Florida Student Loan Forgiveness Act

Florida student loan forgiveness is the set of legal tools that a student loan borrower in Florida uses to obtain relief in their student loans. These tools can result in lower monthly payments, a reduction in the total amount owed, settlement with the student loan lender, or in some cases forgiveness of the balance.

The available tools in Florida for student loan forgiveness depend on a combination of federal and Florida state law. Unfortunately, information about how to seek forgiveness or reduction of student loan debt in Florida can be hard to find. Often people want help just knowing what their options are in addition to help with implementing those options. Other times, it is not the borrower but a family member of the borrower that is seeking information.

The most common questions about Florida student loan forgiveness include:

Can bankruptcy get rid of student loans in Florida?

Florida Student Loan ForgivenessTypically no. Federal law makes it difficult to discharge (legal term for “get rid of”) your student loan debt in bankruptcy. From the government’s perspective, federal law makes it very easy to apply for and obtain a student loan, but the counter to this is that it is hard to get rid of that debt. Almost anyone can get a student loan, but you’ll be stuck with that debt. There are some limited circumstances where bankruptcy can be used to discharge student loan debt in Florida, but it is rare.

That exception involves when student loans impost an “undue hardship.” But the government’s definition of “undue hardship” is likely more stringent than your own. Under federal law, hardship means that you must be able to prove that you will not be able to ever pay back your student loans. In other words, you would have to show that you are permanently and totally disabled to the point where you cannot ever work again.

Florida Student Loan Forgiveness or Cancellation

Federal law allows Florida student loan borrowers to sometimes forgive or cancel their student loans even if the loan is not yet in default (in other words, even if you are current on your loan payments). The particular cancellation program depends on the type of student loan that you have (you can check at www.nslds.ed.gov).

Keep in mind that total cancellation of a student loan is rare. It typically applies for situations when the school has closed, there is a false certification of the student loan, you are totally and permanently disabled, or there was an unpaid refund.

Florida Student Loan Repayment Options

If a borrower cannot obtain forgiveness for the entire student loan and do not qualify for cancellation of the debt, then the primary tool is often in adjusting repayment: either in the amount paid monthly or in forgiveness of part of the total amount owed.

For student loan borrowers in Florida, Repayment options typically come in two flavors: (1) loan consolidation and (2) deferments and forbearance. Loan consolidation takes advantage of a federal program to group all of your loans into one more affordable payment. Deferments and forbearance sometimes allow a borrower to temporarily stop student loan payments altogether. The halt in payments must be for either enrollment as a student, unemployment, or other economic hardship. Even with a forbearance, interest typically continues to accrue.

Student Loan Debt Negotiation

Eventually a private student loan borrower may sue you in a Florida court to obtain a monetary judgment against you for the unpaid balance. These judgments, like any other judgment in Florida, can often be negotiated for a fraction of the total amount owed. Two of the most important factors in Florida in negotiating the student loan debt are (1) the value of your assets and amount of your income and (2) your ability to protect these assets from collection under Florida state or federal law.

 

 

What to Do Next

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Alper Law
Florida Student Loan Forgiveness Act
December 1, 2016