Laurel Road Student Loans
Some of the benefits and advantages of federal student loans is given below. Unlike other forms of consumer debt student loans receive special protections under current laws ranging from collection to bankruptcy. This special status applies not only to the primary borrower (the student) but also to any co-signer on the loan. Student loans are one of the hardest types of debt to shake. Current U.S. bankruptcy law allows a court to discharge these loans in bankruptcy only in the narrowest circumstances. In fact the legal requirements for discharging education loans are so formidable to meet that most bankruptcy attorneys avoid student loan cases altogether. Since so few loan borrowers qualify for bankruptcy discharge under the law the vast majority of loan debt is carried until the borrower repays the loan or dies -- although some non-federal student loans even survive death passing the debt on to the borrowers co-signer.
But Brazos once again suspended its education lending program late last month citing continued turmoil in the student loan industry. Brazos Executive Vice President Ellis Tredway said his organization simply "ran out of time to get everything in place" to issue new student loans for the fall. The Massachusetts Educational Financing Authority which issued more than $500 million in college loans to 40000 Massachusetts college students and their families last year had already suspended its federal student loan program in April. Now MEFA has also pulled the plug on its non-federal private loan program which provided Massachusetts students with fixed-rate private student loans. "While we continue to pursue every possible option raising the necessary funds to offer fixed-interest rate private education loans is taking longer than originally projected and has become even more challenging" said Tom Graf MEFAs executive director. Students Face the Uncertainty of Switching Lenders With over 8 million students and parents having turned to federal college loans in 2006-07 according to the College Board the number or families that stand to be affected by the ongoing wave of lender departures this year is not unsubstantial.
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Student loans are basically non-dischargeable almost everyone knows this. There are some very specific circumstances where even today you can have your student loan debt discharged but that is a narrow exception that often requires a fight and money to fight. We will discuss the current state of dischargeability in a future post. The landscape around student loans and bankruptcy has not always been so desolate. Not so long ago these loans were dischargeable. Back when they were dischargeable the cost of an education was much lower and the total student loan debt was a fraction of what it is now. With student loan debt currently being a 1200000000000.00 (One Trillion Two Hundred Billion) dollar problem holding people back from purchasing homes or taking part in the broader economy with a little help they may become dischargeable yet again.
These income-based student loan payments will be calculated as 15 percent of the amount by which a borrowers adjusted gross income exceeds 150 percent of the poverty line. (For individuals the 2009 poverty line is $10830 in all states except Alaska and Hawaii. The complete federal poverty guidelines for 2009 are available on the website of the U.S. Department of Health and Human Services.) For example: 150 percent of the current individual poverty line of $10830 is $16245. If a borrowers annual adjusted gross income is $25000 the monthly payments on her or his eligible student loans would be capped at $109.44 - 15 percent of the difference between $25000 and $16245 divided by 12 months. If a borrowers annual adjusted gross income is $40000 the monthly payments on any eligible student loans would be capped at $296.94 ($40000 - $16245 multiplied by 15 percent divided by 12). Income-based monthly payments will be adjusted annually based on a borrowers federal tax return from the previous year.