We help people who need student loan help or bankruptcy in Colorado. Since 2006 we have helped thousands of people better understand and solve their federal and private student loan problems.
FEDERAL STUDENT LOAN 2023 UPDATES COVERED ON THIS PAGE
FEDERAL “PAYMENT PAUSE” ON MOST FEDERAL LOANS ENDED - INTERET STARTS 9/1/23; REPAYMENT STARTS 10/1/23 but “Department’s “on ramp” means there is no penalty for NOT making payments until 9/2024.
PSLF [PUBLIC SERVICE LOAN FORGIVENESS] “LIMITED WAIVER” ENDED 10/31/22 BUT PROGRAM CONTINUES
MANY CHANGES TO PSLF PROGRAM GOING FORWARD
“FRESH START” FOR ALL DEFAULTED FEDERAL STUDENT LOANS
CHANGES TO IDR PAYMENT PLANS PROPOSED - New “SAVE”Plan Launched
IDR “AUDIT” WILL GIVE PEOPLE MORE CREDIT TOWARD 20/25 YEAR IDR FORGIVENESS
BDTR [BORROWER DEFENSE TO REPAYMENT FORGIVENESS]
SWEET v CARDONA CLASS ACTION SETTLEMENT re BDTR APPLICATIONS
FULL LOAN FORGIVENESS TO MOST WESTWOOD, CORINTHIAN & ITT STUDENTS — see dates
CHANGES TO DEPARTMENT POSITION ON DISCHARGES IN BANKRUPTCY
STAYING IN IDR PLANS DURING CHAPTER 13 BANKRUPTCY
JOINT SPOUSAL CONSOLIDATION LOANS WILL BE ALLOWED TO BE SEPARATED!
SERVICER CHANGES
FEDERAL STUDENT LOAN “PAYMENT PAUSE” [$0 due/$0 interest] on MOST federal student loans* ENDS SOON.
The Pause began 03/20/2020. Interest restarts September 1, 2023; Repayment began 10/01/23.
NEW REPAYMENT PLAN OPTIONS ANNOUNCED INCLUDING “SAVE” PROGRAM. SEE details at https://studentaid.gov/announcements-events/save-plan
WHO OWNS YOUR FEDERAL LOANS MATTERS > FFEL [Federal Family Education Loan] LOAN OWNERSHIP: The Department of Education owns 100% of DIRECT federal loans. But the Department controls but only owns 80% of federal FFEL student loans. So 20% of FFEL loans -- those NOT owned by the Department-- have been required to make monthly payments despite the COVID FORBEARANCE unless a loan’s Servicer granted you a “Covid deferment or forbearance” approved by the LOAN’S owner. FFEL loans not owned by the Department are NOT in the “Payment Pause”. FFELs are “ED-held” or “not ED-held.” I can help you know which kind you have and how to best manage them.
LOAN TYPE MATTERS: MAJOR TYPES OF FEDERAL LOANS
• DIRECT
• DIRECT CONSOLIDATED
• FFEL OWNED BY DEPT OF ED
• FFEL CONSOLIDATED OWNED BY DEPT OF ED
• FFEL BUT NOT OWNED BY DEPT OF ED
• FFEL CONSOLIDATED BUT NOT OWNED BY DEPT OF ED
• PERKINS
• [ABOUT 20 OTHER OLD RARE ONES including Stafford, HEAL, Grad PLUS & Parent Plus]
CLICK HERE TO FIND OUT WHICH KINDS OF FEDERAL LOANS YOU HAVE
PSLF [PUBLIC SERVICE LOAN PROTECTION] LIMITED WAIVER expired 10/31/22. but major improvements to PSLF announced 2022 - 2024.
CLICK HERE FOR DETAILS.
“FRESH START” FOR DEFAULTED LOANS:
A defaulted federal loan is one that had no payments for at least 270 days. Default results in acceleration which is the demand for immediate repayment of the entire outstanding balance of a loan(s).
Since 03/20/20, if your federal student loans [Direct or any FFEL regardless of who owns them] were in default or went into default, the Department stopped collection activity [collection calls, wage garnishment or taking tax refunds or garnishing Social Security]. The Department has announced special rules called “FRESH START” to allow ANYONE in default to get out on special terms within the next year:
FRESH START: The Fresh Start initiative will be in place for one year following the COVID payment pause.
During thatperiod, borrowers with federal student loans in default will not have collection activity restart and will be able to re-enter current repayment status without any past due balance;
Restores borrowers’ access to repayment options—that could offer monthly payments as low as $0 through IDR plans—and provide opportunities for loan forgiveness;
Has already restored borrowers’ eligibility to receive federal student aid, including Federal Pell Grants and campus-based aid like Federal Work-Study, so student borrowers can complete their course of study and increase long-term repayment success;
Restores borrowers’ eligibility for future rehabilitation for borrowers who rehabilitated a defaulted loan during the COVID payment pause;
Provides improved credit reporting features—including removing borrowers from the federal Credit Alert Verification Reporting System (CAIVRS) after July 10, 2022.
Loans Eligible for Fresh Start:
• Defaulted Federal Direct Loans
• Defaulted FFEL loans (both ED-held and not ED-held)
• Defaulted ED-held Perkins Loans
FFELs not held by ED that defaulted after 03/03/20 through 12/31/22 will be returned to current standing through ED’s action to expand COVID-19 flexibilities. Because these loans will be returned to current standing, they are not eligible for Fresh Start benefits.
Loans Not Eligible for Fresh Start:
• Defaulted school-held Perkins Loans
• Defaulted Health Education Assistance Loan [HEAL] Program loans
• Student loans remaining with the U.S. Department of Justice (DOJ)
• Direct Loans and commercial-held FFEL Program loans that default after 12/31/22.
SOURCE: https://studentaid.gov/announcements-events/default-fresh-start
IDR “AUDIT” WILL GIVE PEOPLE MORE CREDIT TOWARD 20/25 YEAR IDR FORGIVENESS
Income -Driven Repayment [IDR] plans [ICR, IBR, PAYE, REPAYE] are supposed to forgive all loan balances after being enrolled in and making payments for 20 or 25 years. The time depends on the type of plan and whether loans were for undergraduate or graduate loans. But an audit found many, many problems with record-keeping and lack of Servicer disclosures about the programs. As a one-time fix, the Department is conducting an audit to recount to make as qualifying all months that Direct Loan borrowers should have earned toward IDR forgiveness. and is lifting normal restrictions as to what counts as qualifying payment months. FFEL borrowers may get the audit benefits by consolidating into a Direct Consolidation Loan before the Department finishes its audit. The Department’s timetable on the Audit timeline is not totally clear, if you have FFEL loans you need to apply to consolidate them by April 30, 2024.
In this one-time audit, these months will automatically count for forgiveness under any of the income-driven repayment plans:
Any months in which borrowers made payments regardless of the payment plan;
Any months in which borrowers made payments regardless of the payments made or loan type;
Any time in repayment prior to consolidation on consolidated loans;
Any months spent prior to 2013 in a deferment other than an in-school deferment;
Past forbearances [except bankruptcy forbearances] of more than 12 consecutive months;
Past forbearances [except bankruptcy forbearances] that cumulatively exceed 36 months.
WE EXPECT MANY BORROWERS TO BE GIVEN SIGNIFICANT INCREASES IN THE MONTHS COUNTING TOWARDS THE 20 or 25 YEARS NEEDED FOR FORGIVENESS..
Borrowers who have forbearance periods under the 12-month or 36-month thresholds may appeal to the federal Student L:oan Ombudsman to give them credit for those months towards forgiveness by submitting a request to the federal Student Loan Ombudsman’s office. Contact me for more information.
Any borrowers with loans that, based on the audit, now exceed the number of qualifying 20 OR 25 years toward forgiveness (as applicable) will have their loans forgiven automatically, even if the borrowers are not currently on an IDR plan. Those who have made payments after exceeding the applicable 20 or 25 years toward forgiveness will receive a refund for any overpayments.
AND FINALLY, sometime in 2024, YOU WILL FINALLY BE ABLE TO SEE AND TRACK AT STUDENTAID.GOV YOUR ACTUAL MONTHLY COUNT toward loan forgiveness.
SOURCE: https://www.ed.gov/news/press-releases/department-education-announces-actions-fix-longstanding-failures-student-loan-programs and https://www.gao.gov/products/gao-22-103720
BORROWER DEFENSE TO REPAYMENT FORGIVENESS [BDTR] &
SWEET v CARDONNA PROPOSED CLASS ACTION SETTLEMENT WAS APPROVED & IS BEING IMPLEMENTED.
ON 11/16/22 JUDGE ALSUP APPROVED THE PROPOSED SETTLEMENT AS PRESENTED TO HIM. ON JANUARY 13, 2023 3 SCHOOLS APPEALED THE SETTLEMENT AND REQUESTED THE SETTLEMENT BE STAYED UNTIL THE APPEAL IS RESOLVED.
ON 02/25/23 THE JUDGE RULED THE DEPARTMENT COULD START ISSUING DISCHARGE EMAILS TO PEOPLE IN GROUPS 1 & 2 [SEE DEFINITIONS BELOW EXCEPT the Court stayed discharges of applicants who attended a school operated by one of the three appealing entities—American National University, Everglades College, Inc., and Lincoln Educational Services, Inc.—for 7 days to allow those entities to seek a stay from the Ninth Circuit Court of Appeals.
NO NEW BDTR APPLICATIONS CAN BE ACCEPTED UNDER THE SWEET LAWSUIT AFTER 11/16/2022. BUT BDTR STILL EXISTS SO YOU CAN SUBMIT AN APPLICATION UNDER EITHER CURRENT BDTR RULES OR THE NEW RULES EXPECTED 07/01/2023. TALK TO ME ABOUT SUBMITTING A BDTR APPLICATION NOW. UPDATE: A lawsuit means new BDTR forgiveness is delayed awaiting a Circuit court challenge to the newest rules.
IF THE FOR-PROFIT SCHOOL(S) YOU ATTENDED MISLED YOU, MISREPRESENTED ITS PROGRAMS or BROKE STATE LAWS: YOU CAN APPLY TO HAVE YOUR LOANS FORGIVEN, BUT MANY ARE SPECIFICALLY IMPACTED BY THE SWEET v CARDONA [Department of Education] BDTR CLASS ACTION PROPOSED SETTLEMENT:
The case was filed in June 2019, and on June 22, 2022, the Parties announced a proposed case class settlement that would completely forgive the federal student loans for people in Groups 1 & 2 listed below.
There are 3 sets of people who the Settlement proposes should get their federal student loans forgiven under BDTR:
Group 1) People who SUBMITTED a BDTR Application by 6/22/22 and NEVER got a reply from the Department; You are a Sweet Class Member WHOSE LOANS FOR THAT SCHOOL WILL BE FORGIVEN if the Judge approves the settlement on November 3, 2022..
Group 2) People who SUBMITTED a BDTR Application BY 6/22/22 and were denied loan forgiveness by the Department BETWEEN December 1, 2019 and October 31, 2020. The Department will rescind all of the denial notices it issued between those dates so you can be a Class Member; You are a Sweet Class Member WHOSE LOANS FOR THAT SCHOOL WILL BE FORGIVEN if the Judge approves the settlement on November 3, 2022..
Group 3) If you NEVER SUBMITTED a BDTR Application but think your school – even if not on the List – misrepresented itself or broke state law, the Settlement is giving you a chance to still submit a new BDTR APPLICATION SOON. The FINAL CUTOFF DATE is WHENEVER JUDGE ALSUP RULES.. Group 3 people are called "Post-Class Applicants".
There is a FLOWCHART which explains the proposed Settlement. See https://static1.squarespace.com/static/62d6e418e8d8517940207135/t/62fd549d7990e6153e306e7a/1660769437231/UPDATED_PPSL+Sweet+Flowchart_FINAL.pdf
An updated list of Schools is here: See https://static1.squarespace.com/static/62d6e418e8d8517940207135/t/630668330ba05211376cc9a5/1661364278974/317-1+Corrected+Exhibit+C.pdf
Detailed case explanation: https://www.ppsl.org/cases/sweet-v-cardona [scroll down and click on links]
MOST WESTWOOD COLLEGE STUDENTS GET FULL SL FORGIVENESS
Automatic loan forgiveness - Nothing you have to do – Covers all loans between January 1, 2002 through November 17, 2015 when it stopped enrolling new borrowers in advance of its 2016 closure - None of my clients have gotten any Notice from Dept./FSA or Servicers YET BUT NOTICES ARE EXPECTED BY THE END OF 2022.. This means Westwood students may ignore Sweet & BDTR & PSLF for loans for attending Westwood. PARENT PLUS loans? > "[Will] discharge all remaining federal student loans borrowed to attend any campus owned or operated by WESTWOOD College." so sounds like PPs are included.
MOST CORINTHIAN STUDENTS GET FULL SL FORGIVENESS
Automatic loan forgiveness - Nothing you have to do – Covers all loans 1995- 2015 - As of November 2022 my clients are starting to get Notice from Dept./FSA. This means Corinthian students may ignore Sweet & BDTR & PSLF for loans for attending Corinthian [Everest, Wyotech, Heald]. PARENT PLUS loans? > "[Will] discharge all remaining federal student loans borrowed to attend any campus owned or operated by Corinthian College." so sounds like PPs included.
MOST ITT STUDENTS GET FULL SL FORGIVENESS
Automatic loan forgiveness- Nothing you have to do - Loans January 1, 2005, through closure in September 2016. - As of November 2022 my clients are starting to get Notice from Dept./FSA. [This means ITT students may ignore Sweet & BDTR & PSLF for loans for attending re ITT. PARENT PLUS? -- " discharge all remaining federal student loans that borrowers received to attend ITT Technical" so sounds like PP included.
Marinello Schools of Beauty FULL SL FORGIVENESS
Automatic loan forgiveness- Nothing you have to do - Loans from 2009 through its closure in February 2016 - None of my clients have gotten any Notice from Dept/FSA or Servicers so I asked Ombudsman to find out when to expect Notices.
Kaplan Career Institute FULL SL FORGIVENESS
[only Kenmore Square location in Massachusetts] -- Full discharges for just under 100 borrowers who enrolled in the Medical Assistant or Medical Billing & Coding Program at from 07/01/2011 to 02/16/12
Source: 8/16/22 Dept press release: https://www.ed.gov/news/press-releases/education-department-approves-39-billion-group-discharge-208000-borrowers-who-attended-itt-technical-institute
DEPARTMENT OPPOSITION TO BANKRUPTCY DISCHARGES IF PERSON ELIGIBLE FOR ANY IDR CONTINES
As of November 17, 2022, the Department of Justice and Department of Education announced new Guidance on how they will respond to bankruptcy adversaries when filed. CONTACT ME FOR DETAILS.
FORGIVENESS & CHAPTER 13 BANKRUPTCY
Beginning in 2018, the Department began not objecting to certain debtors proposing to enroll or stay enrolled in an IDR repayment plan during a chapter 13. Known sometimes as “Buchanan” provisions, non-defaulted debtors who met certain criteria could propose a separate Class 4 sub-class using special Plan language. Debtors would enroll or stay enrolled in an IDR plan so as not to lose the 36 - 60 months of IDR credit towards loan balance forgiveness after 20 - 25 years. The Trustee and Judge have to approve the propsed Plan. To date we
We know time in bankruptcy does NOT count for PSLF or PSLF Limited Waiver.
JOINT SPOUSAL CONSOLIDATED LOANS (Direct & FFEL)
The Joint Consolidation Loan Separation Act of 2021, a Bill to allow people to separate these loans, was just signed by President Biden on October 11, 2022.
The next step will be for people with joint spousal onsolidation loans [JSCL] to submit a joint application to the Department of Education to sever their consolidated loan into two separate loans. Or one borrower may submit a separate application in the event that the individual is experiencing domestic or economic abuse from the other individual borrower or is unable to reasonably reach or access the loan information of the other borrower.
Congress eliminated the Joint Spousal Consolidation loans program in 2006, BUT it did not provide a way for borrowers to sever existing loans, even in the event of domestic violence, economic abuse, or unresponsiveness from a former partner. to split the loan. Now they can be split. The Department HAS JUST published A DRAFT the Application to split these loans. Stay tuned.
JSCL & BIDEN FORGIVENESS: BIDEN FORGIVENESS ON HOLD UNTIL LAWSUITS RESOLVED.
If you have no need or reason to separate your JSC's, you can apply now for Biden $10k/$20k forgiveness at https://studentaid.gov/debt-relief/application. Applications will be accepted so you may choose to separate and then apply.
Each JSC spouse gets $10,000 forgiveness [UNLESS YOU ONLY HAVE FFEL loans not owned by the Department of Education]. Each spouse who had a Pell grant gets $10,000 forgiveness [UNLESS YOU ONLY HAVE FFEL loans not owned by the Department of Education]. So max JSCL Biden forgiveness = $40,000.
SERVICER CHANGES
The Dept. uses Servicers to collect payments and administer programs. There are many changes in 2022:
MOHELA/PSLF: 888-866-4352
As of July 1, 2022, Mohela is THE Servicer for anything related to PSLF. Fedloan will be out of the picture by the end of September. ONLY DEAL WITH MOHELA. for PSLF.
OTHER FEDERAL SERVICERS [who may also service some private loans]:
AIDVANTAGE 800-236-4300
Took over Direct & FFELs owned by the Department formerly serviced by NAVIENT.
NELNET 888-486-4722
Nelnet purchased Great Lakes and loans serviced by Great Lakes are being transferred to Nelnet.
HESC/EDFINANCIAL 855-337-6884
OSLA SERVICING 866-264-9762
ECSI 866-313-3797
FFEL LOANS NOT OWNED BY THE DEPARTMENT
NAVIENT 888-272-5543
Serviced both federal and private student loans. Has stopped serving Direct & FFEL federal student loans owned by the Department, AND WILL SOON STOP servicing FFELs NOT owned by the Department & private student loans.
ASPIRE 800 243-7552
COLLECTION COMPANIES: The Department no longer uses private collection companies to collect on defaulted federal loans. This ended during COVID and any issues related to defaulted federal student loans and ”Fresh Start” will be handled under Department supervision by the DEFAULT RESOLUTION GROUP [operated by Maximus] 800-621-3115. Loans not owned by the Department may stil be subject to collection by collection agencies.