Department of Education Eliminates Many Protections for Student Loan Debtors
Whether you are a student loan borrower or not, you may be confused about ongoing concerns regarding the ‘crisis,’ and what any of us are expected to do to fix it, as borrowers continue to take out enormous amounts of money that lenders continue to lend. On top of all the money pouring out to students who may have no idea what such responsibility really means, little is already being done to help graduates—and non-graduates alike—later, when they are struggling to pay back debts.
Now, the situation worsens. The US Department of Education has published new rules which actually take away what little protection student loan borrowers did have under the Obama administration. As part of the borrower defense rule, students did have some chance of taking action regarding federal student loans due to school misconduct or closures, which happen more often than you might think—and especially with for-profit schools.
While there may be many questions and concerns about how over 45 million borrowers are now in debt for $1.6 trillion, with delinquencies and defaults just expected to grow, many individuals already under increasing dures are now hobbled further. The Department of Education action will result in $512.5 million less in student loan relief annually.
New rules go into effect next year, beginning July 1, 2020.
“Most of the changes to student relief rights will only apply to new loans first disbursed on or after that date, and so most current borrowers will not be impacted,” states Student Loan Borrower Assistance.
“But some changes will kick in sooner and may hurt current student borrowers. For example, current borrowers attending a school that closes after July 1, 2020 will be stuck with their loans unless they apply for a closed school discharge. In contrast, many borrowers whose school closes between November 1, 2013 and June 30, 2020 will have their loans automatically cancelled.”
It could not be clearer that what student loan borrowers need are more avenues for relief rather than less; however, it may continue to get worse before it gets better—with millions of individuals in the US caught in the crossfire.
Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan? Contact Fitzgerald & Campbell, APLC now so one of our experienced student loan debt attorneys can review your case and discuss all the available options with you. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (855) 709-5788, or email us at firstname.lastname@example.org.
Posted in: Student Loan Debt