Attorney Ron Sykstus Discusses the Student Loan Forgiveness Plan

Transcript

Thanks for joining me. This won't be too long, but I wanted to cover some information regarding student loans. Student loans are in the news all the time now. Or certainly have been within the last couple of weeks. So, just wanted to touch on some things as it relates to student loans. So, we're with Bond & Botes and are lawyers. As we tell folks, we've been handling all types of debt situations for the last 30 years or so, and we like to, internally anyway, joke amongst ourselves that if there's an issue about a debt or about debts that comes up that we're not familiar with, then really we think it's an issue or a debt problem of first impression. Meaning, we've seen a lot of stuff over our years. So, you know, with that, we always talk to folks. You know, people have questions, and no one wants to share their debt situation with anyone. I mean, it's a very personal, intimate thing. We understand that. If you have questions about your debts in general, go to our blog posts, or our blog at bondandbotes.com You may already be at the website but if someone's listening to this externally, it's bondandbotes.com That's B O N D A N D B O T E S .com Or you also can get to us through B O N D N B O T E S .com So, got a lot of information on our blog site, and just type in whatever your question is in our question box at our blog, and you should come up with some ready answers that at least help you get started on your research. So, with that said, let's talk student loans. Again, a lot of news out there with student loans as far as forgiveness. I'm going to kind of get to that in a second. First order of business, we tell folks know what your student loans are. We run into a lot of folks who have no idea. They think maybe they had a student loan but they're not sure. They're not sure what the type is. That type of thing. So, know what the student loans are. First order of business is get your credit reports, and you don't have to pay for them. Get the free ones. A lot of sites try to urge you and encourage you to buy them. You don't have to. Get the free ones, and they're just as good. They're from Experian, Equifax, and Transunion, the major three credit reporting agencies. Get your reports this way. Go to annualcreditreport.com Again, that's annualcreditreport.com You can get all three reports that way. You have to verify that you are who you say you are. Here's the trick to it. You only get one look. After one look, then you got to buy them. So, make sure you're at a computer where you can save your credit reports, and ideally, not only save them but also print them, as well. That way you've got all three of them, all pages, you know, at the ready for your review. So, once you do that, you should be able to figure out if you have other debts, also if you have student loan debts, and kind of what the status of all your debts are. Let's talk about other debts first. If there's something that's showing up that doesn't look right, that you disagree with, maybe you've paid it, you don't owe it, you don't know what it is. Again, at our blog post, or if you go to our blog site, in the question box, type in "how can I fix my credit report from any error?" We've got a detailed explanation on how to do that if there's an error on your credit report. Again, don't do that with student loans just yet, just do it with other debts. But, now looking at the student loan debt, you know, you can kind of tell from your credit reports what is out there because they do report to the credit reporting agencies. Use the other way to do it, as well. I want you to do the credit reports. I think that's important, but also go to this site. studentaid.gov, that's s t u d e n t a i d .gov Click on My Aid and then go ahead and enroll in it, or not enroll, but set up an account. That way you'll know what those are. Those are the government student loans, hopefully, with the US Department of Education. You can also call if you're having trouble with that site. It's 800, the number 4, fed aid. 800 - 4 - F E D A I D And also, the actual number is 800-433-3243. So, that'll tell you what your student loans look like, the government student loans, and also, you'll pick up any private student loans by looking at your credit reports. You know, it's important to know the distinction whether they're held by the US Department of Education or if they're private student loans. If they're private student loans, and you know they're private student loans, hold off doing anything. Because if they're very old, and if you haven't made a payment, you now make a small payment or work it out, then you, arguably, are going to restart the statute of limitations in most jurisdictions, so that's problematic. Talk to a lawyer if they're private student loans so you kind of know what that status is like and what you do and what you may not do, and how that's going to impact you. Whether you make a payment, whether you try to consolidate those with the US Department of Education, which is doable, but again, that creates issues, so that's something you'll want to discuss with a lawyer, if they're private student loans. So, if the loans are held by the US Department of Education, and frankly, that's what we want. That's what we've advised folks for years to do because that's what gives you wiggle room and the ability to kind of work through your student loans easier than if they're private student loans. And that's really evident by the fact that it's very easy, and it was easy when you got your private student loans and you were wondering why I did it myself, you were wondering why this is so easy, because there's not a lot of wiggle room since it's a private entity. So, when I say wiggle room, I mean workarounds and if something goes wrong with your student loans, you know, or with your debt situation. So. It's important to note under the new laws that are coming out, if the loans are Federal Family Education Loans, and the acronym is F F E L, or if they're Perkins loans. A lot of times those are not held by the US Department of Education, and those won't be covered by the new changes. So, note that and then, again, if you want totalk to a lawyer about that, that's advisable. Kind of figure it out because those types of loans, again, those are not private student loans. They're government loans but they didn't fall under Department of Ed. You want to get those transfer consolidated under the Department of Education because that's where these new benefits are coming from. So, the big thing is, and what everyone hears is the debt cancellation, right? For your student loan. And it's $10,000 as long as the income per individual is $125,000 or less. Or for a joint husband and wife, or you know, or a spousal unit filing $250,000. Also, if you had a Pell Grant, they add another 10 to that. So, that's a total cancellation of $20,000. Make sure if you remember getting a Pell Grant, try to find that information so you can have ready access to it, and you can show them, hey, I got a Pell Grant, so that amount should double to 20,000 instead of 10. That would be a lot of help. There's also a payment pause extension on all student loans and all government student loans, and this includes the FFEL loans and the Perkins loans until January 1st 2023. So, interest doesn't accrue during these time periods. You're not going to get your tax refunds withheld. Social Security won't be withheld. There won't be any tax levies or garnishments. So, that's good news that gives you a couple, two, three, four months here. I'll loosen my date's a little bit since we just started fall football season, but that gives you a little bit of time to figure out what's going on, what loans you have, and what you can do. So, there's a lot of good things here, like I said, in this law. So, we've got the cancellation. I just said the payment pause extension. A lot of people ran into problems over the last 5-6 years with the public service forgiveness option for a lot of people who're working in a public service position, and those are pretty broad as far as the definition. People maybe miss payments. They weren't sure what applied. Maybe there was a forbearance. A lot of that is going to be forgiven, so you won't have lost out on the time period. Look at that if you have a public service position and you were trying to get rid of the loans after making your 120 qualifying payments. There's a lot more forgiveness on that as far as, did you miss a payment, was there a forbearance, that type of thing. So look at that. But the the deadline to act, this is really important. The deadline to act, is this coming Halloween, October 31st, 2022. If you don't put in your waiver to ask for dispensation, if you will, or forgiveness on which you missed and what didn't exactly fit right under the public service waiver, or forgiveness, then you'll lose out. So, look at that. That's really important. Be mindful of that date, October 31st 2022, and don't wait. Do it now. If you have a public service loan that you were looking for loan forgiveness under this prong, work on that now. So, there's that. There's another good thing, for a lot of folks who are on income-driven repayment plans, and they've been doing that for several months, or several years really, and that's where you make a smaller payment based upon your income that you've already plugged into the system. It's 25 years. After 25 years, the balance of the loan would be forgiven. People miss, people aren't sure. They thought they made the payment, maybe they didn't. So, there's a lot of adjustments and tracking time. If you missed, or had a problem, that's going to be forgiven now under this new provision, or this new right. So, look at that as well, if that's kind of a prong you were looking at under student loans. Social Security. if you're on Social Security now, it used to be you'd have to put in with the Department of Education loans a waiver, a hardship waiver, to get the student loan discharged. Right now, or under this new provision, they're going to be forgiven automatically. So, that's really good news but follow up on that. And what we tell folks is, if you're getting Social Security Disability, that means the Social Security Administration has determined you as being disabled, get whatever documentation you have. Don't leave it up for the Department of Education to try to locate you and find out whether you are or are not disabled. Submit it. Get them the information showing hey, I get disability, or Social Security Disability. You had to go through a hearing where a judge determined you being disabled. Get the whole document. Submit that to the Department of Education, as well. Anything and everything you have showning you get Social Security Disability, submit that, and ask for the the discharge of your Student Loan debt. Also, private student loans. We talked about that a little bit. If you had private student loans with Navient, it used to be Sallie Mae, SLM, it's now Navient. In a lot of jurisdictions now, there's additional defenses and discharges and refunds that are available where they may let those loans go. So, look at that, as well. Again, if they were private student loans, Navient, Sallie Mae, or SLM, so look at that. A lot of this information I'm talking about today is available at a great website. It's the National Consumer Law Center. Just a plug for that organization. They do a lot of good work for consumers, and they've been doing it for many, many years. The website is nclc.org. Again, N C L C .org Look at that, you know, put your time in here. I mean, if you have student loan debt, now's the time to really, you know, get involved in it. And, you know, the student loan debt, the amount of folks that are in trouble with student loans, and when I say in trouble, defaulted you know, they've just been hanging out there, it's marred their credit report for years. Now's really the time to kind of explore this because you can get a lot of benefit here, and it could really right the ship for you going forward on a lot of different fronts. Whether it's discharge, forgiveness, getting things righted. A lot of benefits. So, again, NCLC.org Look at that. Keep an eye on our website bondandbotes.com B O N D A N D B O T E S .com We'll keep up on the information, as well. You need help, reach out to us. Again, student loans are tricky, and they've been tricky for a lot of years for a lot of folks. The number of defaulted student loans, or in some sort of problematic status, is phenomenal. So, this is a real opportunity for folks to get things righted. So, I hope this has been helpful, and reach out to us if you need our help. Thanks.