Great news for the University of Phoenix loan borrowers! Currently, it is more likely to take advantage of the University of Phoenix Student Loan Forgiveness through various programs. Whether you owe loans directly to this institution, or you got federal and private loans, there exist opportunities to eliminate the debt fully or partially.
Before choosing one of the solutions we are going to present in subsequent sections, it is better to get expert help. All the forgiveness options bring benefits and risks attached to them. Hence, getting third-party debt specialist help can facilitate a better decision-making process. Besides, each option has different eligibility and application requirements. Every year, thousands of applications are being rejected due to the unclear understanding of eligibility factors and technical mistakes in the application process. Having an expert by your side will ensure that you avoid such barriers and maximize your chance to get approval from a University of Phoenix Student Loan Forgiveness.
One of the excellent opportunities for borrowers who got an education at the University of Phoenix is applying Borrower’s Defense to a Repayment program. This program benefits federal student loans if the school misled the borrower or engaged in misconduct. Whether the university acts against the laws or omits necessary regulations, a borrower can demand student loan forgiveness on these grounds.
Borrowers’ Defense to Repayment can erase the debt fully or a portion of it. Besides, it can bring cash reimbursement for prior payments.
There exist several student loan forgiveness programs that consider mandatory service or consecutive payments for a specific period as an eligibility factor. Differently, Borrower’s Defense to Repayment does not require additional action. It is enough to prove the misconduct of the school and get rid of the debt. However, misconduct should be directly related to educational matters or loan terms. Other issues, such as personal injuries or harassment, cannot be grounds for this forgiveness opportunity.
Before explaining the application process, first, you need to keep in mind that an application can be against only one school. If you want to file Borrowers’ Defense to Repayment against multiple schools, there should be different applications for each of them.
It is possible to apply this method of University of Phoenix Student Loan Forgiveness through online portal, mail or email. One of the easiest and fastest ways is using the online application form. In this application, you will be asked about essential information like contact numbers, enrollment time, tuition fee, etc. Besides, you need to upload documents that can prove the university’s misconduct. You should also write and explain why you think you qualify for this program and how you were misled. Usually, the necessary documents include the transcripts, enrollment agreements, registration forms, promotional materials like brochures, email communication with the school officials, etc. When applied through mail or email, a borrower needs to fill the form online and then print it to sign. The form and supporting documents should be sent to the Department of Education mail or email address.
As mentioned before, the Borrowers’ defence to Repayment Program only grants forgiveness if the university misled a student. Here, the borrower should prove the misconduct with all possible means to get debt relief. Previously, the University of Phoenix was sued by the Federal Trade Commission for several issues that could have misled the students. Hence, borrowers of the University of Phoenix have a higher chance of receiving the BDRP benefit because there happened similar cases against Phoenix University before. The Department of Education can consider those prior cases while reviewing the borrower’s application and might favour the case.
Intending to provide fair conditions to students and eliminate the waste of federal funds, the Federal Trade Commission sued several entities before. Some of these parties were the DeVry Education Group and the Career Education Group. Phoenix University and its parent company- Apollo Education Group, also faced FTC charges. According to the claims of the FTC, the university engaged in misrepresentation to attract students. FTC claimed that the university’s ad called “Parking Lot” created false expectations about job opportunities. Besides, the university recruiters misled the students with incorrect job replacement information, according to the commission.
As a result of this lawsuit, the university and the parent company agreed on an all-time greatest amount of settlement for such cases – $191 million. Out of this money, $141 million was in the form of University of Phoenix Student Loan Forgiveness, and the rest was cash refunds to borrowers. Besides, the parties were responsible for notifying credit report agencies to delete any debt-related issues from the credit performance of borrowers.
Previously, we have discussed the Borrowers’ Defense to Repayment program and its benefits for federal loans. However, students use different ways of funding for their educational loans. Federal loan is just one of these ways. Another method is getting debt directly from school. In the lawsuit, the settlement and agreed forgiveness amount only benefit borrowers who owe directly to the school and who enrolled between 2012 October and 2016 December. Other debtors with federal and private loans cannot qualify for this opportunity.
If you have a federal loan, you can benefit from the excellent option- Borrowers’ Defense to a Repayment plan. Besides, there exist different forgiveness programs based on mandatory service or consecutive payments. For instance, Public Service Loan Forgiveness helps borrowers to eliminate the debt once they make 120 successful payments. It takes around ten years of dedication to get the rest of the debt eliminated with the help of the PSLF program. Another opportunity can be Perkins Loan Cancellation which discharges some portion of the debt per year of service in return.
Some borrowers might not qualify for forgiveness opportunities. In this case, discharge programs can be helpful. There exist discharge plans for borrowers with disabilities or whose schools closed during the enrollment. Moreover, declaring bankruptcy is also an option, but it is not recommended unless surviving with debt payments is impossible. Bankruptcy causes a substantial negative impact on credit performance which lasts up to ten years. During this period, it becomes challenging to rent an apartment, get a job, insurance, or a new line of credit. Besides, bankruptcy does not ensure that the debtor will successfully eliminate the loan. Sometimes, bankruptcy can bring a more favorable repayment plan. Therefore, it is not an effective way of receiving loan forgiveness.
If a borrower cannot eliminate the debt through University of Phoenix Student Loan Forgiveness and other federal programs, it is better to start looking for ways to repay the debt effectively. Consolidation is one of the methods which makes the debt repayment process more manageable. In general, consolidation of debt means combining multiple loans into one. As a result, you get a new loan with a higher amount to cover others.
However, this process can bring several benefits. First, you can get a lower interest rate for your new loan. In this case, the borrower will make one monthly payment lower than the total payments of multiple loans. Plus, having one payment makes debt management simpler. Commonly, the debtors forget about their payment amounts, deadlines and other loan terms if they have multiple loans. With one loan, it is easier to keep track of the payments. Though consolidation does not erase even a tiny portion of the debt, it can help the borrower to end the debt spiral by paying it back fully.
Consolidation is not the only program available to federal loans which aid borrowers to repay the debt. There exist many repayment plans which create favourable conditions for the debtors, so that they can meet the obligations with their current financial capabilities.
One of such repayment plans is Standard Repayment. This plan requires a fixed payment per month so that the borrower can finish debt payments within ten years. This program aims to aid borrowers who have the financial capability to meet obligations, but they want to get rid of this best as soon as possible. Another program is a graduated repayment plan. It mostly benefits borrowers who pass through financial difficulties. Hence, this program requires low payments initially and then gradually increases the payments.
Debtors also mostly get the help of Income-Based Repayment plans because this program fits their revenue levels. For instance, the repayment plan is based on 10-15% of the discretionary income. In this way, borrowers can meet their obligations without enormous difficulties.
Let’s quickly summarize the proposed University of Phoenix Loan Forgiveness options. The settlement that brought $141 million worth loan forgiveness was for the debt directly owed to the school. Federal loan borrowers could not benefit from the settlement. However, they still have opportunities such as Borrowers’ Defense to Repayment, other forgiveness and discharge programs. Even if the debtor cannot eliminate the debt, he/she can utilize consolidation or repayment plans to get rid of the debt by paying it back fully.
Private loans, in turn, do not qualify for these options. In general, there is no government-level forgiveness opportunity to cover private loans. Yet, there can be some options for such borrowers to at least gain some favours for their loan terms.
One of the possible solutions for the debt problem can be a settlement with the lenders. This solution involves negotiations with the lenders to convince them to provide favourable loan conditions, even for a temporary period. For instance, if borrowers cannot meet the current level of monthly payments, they can ask the lender to decrease it. However, keep in mind that the lender is not obliged to respond to the request positively. They can still maintain all the original loan terms and reject what the borrower asks for.
Yet, accepting the request is also beneficial for the lender. Sure, they will lose some income temporarily if they decrease the payments. However, if they do not help the borrower, they can default and not be able to return the debt at all. One can argue that the lender can still sue the debtor and collect the money. It is possible, but the costs of the lawsuit and hiring an attorney are high. Plus, this process is time-consuming. Hence, it can be for the favour of the lender to agree with the borrower’s request.
Negotiating with the lender is a challenging process. During the whole process, the borrower should keep in mind that they want a favour from the lender, and the lender is not obliged to agree. Hence, the debtors should show the highest degree of respect and communicate patiently without arguing or causing disputes with the lender.
Besides, consolidation is also an option for private lenders. Though federal consolidation is not available for private lenders, they can still find private organizations which provide consolidation services. Alternatively, getting a new credit line with a higher amount to cover existing loans can be a choice for private lenders.
To sum up, there exist multiple options regardless if you have a federal or private loan. University of Phoenix lawsuit created an excellent opportunity for borrowers owing directly to the school as $141 million forgiveness was granted. Federal borrowers cannot get the benefit of this University of Phoenix Student Loan Forgiveness, but they can still apply for several programs to eliminate the debt fully or partially. If the discharge is not possible, these debtors can also find ways to reduce the payments. Private lenders, on the other hand, cannot get forgiveness, but they can utilize different ways to manage the debt terms.
If you cannot decide which program is the most suitable and brings the highest benefit, it is advisable to contact Student Loans Resolved. We have a team of debt and finance specialists who have years of experience in this field. They will analyze your financial conditions and difficulties to find or choose a solution for all your debt problems. Contact us now to end your debt nightmares today.
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