… the U.S. House of Representatives approved legislation last week that would cut major banks and student loan giant Sallie Mae out of a large slice of the $92 billion university student loan business if passed by the Senate.  Under the bill H.R. 3221 –the Student Aid and Fiscal Responsibility Act of 2009, all new student loans would originate with the Direct Student Loan Program as of July 1, 2010. Many big banks and their supporters are lobbying hard to crush the legislation in the …

Category: Student Loans

Tags: Business Education Loan Sallie Mae Student loan United States House of Representatives

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Many people ask me about discharging student loans when they’re looking into filing for bankruptcy.  Typically, student loans aren’t discharged during bankruptcy proceedings.  It’s not impossible to accomplish if you can show that paying the student loan debt “will impose an undue hardship on you and your dependents”.  Bankruptcy judges use various tests to determine whether a borrower has proven undue hardship. …

Comment by Jacob Decker: … 13 bankruptcy all student loans are essentially put in …

Category: Pay Day Loans , Repossessions , Student Loans

Tags: Bankruptcy Debt Financial services Law Loan Student loan

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As we mentioned in Part I, most debtors find it difficult to discharge their student loans in bankruptcy.  However, there are several other ways to discharge your student loans before, after or even during bankruptcy. As we mentioned in Part I of “ Are There Other Ways To Discharge My Student Loans Besides Bankruptcy? ”, a debtor who cannot discharge their loan in bankruptcy can receive a discharge if they are permanently disabled, dead (and in the case of PLUS …

Category: Bankruptcy , Student Loans

Tags: Bankruptcy Student Loans

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As we have previously mentioned, discharging a student loan in bankruptcy can be difficult to say the least.  In order to receive a bankruptcy discharge for your student loans, you must be able to prove that repaying the loan would cause an undue hardship.  Unfortunately, “undue hardship” has not been specifically defined. This lack of a clear definition has created a situation where two debtors with similar circumstances will …

Category: Bankruptcy , Loans / Mortgages , Student Loans

Tags: Bankruptcy Discharge Student Loans

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According to an article in the Dallas Morning News, Texans are defaulting on their student loans at an alarming rate.

The article said:

“In Texas, 9.3 percent of borrowers defaulted on their federal student loans last year – the highest rate in nearly a decade. Only Arizona had a higher rate, 9.8 percent. The national average was 6.7 percent, based on the data released this week.”

Many Texans are graduating from college are unable to find jobs or if they find a …

Category: Economy , Student Loans

Tags: Student Loans Supreme Court of the United States Texas

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We’ve all heard the saying that the best offense is good defense.  The same goes with student loans.  The best offense is to be defensive in applying for student loans.  Historically, students and parents borrowed money for a majority of college expenses. However, over the last two years, more parents and students are become more prudent in their choices regarding college to alleviate many of the problems with student loans.

According to an article in the Austin American …

Comment by Jacob Decker: … I did not have student loans!

Category: Dallas Bankruptcy , Pay Day Loans , Student Loans

Tags: Education National Association for College Admission Counseling Student Undergraduate education United States

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… Texas a debtor who suffers from autoimmune hepatitis was denied a bankruptcy discharge of her student loans because the bankruptcy court determined that her illness was present when she applied for the loans and attended college.

This case is interesting because the debtor was diagnosed with her disease in 1999; but first took out loans in 2001(after her diagnosis); but by December 2007 the debtor had a stroke and was hospitalized. Although she was released and cleared to return to …

Category: Student Loans

Tags: foreclosure Student Loans

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Many Americans drowning in student loan debt and many of those considering college listened to President Obama with much anticipation as he tackled the issue of crippling debt burdening most Americans who pursue a college education.  President Obama announced that he was working with Congress to create a national program which would ease the burden of student loan debt.

The President said:

To make college more …

Category: Loans / Mortgages , Student Loans

Tags: Discharge relief Student loan

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Over 21 percent of student loan borrowers who attended a for-profit college default on their student loans within 3 years, according to a report released by the U.S. Department of Education.  For-profit colleges claim that the high numbers of low-income students attending their institutions are inflating their default rates.  So does being a low-income student increase your chances of defaulting on your student …

Tags: Chapter 13 Bankruptcy Default Student Loans Supreme Court

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Last year we highlighted a Chapter 13 bankruptcy case where student loan debt was partially discharged. The bankruptcy discharge was challenged by the creditor and has made its way to the Supreme Court.  Here is an overview of the decision made by lower courts last year:

In the case of ( Espinosa v. United Student Aid Funds Inc., No. 06-16421, 9th Cir. 10/02/08) the court stated:

“Our long-standing circuit law holds that student loan debts can …

Category: Student Loans

Permalink: /student-loans/supreme-court-hears-student-loan-dispute/

… Forbes, the U.S. Supreme Court will listen to oral arguments for and against the discharge of student loans in bankruptcy.  The debate will center around the Chapter 13 bankruptcy case of Francisco Espinosa who was able to obtain a partial discharge of his student loans in bankruptcy. That discharge was later challenged by the student loan lender.

The article said:

“Espinosa was working as a Phoenix, Ariz., airline ramp agent in 1992 and struggling to work off $13,250 in student …

Category: Student Loans

Permalink: /student-loans/u-s-supreme-court-to-consider-student-loan-discharge-in-bankruptcy/

Student loans are almost impossible to discharge in bankruptcy, with exception of undue hardship as most graduates who have fallen upon hard times have eventually discovered.  But according to an article in Inside Higher Education, legislators are now moving to consider altering the bankruptcy code to change the way private student loans are treated during bankruptcy.

A quick overview:  …

Category: Bankruptcy , Student Loans

Tags: Bank of America Government Accountability Office Loan Student loan

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