As of late last week, Senate lawmakers were unable to come up with a compromise to prevent federal student loan interest rates from doubling. Rates will jump from 3.4 to 6.8 percent today for new Stafford student loans, unless an agreement was reached before this weekend.
According to the AP, the spike would affect 7 million students who receive Stafford loans, which serve needy students. “We’re working right through immigration,” Senate Majority Leader Harry Reid, D-Nev told the AP. “We are going to wrap up immigration either Thursday or Friday. The only question now is whether we can come up with a list of amendments. And I think both sides want to do that, but having said that, I don’t know we can do it.”
According to the AP, if no action is taken, senators will depart for a July 4 recess and could retroactively reduce the interest rate. “I have said all along that we need to keep interest rates at 3.4 percent. Extend it for at least another year,” Sen. Tom Harkin, chair of the Senate Health Education, Labor and Pensions Committee told the AP. “It needs to be decided within the framework of the overall Higher education. What are we going to do about college affordability, and transparency, and holding colleges accountable for outcomes and graduation rates? That’s where this ought to be, not separated out individually.”
Last July, a report released by the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education showed that student loan debt stood at more than $1 trillion dollars nationally. For many student loan borrowers, a Chapter 7 or Chapter 13 bankruptcy can still help even though their student loan debt is nondischargeable, as you can discharge credit card debt, medical bills and unsecured personal loans.
If you have student loan debt, bankruptcy may be able to help you even if you thought it could not. Contact our Washington DC and Maryland bankruptcy lawyer to learn more about whether you should file bankruptcy to deal with your student loans.
Law Firm of Kevin D. Judd
Judd’s Judgment: Last year, nearly 15 percent of student loan borrowers defaulted on their loans, with an average balance of $23,300.