Reach Out Today

If you or someone you know needs financial help, please do not wait to retain counsel. Contact Lewis Roberts, PA today!

Student Loan Questions Answered for Graduates

by Lewis Roberts, Florida Bankruptcy Lawyer

Recently, I was asked to answer some questions for an upcoming article on student loans.  Below is the excerpt to be published.

Do you have any tips for a working college freshman who has just taken out student loans? Should they aim to start saving to pay their loans back right away?

​If they are able to save to pay student loans back after school, then is it possible for the same student to pay for school as they go and never take out the loans to begin with?  Then that is certainly a better option.​  To make some sort of lump sum payment on the loans after graduating to reduce the total balance, or eliminate some of the loans, may or may not help with total payments based on the graduate’s income and total debt amount.

Will Obama’s new sympathetic approach to student loans direct companies (such as Sallie Mae) to take a more compassionate stance on loans, rather than forcing former students to give up money they don’t have?

​Sallie Mae is a servicer of federal loans and also is involved in private loans.  So when someone says their loans are with Sallie Mae, one has to be careful of what advice to give.  It doesn’t apply to both federal loans and private loans.  Under Obama’s expansion of PAYE​ (Pay As You Earn), it caps payments to 10% of disposable income under income driven repayment plans.  But this does not apply to private loans.  So if Sallie Mae holds a graduate’s private loans, they aren’t under any obligation to be more compassionate.  As to qualifying for PAYE or other income driven plans, there is no compassion involved.  A graduate either qualifies for the lower payments or they do not.

Do you think that students are properly educated about all of their loan options before starting college?

​Absolutely not, especially when it comes to private loans.  It is easy money to borrow with promises of higher incomes to pay it all back later.  Unfortunately, not everyone knows the reality of the burden of paying back student loans.  Even schools are shutting down now because the default rates on the loans were too high.  Look at Corinthian Colleges and even Thomas Cooley School of Law not admitting first year law students at their Ann Arbor campus.​

What is your opinion on the newly proposed Democratic bill in which students will be able to pay back their loans at lower interest rates? Do you think this bill will eventually get passed?

​If you are referring to Senator Warren’s bill, it was already shot down.  But her bill only helped a small minority of graduates who were current on their student loans.  The major problem are people who are not able to pay their federal and private loans.​

If you are referring to Senator Harkin’s bill to allow dischargeability of private student loans in bankruptcy, I don’t think that has a chance of passing during midterm elections.  Maybe not at all with the current Congressional makeup.  There would have to be serious compromises in any bill to get dischargeability to pass (absent a hardship).

Is it truly possible for a former student to dig his/herself out of terrible student loan debt without declaring bankruptcy? 

​It certainly depends on how much is the total debt, what sort of income the new graduate is earning, whether the loans are federal, private, or a mixture, as well as other factors.  It is hard to determine and certainly on a case by case basis. Certainly someone who goes to an in-state school and only takes federal loans has better prospects of paying back their loans than someone who goes to an expensive private school and takes out private loans.​

{ Comments on this entry are closed }

Who Is Dyck O’Neal and Why Is He Suing Me?

Dyck O’Neal Lawsuits in Orlando, FL I was at the courthouse the other day looking at lawsuits filed in Orange County in State Court. I only looked at lawsuits filed during May 2014. There were over 100 lawsuits filed by Dyck O’Neal Inc against various defendants.  Again, this is Orange County alone.  It does not include other […]

Read the full article →

Florida to Give Aid to Underwater Homeowners

First come, first serve.  Applications open September 25, 2013 to receive up to $50,000 in aid for your underwater mortgage. http://www.orlandosentinel.com/business/os-hardest-hit-20130920,0,4470130.story Eligibility requirements include, but are not limited to, the following: Must be a Florida resident and a legal US resident/legal alien; Must occupy property as primary residence; Must be current on the monthly mortgage […]

Read the full article →

Student Loans – Ask Me How I May Be Able to Help You

I am shamelessly stealing a Tweet I saw the other day: Befriend shady people. Witness a murder. Enter witness protection & get new name. So long student loans! If you feel that is what it takes to get rid of student loans, please call me at 407-749-0080.  

Read the full article →

Chapter 13 and Your Plan Payments

Was your Chapter 13 filed in Orlando or Jacksonville Bankruptcy Court? If so, your payment plan is due within 30 days of filing your case. It does not matter if you haven’t attended your meeting of creditors yet – the trustee must receive your plan payment, and it’s your job to make sure the money is where […]

Read the full article →

Chapter 13 Bankruptcy

Chapter 13 bankruptcy in Florida can be difficult, and putting their faith in a lawyer you can trust is important. For most people in Florida, Chapter 13 involves the reorganization of finances over a period of 3-5 years, so you should have a bankruptcy attorney there with you throughout the case. If you have assets you want […]

Read the full article →

Chapter 7 Bankruptcy

Declaring Chapter 7 bankruptcy can be a way for Florida consumers to break different types of debt and start again, without the constant harassment from creditors. Most people think of Chapter 7 bankruptcy when they think of getting out of debt, and that’s because it is the most common way to end your debt problems. Most people […]

Read the full article →

Bankruptcy Alphabet: I is for Insurance

Are you sure that you have insurance coverage on your home? You may think you do. But if you are one of many people who are: behind on mortgage payments; in the middle of a short sale; going through a strategic default; or filed bankruptcy and surrendered the home you may not have the insurance […]

Read the full article →

Bankruptcy Alphabet: H is for HOA (Homeowners Association)

Yes, your HOA, or homeowners association, can foreclose on you. Yes, your HOA can get you out of your home and rent it to someone else. There is much confusion over what your homeowners association can do to you if you stop paying your dues. It gets especially tricky when someone is not paying their […]

Read the full article →

Bankruptcy Alphabet: G is for Garnishment

You’ve been garnished. Did you know that you can get it stopped immediately? By filing bankruptcy. I may even be able to help you get some of the garnished funds back! I have been successful in making creditors who have taken funds from clients’ paychecks or bank accounts return the money. But I can only get […]

Read the full article →