Category Archives: Student Debt
Can Bankruptcy Erase My Student Loans?
One of my law school professors told us that “You never get anything unless you ask.” That seems like a fairly straightforward proposition. But if the student loan discharge statistics are any indication, most Chapter 7 attorneys have not learned this lesson. In places like Illinois, where the Brunner Rule is still in effect,… Read More »
Does An Indiana Bankruptcy End Student Loan Payments?
So far, the education debt crisis has triggered lots of talk and lots of editorials but almost no action. Yet recent evidence suggests that the crisis may be even worse that observers first believed. It appears that the Obama administration inflated repayment rates. Furthermore, a recent study details the long-term effects of massive education… Read More »
Student Loans And Bankruptcy In Illinois
Rising tuition costs and a competitive economy have produced a student loan crisis in America. Roughly 44 million people owe about $1.5 trillion in education debt. This debt load forces many recent graduates to put off certain purchases and also work at jobs they may not particularly like. Until about 1975, education debt was… Read More »
Discharging Student Loans In An Illinois Bankruptcy
Largely because of the pension crisis and dwindling enrollment, Illinois college tuition has increased substantially over the past several years. As a result, the average student now graduates with almost $30,000 in student debt. Even more disturbingly, lower-income students borrow much more than higher-income students. Due to the rising debt load, and the negative… Read More »
Are Student Loans Dischargeable In Illinois Bankruptcies?
Because of the harsh Brunner rule, which is examined below, many people assume the answer to this question is always “no.” But in one recent study, a surprising 40 percent of student loan debtors obtained at least a partial discharge in their bankruptcy proceedings. Despite the relatively high possibility for success, the vast majority… Read More »
Bankruptcy And Student Loans: A Primer
Although student loans are unsecured debts, like credit cards, Small Business Administration loans, and medical bills, they are not automatically dischargeable like these other obligations. In fact, several years ago, Congress even closed the private student loan loophole, which is bad news for former ITT Tech students and other similarly situated borrowers. There is… Read More »
Bankruptcy: Help For Student Loan Borrowers
Forty-four million Americans owe a collective $1.4 trillion in education debt, a staggering total that works out to just under $40,000 per graduate. Because of the large monthly payment, many borrowers must put off large purchases, like houses and cars. Furthermore, a significant percentage of these loans are in delinquency, which indicates that the… Read More »
The ITT Bankruptcy And Student Loans
According to a government estimate, Uncle Sam will eventually spend about $461 million in education debt bailouts for students of the now-defunct college, but as these debts are only dischargeable in bankruptcy in limited circumstances, a taxpayer-funded bailout is probably the only option. The closed school discharge — a loophole in most federally-guaranteed student… Read More »
Feds Scrutinize Student Loan Repayments
Shortly before President Donald Trump was sworn into office, the Consumer Financial Protection bureau filed suit against one of the country’s largest student loan servicers. According to court documents, Navient was guilty of two sins. First, it failed to properly credit additional payments on existing loans, although part of the blame may fall on… Read More »
Changes Coming To Student Loan Payments?
President-elect Donald Trump wants to tweak existing federal programs and help borrowers repay their school loans at a comfortable pace. Under a plan he proposed in October 2016, monthly payments would be capped at 12.5 percent of the borrowers’ income for 180 months (15 years), and once the repayment period expires, any remaining student… Read More »