Category Archives: Student Loans
The sad reality for most of my student loan clients is they have large federal and private student loan balances. In many cases they also have co-signors, usually a parent or relative, who will be on the hook if the main borrower defaults. Federal loans can be consolidated and placed in affordable repayment plans, but private loans are usually another story. That said, there are options for dealing with private loans, even if you are in default. (1) Check your Statute of Limitations period (“SOL”). All states have SOL deadlines for creditors to file collection lawsuits. If the SOL has expired on a private student loan, the creditor is out of time to sue and obtain a judgment unless you make a voluntary payment to extend the SOL period (federal student loans do not have an SOL). If sued after the SOL has passed, you still need to raise the…
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Americans are facing the most dire financial situation since the opening days of the Great Recession in 2008. In fact, Goldman Sachs suggested that unemployment claims hit more than 2 million in a short period of time. Treasury Secretary Steven Mnuchin ominously warned that the U.S. could experience a 20 percent unemployment rate. Mnuchin clarified that this scenario could occur without intervention, but later walked back his statements. Widespread layoffs have many people with student loans worried about making payments. Fortunately, President Trump suspended payments for federal student loans on Friday. The freeze is in place for 60 days, but could be extended. You can reach out to your loan servicer to take advantage of this change of events. The economic impact of the coronavirus pandemic could last for many months. Some people affected by the crisis may be unable to find work for a long time. If you recently…
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The Trump administration recently introduced budget proposals that could spell the end for Public Service Loan Forgiveness (PSLF). In 2007, the Bush administration signed PSLF into law. PSLF allows eligible federal loan borrowers to receive tax-free loan forgiveness for working in many public sector jobs. The program allows for loan forgiveness after making 120 eligible payments. You have to meet certain requirements to be eligible for PSLF. Prior blog posts published by our law firm go into more detail on this program and its requirements. You must work within a public sector or nonprofit job that is eligible for PSLF forgiveness. Additionally, you must enroll in an eligible repayment plan. Borrowers from all walks all life are enrolled in PSLF. If you are a teacher, doctor, lawyer, government official, police officer or nonprofit worker, then you can enroll if you are eligible. Certain professions generally incur large student loan balances….
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