Tag Archives: student loan

Student Loans and the Economy

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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Student Loan Executive Order Exception

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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Student Loan Discharge Denied: Court Says ‘Not So Fast’!

District Court Denies Debtor Discharge of Student Loans: Appellate Panel Says ‘Not So Fast’! We’re following a potentially important bankruptcy case in 2013 that may affect the ability of individuals to discharge student loan debts in bankruptcy. On August 21, 2013, the U.S. Bankruptcy Appellate Panel for the Eighth Circuit (B.A.P.) reversed and remanded a decision of the U.S. Bankruptcy Court for the Eastern District of Missouri which denied a discharge of a debtor’s student loan debt. The B.A.P. found that denying the debtor a discharge of her student loan debts to National Collegiate Trust was an undue hardship on the debtor and remanded the decision to the Bankruptcy Court to look at each individual loan owed to National Collegiate Trust to determine if the debtor could pay any one or more of those loans owed over the course of a year. The Debtor in this case did not seem…
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