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.
The recent focus from the Presidential candidates on the economy and the future of student loans has caused me to look at the connection between a rate hike in the Federal Interest Rate the future of student loans, both Private and Federal.
When we speak of student loan debt, we really have to talk in terms of long term debt. With the national average of student loan burden of current graduates exceeding $30,000.00, addressing that debt load and arriving at a manageable student loan debt resolution option will take a long time. Therefore, the effects of any rate increase, even if it is incremental, will have a huge long term negative impact on addressing the repayment of student loans. According to the Wall Street Journal, 97% of experts predict an increase over the next year.
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.
If you are in debt up to your eyeballs, you look to the bankruptcy laws to assist you in digging out from underneath the weight of debt and begin over.
That, after all, is what the law's designed to accomplish – provide you with another possibility to place yourself in a better financial place.
On Wednesday, University of Phoenix's parent Apollo Education Group announced that the business and marketing methods of the for-profit school are now under investigation by the Federal Trade Commission (FTC). CNNMoney.com reports that Apollo will "cooperate fully" with the FTC research, which requires them to provide the federal company with papers on their finances, advertising, certification, and army recruitment practices from the last four years.
According to recent data from Experian, 40 million Americans have at least one outstanding student loan. The average amount of debt is $29,000.00, which is an all time high. A common question for many borrowers is “how will my student loans be affected if I get married?”
Many work tirelessly over the years, but never quite make enough to pay back the large amounts they barrow for their education, and many owe even more when their loan amounts grow even higher when they go to in default.
Many file for bankruptcy, wiping out other debts. But getting rid of student loans requires initiating an entirely separate legal process, where debtors must prove that paying the debt would cause an “undue hardship.”
Have you defaulted on your Private Student Loan? Has it been in collections for a long time? Have you essentially ignored the problem hoping that it would go away? If you have been served with a state court lawsuit, now is the time for student loan resolution.
There are dozens of identifiable economic events that cause someone to file for the protection of a bankruptcy. Sometimes the cause is as simple as rainfall, or shall I say the lack of rainfall.
In April of 2015 the Governor of the State of California, Jerry Brown, signed an executive order imposing mandatory restrictions on water use. See full text of the order: http://gov.ca.gov/docs/4.1.15_Executive_Order.pdf. What that entailed was a State wide reduction of water consumption by at least 25%. This was due to the lack of snow pack over the winter months, and therefore, the lack of melting snow pack for water.
After representing student loan borrowers for the last few years I have come to realize that the most important aspect of obtaining some type of student loan debt resolution is getting the issue in front of someone who can communicate with you.
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.