Tag Archives: HigherEducation

Education Department Announces Review of Student Loan Bankruptcy Rule

The Department of Education is planning to review how student loans are discharged in bankruptcy. According to the Education Department, it is seeking public comments on the process for evaluating student loan undue hardship claims during bankruptcy. Student loans are difficult to discharge in bankruptcy because of the undue hardship rule. You must show that repaying your student loans would keep you from maintaining a minimal standard of living, among other factors. Over the past several decades, changes were made to the bankruptcy code that made student loans more difficult to discharge. By the time the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was signed into law by President George W. Bush, both federal and private student loans could not be discharged without showing undue hardship. Congress never defined what constitutes “undue hardship”. As a result, undue hardship is determined by the courts for each individual bankruptcy case….
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What are the Major Differences Between Private and Federal Student Loans?

The most recent statistics on higher education debt show that more than 44 million Americans carry $1.4 trillion in student loans. You read that correctly. This figure implies that Americans owe more in student loans than credit card debt. While a majority of borrowers have federal student loans, there are some who have private higher education debt. Federal loans are funded and issued by the federal government. Private loans are issued by banks or other private sources. However, there are many other differences between the two types of loans. Private loans can have variable interest rates. Interest rates for private student loans can increase. As your interest rates increase, so do your monthly payments. Depending on your credit history, you may be offered lower initial rates by a private lender for accepting this risk. Income-driven plans are not available for private loans. We have blogged extensively about income-driven repayment plans…
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What Types of Jobs are Eligible for Public Service Loan Forgiveness?

Our blog last week discussed one reason why student loan borrowers who enrolled in the Public Service Loan Forgiveness (PSLF) program had their eligibility revoked. Many of the borrowers carried federal loans that are not eligible for PSLF, such as FFEL or Perkins Loans. However, you could also be denied forgiveness because of where you work. Only certain types of jobs are eligible for PSLF. While Congress is poised to kill off PSLF, this does not necessarily mean you will lose eligibility if you are already enrolled. You should be careful if you are seeking forgiveness through the PSLF program and are planning a job change. According to the Department of Education’s website, only the following jobs can qualify for PSLF. Government organizations: Employees at federal, state, local or tribal organizations are eligible for PSLF forgiveness. Examples may include the Central Intelligence Agency or the Federal Bureau of Investigation. City…
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