Last week the U.S. Department of Education announced their latest move to assist some individuals with financially debilitating student loan debt. This part of the Obama Student Aid Bill of Rights, is directed at hundreds of thousands of borrowers who are permanently disabled and cannot work. The Department of Education started sending out letters this week to student loan borrowers that have been identified, with the help of the Social Security Administration, as receiving disability payments and are eligible to have their student loans discharged. This type of student loan relief is known as a “Total and Permanent Disability” loan discharge. There were 387,000 permanently disabled individuals identified, with nearly half of these currently in student loan default, as qualifying with an estimated $7.7 billion in student loans.
The U.S. Department of Education announced, on March 25, 2016, that evidence uncovered in its ongoing investigation of Corinthian Colleges, Inc. indicates that students were defrauded at 91 former Corinthian campuses nationwide and that those students have a clear path to student loan forgiveness. Students in more than 20 states who attended Corinthian's Everest or Wyo Tech schools, now represent the largest group of borrowers eligible for loan relief as a result of the Department of Education's investigation into Corinthian.
On January 27, 2016 the Federal Trade Commission filed a lawsuit against DeVry University alleging the for-profit school deceived prospective students by exaggerating post-graduation job prospects. This constitutes a violation of the FTC Act and the complaint asks the court to provide redress to consumers and prohibit DeVry from further violations. Additionally, the U.S. Department of Education (DE) has taken separate action to require DeVry to stop deceptive advertising claims regarding its graduates’ employment success and to implement procedures to insure the truthfulness of post-graduation employment claims. These enforcement actions may open the doors for DeVry graduates to request student loan debt relief.
Marinello Schools of Beauty operates 56 cosmetology schools across five states, including two locations here in San Diego (Miramar and El Cajon). On February 4, 2016 Marinello suddenly shut down all of its locations leaving 4,300 students unable to continue their education and 800 employees out of work.
The sudden shut down came after the US Department of Education denied recertification of Marinello’s eligibility to participate in federal student aid programs. According to the Department of Education website, Marinello was notified on February 1, 2016 that its participation would end effective February 29, 2016. Three days after Marinello received this notification, it shut down all locations.
An important factor that sets student loan debt apart from all other kinds of debt is that it’s just about impossible to rid yourself of it. Even borrowers that end up in such financial burdens file for bankruptcy and struggle to get a fresh start void of their student loan debt.
But a few cases working their way through the legal system could alter that. They increase the possibility that the courts might offer a loose definition of how difficult the borrower’s financial situation is before a bankruptcy judge can justify discharging his or her loans.
It’s not just young people struggling to pay back student loan debt but more and more retirees are struggling due to this student loan debt burden. An estimated 700,000 seniors on Social Security are still paying off student loans. Recently nearly 160,000 of these retirees have had their disability and retirement payments garnished to pay down student loan debt.
According to The Consumer Financial Protection Bureau, there are 8 million student loan borrowers in default.* If you are one of those, you may be asking yourself , How did I get here?
My experience with working with those clients who have student loans has shown me that student loan default could have been avoided had their servicers been forthright with the information they needed to prevent default, and options for student loan default resolution. In the majority of cases that I have seen, the services play hide and seek with vital information, leaving the student loan borrower confused.
SDBF was founded in 1989, and is affiliated with theCalifornia Bankruptcy Forum, together with six other local forums: Orange County, Los Angeles, Bay Area, Sacramento, Inland Empire, and Central California.
The initial principal purposes of the San Diego Bankruptcy Forum are to disseminate information, provide public service and education and promote a better spirit of cooperation in the field of bankruptcy and insolvency law and practice in San Diego County, and the officers and agents of the San Diego Bankruptcy Forum are authorized and instructed to proceed to that end.
Attorney D.J. Rausa has been elected to serve on the Board of Directors for a three year term commencing January of 2015.
Mr. Rausa has previously served on the Board of Directors for a three year term in 2006 and a two year term in 2010.
As of May 10, 2015 the NSLDS report access system was changed. You will need to Log onto NSLDS.ED.Gov by using your User Name or Verified E-mail address and a Password.
1. If you have already set up your access with your User Name or Verified E and Password, simply log on and follow the instructions below.
2. If you have not set up your access, then click on the “Create an FSA ID” tab and follow all the steps to create your FSA ID.
a You will get an e-mail asking you to verify your e-mail address
b You will hear back from FSA once they verify your information with the Social Security Office. This should take a day or two.
c Once everything is verified, follow the directions below.
The starting point to begin an analysis of any Student Loan issue is to obtain any and all information that the U.S. Department of Education has regarding all Federal Student loans that pertain to you. Attorney D.J. Rausa needs this information to be able to explain any and all options.
If you have obtained a Federal Student Loan anytime during your life, then the information is available at the National Student Loan Data System, or, NSLDS. This report will provide vital information regarding what type of Federal Loans you have obtained, the status of those loans, who the current servicer of those loans are, and who the lenders are.
From this website, Attorney D.J. Rausa will need two things.
1) The summary of all your loans will be the first page you see.
2) The detail report on all your loans.
The number of each loan will be listed on the left hand side of the summary page. The numbers are hyperlinks to all the details of each of your loans. Simply click on the number and the details of the loan will be the next screen. I will need all pages for each of these individual loans.
In the center of each page, there will be a Download button. DO NOT DOWNLOAD unless you want 75 pages of information in a txt format, I do not.
Simply Print/save as a PDF, of all pages. This is what D.J. Rausa wants to review and it will be used to discuss and evaluate your circumstances.
I look forward to reviewing this report with you and assisting you with the management of your Student Loan debt.
San Diego, CA, January 28, 2015 – Representative John K. Delaney (MD-6) has filed legislation in Congress spotlighting the omnipresent financial crisis with student loan debt. Unlike mortgage, credit card and auto loan debt, the current law does not allow for student loan debt to be discharged. The Discharge Student Loans in Bankruptcy Act (H.R. 449) would most likely render student loans dischargeable under bankruptcy.
“Student loan debt is dragging down economic growth, keeping the American Dream out of reach for many and is a monthly strain for millions,” Congressman Delaney said in a recent statement. “While student loan debt is a complex problem that will require many solutions—increased support for grant programs, efforts to increase affordability, improved consumer education—we also need to reform our laws to help those with the absolute greatest need. Right now, there is effectively a huge student loan loophole in bankruptcy law that’s hurting real people."
As the cost of college tuition continues to rise, the student loan debt burden on students and their families also continues to rise. San Diego bankruptcy lawyer D.J. Rausa said, “Student loan debt affects not only recent graduates but also every age generation, even senior citizens. This legislation would truly help people struggling with this issue.”
"Bankruptcy has long been an option of last resort for individuals facing an irresolvable level of debt; bankruptcy isn’t easy or enjoyable, but it’s a necessary part of our financial system," Delaney continued. "It doesn’t make sense for students with heavy debt burdens to be worse than someone with credit card, auto loan debt or mortgage debt. Every member of Congress from every state in the country has constituents who are struggling severely because of student loan debt. At the very least we should have some basic fairness in the law.”
About D.J. Rausa, Attorney at Law
San Diego Bankruptcy Attorney D.J. Rausa has over 21 years experience as a consumer bankruptcy lawyer and advocate. Throughout his career, he has helped thousands of consumers with the Student Loan Debt,delinquent tax debts, child and spousal support enforcement actions. As a consumer bankruptcy attorney, he specializes in both Chapter 7 Bankruptcy and Chapter 13 bankruptcy. He is also skilled in the areas of debt negotiations and reorganization, foreclosure defense, income tax resolution with the IRS and California State taxing authorities. Attorney Rausa is an aggressive advocate for individuals and families consumed by debt after often caused by catastrophic medical bills, job loss, and the hardships of student loan debt.
The Law Offices of D.J. Rausa
1081 Camino Del Rio South #207
San Diego, CA 92108