Americans are facing the most dire financial situation since the opening days of the Great Recession in 2008. In fact, Goldman Sachs suggested that unemployment claims hit more than 2 million in a short period of time. Treasury Secretary Steven Mnuchin ominously warned that the U.S. could experience a 20 percent unemployment rate. Mnuchin clarified that this scenario could occur without intervention, but later walked back his statements. Widespread layoffs have many people with student loans worried about making payments. Fortunately, President Trump suspended payments for federal student loans on Friday. The freeze is in place for 60 days, but could be extended. You can reach out to your loan servicer to take advantage of this change of events. The economic impact of the coronavirus pandemic could last for many months. Some people affected by the crisis may be unable to find work for a long time. If you recently…
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It’s a topic that has been showing up over the last couple of years and appears to be gaining steam. Student Loan debt loads may be hurting the economy. As a generation graduates with higher student loan debts than any before it, economic data is starting to show these young people are having increasingly difficult times paying back their student loans or contributing to the economy through car or home purchases. Forbes- February 2012: Student Debt the Next Financial Crisis? Washington Post February 2014: Student Debt May Hurt Housing Recovery New York Times – May 2014: How Student Debt May Be Stunting the Economy Just last week, President Obama issued an executive order designed to provide help to approximately 5 million student loan borrowers. We have been seeing it for a while. As bankruptcy attorneys in Kansas City, we get phone calls from potential clients seeking information about their bankruptcy…
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President Obama has signed an Executive Order affecting approximately 5 million student loan borrowers. It primarily affects two groups of borrowers: Those with federal direct loans who borrowed before October 2007 and; Those who have not borrowed since October 2011. Payments will be capped at 10% of the borrower’s monthly income. As of the date of this writing, it is not known if this applies to a borrower’s gross pay or take-home pay. The cap is hoped to be available to these borrowers by December 2015. This new repayment cap is an addition to other repayment plans based on income, such as the Income-Based, Income-Contingent, Income-Sensitive, and Pay As You Earn repayment programs. Student loan defaults and high monthly payments continue to be growing concerns in America. While these repayment options are available for various federal loans, they are not available for private student loans. This Executive Order does not…
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