Category Archives: Student Loans

Student loan debt is a common source of financial strain for Americans. Our Kansas City bankruptcy attorney helps those struggling with student loan debt.

Some Colleges are Implementing “No-Loan” Policies, Eliminating Student Loan Options for Students

As some student loan repayments have returned following a nearly four-year pause, some institutions are taking action to ensure students do not end up in large amounts of debt by implementing “no-loan” policies, which will allow students to receive full financial support from the outset of their college education. About two dozen schools have introduced policies that will meet 100% of undergraduate students’ financial needs through grants and other financial aid rather than student loans. These universities are even eliminating student loans from their financial aid packages altogether. In an article from CNBC, Nicole Hurd, the president of Lafayette College in Easton, Pennsylvania, stressed the importance of ensuring that college education is accessible for students, highlighting it as the best investment they can make in themselves. Particularly at Lafayette, families with household incomes of up to $200,000 will have their financial needs met through grants and work study. Of course,…
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More Americans with student loan debt file for bankruptcy following policy changes

There has been an increase in borrowers who are filing for bankruptcy related to eliminating their student debt following recent federal government policy changes, which allow individuals to eliminate this type of debt if they meet certain economic hardship criteria. The new guidelines were put in place in November 2022 with the goal of ensuring more transparent and consistent expectations for discharging student loan debt. Borrowers will first complete an attestation form so the government can assess the discharge request. Next, the government will calculate whether the debtor’s expenses equal or exceed their income. If they do, the U.S. Justice Department and U.S. Department of Education will declare the borrower unable to pay their debts. The DOJ will determine whether a borrower’s present inability to pay will continue in the future. They consider variables like retirement age, disability status, long-term unemployment and if the borrower did not complete their college…
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Borrowers Experiencing Added Financial Stress as Student Loan Payments Resume

With certain student loan payment requirements set to resume after a nearly four-year pause, the Federal Reserve Bank of New York found this may not result in a significant impact on the economy. However, borrowers have taken on more debt burdens since the COVID-19 pandemic. Despite the relief the government provided during Covid, all this debt combined results in challenges that there may now be additional payments unaccounted for within an individual’s current budget. While most student loan debt is not dischargeable, bankruptcy may provide relief for other debts and eliminate the need to take on more credit card debt or personal loans. This is especially true for those facing any of the circumstances outlined in this recent Yahoo! article that detailed the Fed’s study and other reports related to the economic impact when payments resume for thousands of individuals. The Fed’s study found borrowers would reduce their spending by…
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