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We practice CONSUMER BANKRUPTCY
law exclusively. 407-982-3763

We practice CONSUMER BANKRUPTCY law exclusively. 

One of the top Bankruptcy Filers

in the Orlando Area

One of the top Bankruptcy Filers

in the Orlando Area

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  4.  » Are federal programs failing to provide promised debt relief?

The student loan crisis does not appear to be going anywhere anytime soon, and that is perhaps because of the very few options that borrowers have for dealing with this type of debt. Many people in Florida felt optimistic about a program that was intended to provide debt relief for public service employees, but that positive outlook seems to be fading. The Public Service Loan Forgiveness program has only helped 96 people in its 11 years of existence. 

Enacted back in 2007, the PSLF is supposed to forgive student loans for qualifying public service employees. Aside from being a public service employee, applicants must also make qualifying payments for 10 years. This requirement meant that no one was able to actually seek forgiveness until Sept. 2017. Before doing so, however, applicants must first certify that their employment and loans are eligible. 

By June 2018, over 1.2 million people had requested certification, of which approximately 890,000 were certified as eligible. From the certified group, 28,000 went on to apply for student loan forgiveness. However, only 96 people ever received any type of loan forgiveness, making the approval rate less than half of a percent. Although the reasons why the approval rate are so low are complicated and not completely clear, it is possible that many people who qualify for the PSLF were never made aware of their eligibility. A lawsuit against Navient — a student loan servicer — accuses the company of misleading borrowers about the program in an effort to prioritize its own profits. 

While the PSLF seemed promising for borrowers who were able to make regular payments for a decade, some people in Florida struggle with their debts on a daily basis. Although student loans typically cannot be discharged through bankruptcy, debt relief for other expenses can still be helpful. There are both short and long-term considerations with bankruptcy, though, so consumers often choose to consult with an experienced attorney when considering filing.