. Here are a few of my free guides to do this. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off Not being familiar with the three new members I took a cursory look at them. But I would be ever so grateful if any consumer using their services could provide feedback of their experience in the comments below. USAvsDEBT 100 Highland Park Village Suite 200 Dallas, TX 75205 The address is a virtual office managed by Regus. – Source The State of Texas website does not show a company named USAvsDebt, Inc. but does show a company named USA Versus Debt, Inc. That company states it is actually located at 5890 Grossetto Drive, Frisco, Texas. The company president is Valerie Edwards. – Source USAvsDebt claims they "provide financial and spiritual freedom suited to your long term goals. We provide debt reduction thus enabling our client's peace of mind." – Source USDC Student Loan Services 4695 MacArthur Court 11th Floor Newport Beach, CA 92660 The address is a virtual office managed by Regus. – Source The State of California website could not locate any company registered to do business under the name USDC Student Loan Services. However the website for USDC Student Loan Services identified the company as USDC Consulting, LLC who is registered in California as of August 6, 2013. No company officers are identified. Oddly they also identify themselves as US Debt Co. Even their domain ownership is hidden so it is not possible to identify the officers or members behind this company using public records. As of 8-17-2013 the owner of the domain usdcstudent.com was listed as Joshua Brown at 220 Newport Center Drive Suite 11-569, Newport Beach, California. Student Loan Consolidation Center 210 North University Drive Suite 800 Coral Springs, FL 33071 When I looked up the street view of this building I instantly recognized it as the same building Military Det Management was located in. See this article. Small world. The Student Loan Consolidation Center raised a couple of red flags. They are using an Obama video on the front page, a process that was frowned upon in debt settlement marketing and they say "Student Loan Consolidation Center works with the Department of Education" which could be misconstrued that they have some official relationship which I doubt they do. – Source According to the State of Florida, Student Loan Consolidation Center is an LLC and the managers are Monetary Management Systems, Inc. and Clutch Marketing. These managers replaced BT Breazeale, II and Christopher Young on July 12, 2013. – Source Interestingly these previous articles questioned the relationship of a Young and Breazeale to Military Debt Management. The company was registered in Florida on February 18, 2013. Clutch Marketing, Inc has Christopher Young at its president. Thomas Breazeale, III is the president of Monetary Management Systems according to the State of Florida. The company was previously called American Mutual Financial Management. Get Out of Debt Guy – Twitter, G+, Facebook If you have a credit or debt question you'd like to ask just use the online form. I'm happy to help you totally for free. USAvsDEBT, USDC Student Loan Services and Student Loan Consolidation Center Signup by Steve Rhode

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Student loan | How to Really Discharge Your Student Loans in Bankruptcy. Many ...

Student loan | How to Really Discharge Your <b>Student Loans</b> in Bankruptcy. Many <b>...</b>

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How to Really Discharge Your <b>Student Loans</b> in Bankruptcy. Many <b>...</b> Posted: 05 Jan 2013 10:20 AM PST For years we've all heard the same message that it's near darn impossible to discharge student loans in bankruptcy. We've heard that the undue hardship standards make it so onerous that expecting a student loan discharge is all but an act of God. But what if that belief was actually more myth than fact? Recently Jason Iuliano, (J.D. Harvard Law School; Ph.D. Student in Politics, Princeton University) took an emperical look at the reality of student loan discharges in bankruptcy and his results, are, well, shocking. What Iuliano found was that the reality of student loan discharge in bankruptcy was that four out of ten that attempted to discharge their loans were successful. Granted, a 40 percent rate is not success for the majority, but it's not inconsequential either. More disturbingly he found that in just the one study year, 69,000 debtors would have been good candidates to receive some or full relief from their student loan debt but they never even tried to discharge the loans. In fact few ever try to discharge their student loans in bankruptcy. "99.9 percent of student loan debtors in bankruptcy never attempt to get a discharge," says Iuliano. It is possible to discharge student loans in bankruptcy. – Click to Tweet The research found that consumers that were able to successfully discharge their student loans in bankruptcy under the undue hardship standard had these three characteristics. Less likely to be employed. More likely to have a medical hardship. More likely to have lower annual incomes the year before they filed for bankruptcy. After studying previous bankruptcy filings, Iuliano stated, "Incredibly, only [one-tenth of one percent] of student loan debtors who have filed for bankruptcy attempt to discharge their student loans." – You can read full study here. In order to pursue a successful claim to discharge the loans in bankruptcy a student loan holder should be able to show (1) a current inability to repay the loans, (2) a future inability to repay the loans, and (3) a good faith effort to repay the loans. Many can easily do that. A review of the results obtained by filers shows the majority of those approved for student loan discharge, received a full or partial discharge of their student loan debt. Need Student Loan Assistance? Click Here So Why Don't More Even Try? There are a number of factors which could explain why so few consumers attempt to discharge their student loans under bankruptcy. The first reason and probably the most prevailing is the apparent urban myth that student loans can't be discharged under bankruptcy. The reality of the results Iuliano uncovered is quite different. Second, it's quite possible that student loan collectors and the media tell consumers that there is no sense pursuing bankruptcy since student loans can't be discharged so they never attempt to. Third, a wide number of bankruptcy attorneys are convinced that student loans can't be discharged under bankruptcy and never even try to include them or pursue an adversary hearing to go for the discharge. Admittedly, I've held this old assumption as well and have said for years that an undue hardship discharge is not possible for many. It wasn't until reading this most recent research released in September of 2012 that proof has been shown otherwise. Attempts by a wider number of consumers to discharge their student loans may not be as successful as the sample studied since more people with higher incomes and less of a demonstrable hardship may now pursue a discharge of their student loans. But maybe more will attempt to discharge their student loans through this process and tens of thousands of people will be successful that would never have even attempted such relief. The study author also postulated why so few try: Nonetheless, an important question remains: why do so few people in bankruptcy attempt to discharge their student loans? A couple reasons likely account for this phenomenon. First, the view that student loan discharges are nearly impossible to obtain may be a self-fulfilling prophecy. As mentioned earlier, journalists and academics have long asserted that it is nearly impossible to meet the undue hardship standard. If debtors take these comments to heart and believe that their chances of success are trivial, they will be less likely to attempt to discharge their educational debt. Judges grant so few discharges simply because they hear so few student loan cases. Unfortunately, with judges granting so few discharges, commentators feel even more justified in arguing that the undue hardship requirement is too harsh. Thus, the cycle continues. A second reason that people may choose not to pursue discharges is that they do not have money to pay an attorney. Because the adversary proceeding is essentially a trial, debtors may believe that they need an attorney in order to win. Quite reasonably, they do not think they will be able to represent themselves against a large company such as Sallie Mae or Wells Fargo. My study, however, shows that a debtor can be successful without an attorney. In fact, after controlling for other factors, I found that there was no statistical difference in outcome between pro se debtors and debtors represented by an attorney. As bankruptcy attorney Gary Armstrong stated in a recent post on this subject, "The main lesson from the findings is the minimal participation by debtors. Surprisingly, less than one tenth of one percent of debtors who file for bankruptcy even attempt to have their student loans discharged." – Source Here is the bottom line, more consumers should pursue a student loan discharge in bankruptcy. While the majority may not receive a discharge, a large number that don't even try would receive a substantial benefit or relief to allow them to move forward with their financial lives. Reality Check: The reality is that the cost of fighting the student loan lender for a rightful elimination of student loan debt can be an expensive process that many who file bankruptcy can't afford to pursue. The bottom line here is that if you have student loans you should discuss this article and these issues with your bankruptcy attorney to clearly and specifically understand what it would take for you to fight for a discharge of your student loans. Even a number of those that pursued a full discharge of their debt, that were not discharged by the court, were able to come to an agreement with their student loan lender to settle their loan balance instead. Either way, that's a victory for consumers with unmanageable student loan debt. If you find a bankruptcy attorney that says it's not possible to discharge your student loans, send them the link to this article and let's help open their eyes to the research. If you need help finding a local bankruptcy attorney, you can always use this free online bankruptcy attorney directory. For more information on dealing with student loans in bankruptcy, see the articles below. Discharge Your Student Loans in Bankruptcy How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try. A Look at Sallie Mae and Other Student Loans Discharged in Bankruptcy in 2012 Federal Student Loans Discharged in Bankruptcy. A Look at the Surprising 2012 Data and Cases. These Private Student Loans Can Be Easily Discharged in Bankruptcy All Student Loan Bankruptcy Discharge Articles Update Another approach that has worked for discharging student loans in bankruptcy is for private student loans that are outside their statue of limitations and time barred. In this case the private student loans can be eliminated in a regular bankruptcy without any adversarial proceedings as needed with the approach outlined above. Additionally many private student loans were bundled and sold, much like mortgages were. If pressed it might be very hard for the true ownership to be legally proven. That is a much more complicated course of action but I believe we will see this develop into a bigger issue. A successful approach for those that are having a tough time with private student loan payments is to consider talking to bankruptcy attorney and explore a chapter 13 bankruptcy where the student loan payments are included. In some areas the payments can be reduced. In general the bankruptcy will stop all collection activity and potentially fees for the five years you would be in a chapter 13 bankruptcy. Hopefully the laws will change in the years ahead and private student loans will be dischargeable again as they were before 2005. For government backed student loans, read The Ultimate Guide to Dealing With Student Loans You Can't Afford. Update July 7, 2013 A recent appeals court ruling supported discharge of student loans in bankruptcy. Read Big Case Proving Ability to Discharge Student Loans in Bankruptcy. Get Out of Debt Guy – Twitter, G+, Facebook How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try. by Steve Rhode

Senate plan could help grads pay off <b>student loans</b> - Jordan-Marie <b>...</b> Posted: 06 Aug 2014 06:10 PM PDT This legislation could affect more than 15 million people under 30 with student loan debt. | Getty For many students returning to college this fall, there's a major nagging issue: the mountain of debt they'll face after graduation. Official Washington, from the White House to Capitol Hill, has been struggling to find ways to make college more affordable. One bipartisan solution offered this summer by Sens. Marco Rubio (R-Fla.) and Mark Warner (D-Va.) is designed to streamline the repayment and management of federal student loans. Continue Reading For instance, student borrowers would be enrolled in automatic payroll deductions each month, with 10 percent of a graduate's paycheck able to be deducted with a $10,000 exemption annually. That could make a huge difference for the more than 15 million people under 30 with student loan debt. The average loan balance for those borrowers climbed over $20,000 in late 2011 and has been growing ever since, according to data from the New York Federal Reserve. Altogether, student loan debt now tops $1.2 trillion. (Sign up for POLITICO's Morning Education tip sheet) "I think the Rubio-Warner policy will simplify the process of repayment, but I am not convinced it will lessen the burden of student loans," said William Bennett, a recent graduate from the University of North Carolina at Chapel Hill. The 10 percent deduction would be tough, he said, but the Rubio-Warner proposal could be a huge step toward larger financial aid repayment reform. "It's a step forward but certainly not the last," Bennett said. In their announcement of the Dynamic Student Loan Repayment Act, Rubio and Warner emphasized the mounting student loan debt and the importance of their bipartisan effort to create an innovative repayment plan. (More from POLITICO's Journalism Institute) "On average, today's graduates carry nearly $30,000 in student loan debt. But our current loan repayment system often turns what should be reasonable debts into crippling payments," the senators said in a joint statement. Andrew Kelly, director of the Center on Higher Education Reform at the conservative think tank American Enterprise Institute, said he supports the Rubio-Warner effort because it would make income-based payments mandatory, which are currently an opt-in for most federal payment plans. "When people have to opt in to things via a complicated process, that's heavy on paperwork and burdensome. They're less likely to self-select into it, and that's what we're seeing with income-based repayment," Kelly explained. For Rubio, particularly, student loans have been on his mind. When he was first elected to the Florida House of Representatives, he was still paying off more than $100,000 in student loans, his spokesman, Alex Conant, noted. "It's too expensive and too hard to access for too many Americans, especially working Americans," Conant said. "He's proposed a whole series of reforms to make it more accessible and more affordable." Rubio first outlined his student loan legislation in a February speech. And if it doesn't move along in this fall's congressional session, Conant said, he expects it to be revisited next year in the new Congress. And Conant said teaming up with the Democratic senator from Virginia could be a big asset. "We try to be bipartisan whenever we can because it obviously improves the odds of something passing," Conant said of Rubio's partnership with Warner. "His office expressed interest on this idea, and we're happy to work with anyone that agrees with us on this." For some students, though, bipartisanship is not a high priority. They're just eager for some relief from the mounting debt. "I honestly don't care who fixes the problem, as long as someone is working to fix it," said Alicia Carroll, a student at Emerson College in Boston set to graduate in fall 2015. The Rubio-Warner legislation is in sharp contrast to the stalled bill introduced by Sen. Elizabeth Warren (D-Mass.) that focuses on cutting interest rates for borrowers across the board, said Jason Delisle, director of the Federal Education Budget Project at the New America Foundation, a nonpartisan think tank focusing on education and other issues. The Rubio-Warner bill is more comprehensive than Warren's measure, Delisle said. "It gets to the heart of the problem rather than marginally lowering [interest rates]," he said. "This bill is the first time [the Senate is] advancing policy beyond pure concept," Delisle said. "All of the mechanics and processing have to be moving smoothly behind the scenes."

August 1, 2014 U.S. Committee on Banking, Housing, and Urban <b>...</b> Posted: 01 Aug 2014 02:34 PM PDT