According to USA Today, a new law touted by the White House concerning student loans will clear $700 million in profits to the federal government over the next 10 years.
President Barack Obama passed the law that regulates interest rates on federally backed student loans earlier this summer. “It was hailed by politicians on both sides of the aisle as a win in the campaign to combat a rising tide of student loan indebtedness,” USA Today reported.
Some people consider the law nothing but a band-aid and bad legislation for students and families. “As soon as the interest rates begin to go back up, this deal ends up worse for students and their parents than if they did nothing,” Jessica Thompson, the senior policy analyst for the Institute for College Access and Success told USA Today. Thompson told the paper that the federal government “is absolutely making more money because of these changes.”
According to USA Today, a study showed that about 57 percent of students receive some form of federal financial aid, with the average debt for a college graduate totaling more than $26,000 in many states. Nationally, students and graduates owe more than $1 trillion in student loan debt—more than American owe on credit cards, with more than $180 billion of student loan debt in default.
The student loan bubble is about to burst. Highly questionable decisions by politicians, as well as greed on behalf of lenders, have led generations of students and their family members to financial distress and despair. Unfortunately, federal laws have made it very hard to discharge student loans through bankruptcy. We have long urged legislators to loosen laws, which would allow borrowers with student loan payments to discharge portions of their debt through bankruptcy.
Even if you cannot get your student loans discharged through bankruptcy, Chapter 7 and Chapter 13 filings remain an option for people grappling with housing payments, credit card bills and other forms of debts, on top of high student loan payments.
If you are struggling financially because of student loans, you can contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation. Our attorney can work with you to eliminate or consolidate your debt, stop a foreclosure or restore your financial freedom.
Law Firm of Kevin D. Judd
Judd’s Judgment: Dischargeable debts in Chapter 7 bankruptcy include credit cards, medical bills and judgments.