Back in 2018 nine teachers filed a lawsuit against Navient, one of the government’s student loan servicers for misleading borrowers or blocking them from accessing a public service loan forgiveness program. According to the New York Times, out of the 146,000 applicants to the program at the time, only 3,200 saw their student loans forgiven. The lawsuit was backed by the American Federation of Teachers, one of the nation’s largest unions. The lawsuit finally reached a proposed settlement in Manhattan federal court.
The settlement would award $15,000 to the plaintiffs and pay $1.75M to fund a new educational program that would provide public service workers counselling on their debt. It would also increase training of Navient workers to properly guide borrowers. Judge Denise Cote dismissed most of the other teacher’s claims of wrongdoing in July due to lacking or flimsy evidence.
The Department of Education has already been allocated $2.3M by Congress to increase outreach for the public service loan forgiveness program last year. Democratic Senators Tim Kaine, Sheldon Whitehouse, Tammy Duckworth, and Maggie Hassan already sent a letter to DeVos inquiring into this funding, as well as 23 senators demanding an investigation into other government loan servicers. Of these senators were three previous democratic presidential nominees Bernie Sanders, Elizabeth Warren, and Amy Klobachur. This settlement does not actually forgive any of the student loans that public service workers applied for, nor does it provide the same amount to pay off the average student loan debt, which as of 2019 was $31,172. Therefore anyone with debt held by Navient should not be expecting loan forgiveness from the settlement.
Back in 2018 nine teachers filed a lawsuit against Navient, one of the government’s student loan servicers for misleading borrowers or blocking them from accessing a public service loan forgiveness program. According to the New York Times, out of the 146,000 applicants to the program at the time, only 3,200 saw their student loans forgiven.
Times of crisis always have a significant impact on any country’s economy. Worse, when the country is caught unprepared, and that is what we’ve witnessed around the world. COVID-19 has pushed the “superpowers” to the wall economically, and countries are struggling to remain afloat.
This week Time magazine predicted that a wave of bankruptcy filings for small businesses will ensure following the recovery of Covid-19. The government’s attempts to provide relief for small businesses have been unsuccessful to say the least since their guidelines allow for major corporations to take millions of dollars from the fund.
With cases of COVID-19 now at 586,057, where only 43,637 have recovered, while 23,604 have lost their lives, there is significant damage that’s been dealt to America’s economy. The sad fact is that we are not sure of when this pandemic will end and so the numbers may continue increasing in the foreseeable future.
President Trump signed a bill providing financial relief for Americans struggling in the wake of the coronavirus shutting down all non-essential businesses. Part of that bill granted a six-month suspension period on federal student loan payments until September 30th.
Anyone can qualify to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty required. You don’t have to show insolvency or meet a certain standard.
You should always speak with a lawyer before beginning the bankruptcy process to ensure it’s the best option for you. Michelle Labayen is a knowledgeable and experienced bankruptcy attorney with offices in New York, NY, and Newark, NJ. Florida licensed attorney Drew Gaddis is counsel and would be representing all clients in Florida.