Student Loan Debt with Christie Arkovich

Sean Yesner: Welcome to another episode of the Yesner Law Podcast. My name is Sean Yesner and I’m happy to have a guest with me on this episode, Christie Arkovich. Welcome, Christie.

Christie Arkovich: Thank you, Sean. I’m glad you invited me because I’m trying to get the word out on student loans and what you can do so every little bit helps.

Sean Yesner: Absolutely, and that’s what I would love to talk about today is student loans. Christie is another attorney who, very much like me, does a lot of the same, foreclosures, bankruptcies, short sales, loan modifications, consumer cases, and consumer protection type cases, but Christie has a lot of experience with student loans, and so that’s why I wanted to have her on this episode of the podcast. A lot of times when people think about student loans they think about, ‘can I file bankruptcy to discharge my student loan?”, and the answer in a lot of cases is, no you can’t. But, in talking to Christie, there are actually some non-bankruptcy alternatives available to either eliminate or soften the blow of a student loan, right?

Christie Arkovich: Yes.

Sean Yesner: What are some of those things? What can you do to help someone who is being overburdened by their student loan payment?

Christie Arkovich: Sure. Most people come into see us and they are either not making payments and they are in default, and in that case, they might be facing garnishment or something like that, or, they’re making these huge payments, seven fifty, a thousand a month, and they’re not making a dent: their loan balance is actually going up. For those clients, they realise they have to do something but they recognise that most of the publicity out there is that you cannot discharge a student loan in bankruptcy, most bankruptcy attorneys will tell clients that, it’s on their websites and so forth, but the fact and the matter is that there are a lot of things outside of bankruptcy we can do, and even inside we can do a few things, unlike the traditional undue hardship cases that’ll we’ll hear about. We’re not targeting those, that’s very difficult to win, so outside bankruptcy-

Sean Yesner: And when you say undue hardships, for those that are not familiar, and correct me if I’m wrong, but what we’re talking about is a person who files bankruptcy and says, ‘I have these student loans and even though they would not normally be dischargeable, I have some type of extreme, undue hardship that prevents me from having the ability to pay back my student loans, and so for that reason, bankruptcy court, you should go against the normal rule that they’re not dischargeable and in my case you should discharge them.

Christie Arkovich: Yes. The undue hardship cases are difficult to meet because you have to show for the majority of the repayment period, which is nearly twenty-five years, that you can’t repay your student loans and

maintain a minimum standard of living, and that’s very hard to show so we’re not focusing on those so much. For the bankruptcy clients, there are actually a couple of niches right now. We will frequently come into contact with clients who are siblings or friends of ours, and they can be discharged in bankruptcy if they’re willing to file. They don’t fit the qualified, educational definition. We also are targeting, and we filed a case a couple of weeks ago in Orlando on behalf of a student who went to a Caribbean medical school. I don’t know if you know this but there are fifty medical schools in the Caribbean, and the majority cannot get federal funding. Only three or four are eligible. For those other schools, for anyone who has paid with private loans, those are potentially dischargeable in bankruptcy due to a new case, [?] that came out in the spring. That particular case was reversed because it didn’t properly serve the bank but has been cited favourably by two other cases and it’s really the beginning of something new, I think.

Sean Yesner: Is that a Tampa case?

Christie Arkovich: No, these are outside of Florida. We’re hoping to bring a Florida precedent in our Orlando case.

Sean Yesner: Okay.

Christie Arkovich: Then we’ve got one in West Palm that we’re about ready to bring on behalf of a friend who has signed for a now deceased friend who was the borrower, so we think the rules also would permit him, permit his loans to be discharged. So, we do have a few specialised cases in bankruptcy but ordinarily, we’re not filing a lot of undue hardship cases because that standard is very tough to meet. It itself is on appeal in the eleventh circuit but we have to wait probably another year to hear on that. Really what we’re focused on is the ‘outside of bankruptcy’ things.

Sean Yesner: What are some things you can do outside of bankruptcy?

Christie Arkovich: If we’re talking about federal loans, for instance, there’s something brand new. Everybody’s heard about ITT closing. It closed down in September, it’s in the news everywhere. As a result, well not necessarily as a result of that, but as a result of Corinthian last year, the Department of Education has created a new program called Defense to Repayment, and basically what you have to do is show that some kind of fraud occurred, that the student was either the victim of some kind of misrepresentation on job placement rates, job guarantees, salary ranges, accreditation is another one; they think that the credits will transfer, they’re led to believe that the national accreditation of a for-profit school is better than regional which it’s clearly not. There are differences in accreditation, a lot of students don’t realise that. So, they have some kind of misrepresentation, they rely on that, they take out the federal loans. If they can show that they

discovered that this was a lie, that this was untruthful within the last four years, we can go back potentially twelve years to perhaps discharge their federal student loans. That’s a new program, it just came out on December 1st.

Sean Yesner: You mean student loans that were taken out twelve years ago?

Christie Arkovich: Yes. As long as we can use the discovery rule in the state of Florida under fraud cases to go back and say that our client learned of it within four years, they can now go back up to twelve years for student loans that are dated that long. We have to have something discovered within four years. Basically, we’re starting to file those applications. That’s on behalf of students for ITT. IADT is another popular one here in Tampa, International Academy of Design and Technology, there are a lot of those. Before, they really didn’t have this [?]. There was an IDT class action filed by another attorney locally a couple of years ago, and it was dismissed by the Middle District of Florida, their class action, because they were ordered to arbitration. One of the unfortunate things is many of these enrollment agreements that the students sign unknowingly have arbitration clauses and so the class actions don’t really go anywhere, and now in ITT’s case, they’re in bankruptcy, so I’m not sure who would want to sue them. Interestingly though, yesterday there was a bunch of documents filed in an adversary proceeding brought by ITT students. There’s a non-profit group that is handled by some Harvard attorneys and they filed, yesterday, adversary proceedings with a bunch of ITT documents and things, so maybe they’ll get an adjudication and if they do, of fraud, then that can be used in any of these DTR applications.

Sean Yesner: Wow.

Christie Arkovich: So, that’s pretty big right now.

Sean Yesner: What else is out there? What else?

Christie Arkovich: DeVry, they were just cited and settled for improperly stating a ninety percent job placement rate, so we’ll start to see those applications come in. ICS was shut down in November. That’s the accreditor for these for-profit schools-

Sean Yesner: Oh wow.

Christie Arkovich: -and it lost its federal accreditation so that’s huge because now all these schools have eighteen months to go find another accreditor and many of them are probably going to close when they don’t meet the qualifications required, so we will have a lot more.

Sean Yesner: Is there a difference between the school advertising, puffing, versus, they really didn’t have, I mean, if they say, ‘our job placement rate is ninety percent’, and it ends up being eighty-eight percent or are they

saying, ‘you said the job placement was ninety percent and its really twelve percent’?

Christie Arkovich: It depends on how specific they are. In DeVry’s case, that the FTT brought an action, they had on their website ninety percent job placement, but the problem is that they included things that they shouldn’t have included in those calculations. They counted people that already had the same job as being employed after the DeVry education.

Sean Yesner: People that had a job, went to DeVry, and kept their job.

Christie Arkovich: Went back to the same job. They counted people as waiters when they weren’t utilising the education, so how they stated the job placement rate, they would say it was in their field of study, and so they were specific. The more specific the representation, the more likely there’s fraud. If it’s broad ‘you’re going to get a job’, well that’s puffery. That’s something that’s not really actionable.

Sean Yesner: Right, okay.

Christie Arkovich: So, these applications are one thing. With federal loans, there are also a lot of great income-based payment plans that have debt forgiveness with the federal government, those are excellent. The problem there is people sometimes will pick the wrong one so sometimes some advice is to get into the correct program is helpful. That basically is intended to lower the payments, because our whole goal with these student loans is to try to get folks into an affordable and sustainable payment with an end in sight because that’s not what we’re seeing now. Before a client comes to us, they usually have a payment that’s outrageous and they can’t possibly make it, it’s equal to their mortgage payment. Our goals are trying to get a mortgage payment down to something that might be more car level or car payment, something down to maybe a utility bill level, and it’s working. We’re not trying to get rid of loans entirely, we’re trying to get them reduced, and so the income-based programs are excellent for that. We can usually help nine out of ten folks that come and see us. Every once in a while, there’s someone that we can’t do anything for, of course, and then, you’ve got those private loans, and the private loans are entirely different. There are no income-based programs, but for those we might have a statute of limitations, we might have consumer law violations. One of our favourite tools that we like to use right now is we like to tell our clients, revoke consent to call your cell phone. Verbally talk to the servicer, tell them not call, keep track of calls, write down when you told them, and potentially the violation is five hundred to fifteen hundred dollars per call and that creates some great settlement leverage to get those loans down, because our goal in private loans is, unlike federal, they do settle, and we often can get between ten and fifty cents on the dollar, maybe not all at once either, some are lump sum but other ones might have a little bit

of a down payment and payments that go out two, three, five, ten years, but we’re trying to get away from the twenty, twenty-five years forever type plans and get it much more reasonable, and most of this all helps people rebuild their credit so they can buy houses in a couple of years and so forth, so there are things we can do.

Sean Yesner: Yeah and with a lot of these options they are also avoiding bankruptcy in a lot of cases, which I know the first thing whenever I get a call about a student loan issue it’s, you know, ‘do I have to file bankruptcy?’, and the irony there is, even if you do file bankruptcy like we talked about it, it may be really hard or impossible to discharge that student loan anyway, so it’s interesting that they’re getting the results that they wanted without the drawbacks that they were afraid of and they’re still able to settle the debts, they’re still able to get, like you said, their student loan payments down to something that’s affordable.

Christie Arkovich: We can also cure defaults, like you’ve got a client on a federal loan that’s facing wage garnishment, or tax intercepts, or maybe even social security offsets, for those clients we can do rehabs, consolidations, bring them current, help their credit out, and we don’t need bankruptcy for that either. The only time we really use the bankruptcy is if we can’t rehab and we can’t consolidate for different reasons, then we’re forced into a bankruptcy to stop the garnishment. I don’t think I’ve actually seen that. I’ve always been able to rehab or consolidate-

Sean Yesner: Oh good.

Christie Arkovich: -for a client.

Sean Yesner: Cool. Is there anything else that you wanted to talk about or mention?

Christie Arkovich: Just to reach out, try to get information, don’t assume you can’t do anything because most of the clients who come and see me – ‘I didn’t think I could do anything but I thought I’d just check!’ [laughing].

Sean Yesner: Not to speak for you but I do free consultations, I assume…

Christie Arkovich: I do too.

Sean Yesner: So, even to reach out to you, to reach out to me, to reach out some attorney, I think most of the attorney’s in the Tampa Bay region anyway, in terms of these types of issues will do a free consultation and I think we’re all pretty good about bending each other’s ear and referring cases to each other and all that other kind of stuff too, so I think the message is, get to one of us and we’ll get you to the right place to get the resolution you need.

Christie Arkovich: And our free consultation can be done on the phone. A lot of people don’t have time to come in, it’s a long drive, we work out of county too, so we do phone consults pretty much every day. Tuesday

through Thursday is the best day to reach us. Things are working, so I don’t want people just to assume that there is nothing that they can do.

Sean Yesner: Right. So, if someone does want to reach you, what’s the best way that they can do that?

Christie Arkovich: Our phone number is 813-258-2808, but we love email; we’ve got a website under my name: We’ve got a blog, you can link to it on our website, it’s On that, we’ve got a section on student loans with quite a lot of information on there, and we have a Student Loan Survival Centre that has a lot of information too. We’re very informational on our website because the student loan program is the least transparent area of law I’ve ever seen, and we try to help with that transparency problem to let people know why we’re doing what we’re doing, what can be done, and make it more visible.

Sean Yesner: Very nice, and for the listeners I will post all those links in the notes so you’ll see all those if you didn’t catch when Christie was giving the phone number, the website, the blog site, I’ll post all of that, as well as my contact information which is or the website, and also I’ve got my social media pages, Facebook, Google, all that kind of stuff. Christie, I appreciate you being on the episode, and I appreciate all the information and thank you for being here. Like I say at the end of every episode, if you have questions that you think would make a great topic for a future podcast, please reach out to me, let me know, we’ll make sure we address that topic in a future episode. I thank you for your time in listening. Thank you again, Christie, for being a guest on the show, and I will talk to you on the next episode of the Yesner Law Podcast.

Christie Arkovich: Thank you, Sean.

Sean Yesner: Thanks.

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