Sader Law Firm Blog - Kansas City Bankruptcy Attorney Blog

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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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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