The U.S. Department of Education recently assured students that it will soon be making a push to help those looking for loan forgiveness. According to a statement released late last month, the agency will start an official process to create a more effective procedure for student debtors to assert a defense to loan repayment in situations involving wrongful actions of their university.
The decision likely comes in response to Corinthian Colleges, Inc., which recently filed for Chapter 11 bankruptcy. The for-profit college company controls hundreds of institutions throughout the U.S. and Canada. Some of these institutions include Heald, WyoTech, and Everest College, which became well-known for its charismatic spokesperson.
Corinthian Colleges Inc. was the subject of numerous investigations regarding whether or not it was conducting predatory marketing techniques and misrepresented its job placement statistics.
Unfortunately, it is nearly impossible to get student debt discharged under current bankruptcy law. There are already federal laws that allow defense of loan repayment if the educational company is involved in actions that warrant legal action against them. However, students of Corinthian Colleges, Inc. found defense of repayment procedures extremely difficult as well.
After the education company closed down operations in April, former students had a hard time trying to get through the loan forgiveness procedures. The difficulties brought the issue to the attention of the Department of Education, which will be updating regulations.
Fortunately, there is help out there for students struggling to cope with crippling loan debts. It could potentially be very beneficial for anyone living under the pressure of student debt to contact a bankruptcy attorney. Even if it is not possible to have the student debt discharged by filing bankruptcy, there may be other options to relieve the pressure. For example, discharging other debts may free up funds that can then be used for loan payments, or there may be a way to lower the amount of monthly payments.