People here in New Jersey struggling with paying federal student loans often think that bankruptcy is the only way out of their situation. But then they find out how difficult it is to discharge those loans in that bankruptcy, and become discouraged. If this sounds like you, you should know that there are some non-bankruptcy solutions to the problem.
How Can I Get an Administrative Discharge?
This is because for federal student loans, there are certain circumstances where you can get the loan discharged administratively. They are:
- Permanent and total disability
- Closure of the school before you completed the program
- The false certification of you for the educational program the loans paid for
- Unpaid refunds by the school
- Death (yours or of your child if it is a Parent PLUS loan)
This last may seem a bit severe, but the tragedy of losing a child should not be followed by the continued financial burden of the student loan.
Also, if you dropped out of some classes before the deadline to do so, and the school did not refund to you the cost of those classes paid for by the loan, you can get that portion discharged.
The first item, disability, is often the best alternative to bankruptcy. Instead of trying to prove undue hardship based on an inability to work because of disability, why not just apply for the discharge directly to the U.S. Department of Education? That path can be much more straightforward, as well as less expensive as far as legal fees are concerned.
So What Do I Do?
If you live in southern New Jersey and would like to consult with me on your loans, please feel free to call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss your case.
If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.