US bill would ease forgiving of student loans during bankruptcy

Bankrupt student loan holders may have access to a new safety net if they have private loans, thanks to a bill introduced to the United States House of Representatives earlier this month.

The “Private Student Loan Bankruptcy Fairness Act of 2010” was introduced in the House April 15 and if passed, would make it easier for students to terminate their private student loan debt if they declare bankruptcy.

“This bill will help to ensure that people who seek higher education to better their futures are not dissuaded from doing so by the threat of financial ruin,” bill sponsor Rep. Steve Cohen, D-Tenn, said in his address of a committee when the bill was introduced.

State should support student loan reform

Shortly after President Obama pushed his health care reform through Congress, Idaho became the first state in a growing coalition rallying against the bill as an unconstitutional act of the Federal Legislature. At the same time, the state’s budget cuts to higher education are forcing college students to pay higher and higher tuition rates. How are these distinctly divergent concepts linked?

The answer is simple. The bill not only changed the face of health care in America — it also revamped the student loan system. “What’s gotten overlooked amid all the hoopla, all the drama of last week, is what’s happened with education,” Obama said in a speech at Northern Virginia Community College, reported by the New York Times.

Obama promotes ‘overlooked’ changes to student loan program

President Obama said today an overlooked part of the new health care law will help Americans get a college education by lowering the costs of student loans.

Under the new rules, the government will lend money directly to college students, without the involvement of banks as the “unnecessary middlemen” in what Obama called a “sweetheart deal” that provided that with billions in interest.

“Those were billions of dollars that could have been spent helping more of our students attend and complete college,” Obama said to an appreciative audience at a community college in Alexandria, Va., just across the river from Washington, D.C.

White House Highlights Higher Education And Student Loan Reform

They were the first in their families to attend college. In addition to the values and of hard work and service that they inspired in me, their examples are what motivated me to continue my education and earn a college degree.

Obama proposes changes for student loans

As President-elect Barack Obama prepares to take office in January, all eyes are on his plans for higher education—an area of concern for one of his biggest groups of supporters.

On Election Day, Obama claimed the highest share of the youth vote of any candidate since exit polls began reporting results by age in 1976, according to CIRCLE, a non-partisan organization that promotes research on the political engagement of Americans between ages 15 and 25.

CIRCLE found Obama was favored by 68 percent of the estimated 22 to 24 million youth that voted.

Credit Crisis Crunching Some Student Loans

As turbulence in the economy continues, it’s trickling down; through the housing market and automotive industry, and now onto college campuses.

Financial Aid Offices are trying to help Kansas students stay in school, and pay for it.

Derek Matthews signed into Financial Aid many times before. He hopes this time isn’t the last time. “I was telling my roommate and everybody that you’re going to have to find someone else, get a different roommate because I probably won’t be back next semester,” he said.

Financially, things were fine when the Wichita State freshman started school, then the economy took a turn.

Private student loans tighten

Add students who borrow from private lenders to the ranks of Americans — homeowners and businesspeople, among others — who are struggling with banks’ unwillingness to lend in this risky economic climate.

Although this won’t affect the vast majority of students most of whom use federal loans. Instead it affects the 8 percent of students nationally who rely on private loans, who face high interest rates and increasing difficulty in approval.

Since the U.S. economy began to stagnate, banks have tried to limit their risk of losing more money by increasing the conditions on which they award loans.

Student-Loan Consolidation Choices Shrink

PITTSBURGH (AP) – Kari Schoeneweis will face more than $60,000 in student loan debt when she graduates from Carlow University in spring.

She plans to do what her older siblings did and consolidate her loans to reduce the monthly payments.

“I’m terrified of the loans I’m going to have to pay off,” she said. “I don’t know how I’m going to do it; I guess I’ll get through it somehow.”

Schoeneweis, 22, is among many students who were unaware that consolidation options are more limited now than they were for students who graduated a few years ago. Many lenders suspended consolidations because of consumers’ credit problems, leaving mainly the U.S. Department of Education a the nation’s loan consolidator.

Fed to help secure student loans

The Federal Reserve Bank of New York announced in a Nov. 25 press release it will create a plan to help the security of student loans. But this may or may not be good news for University students.

Although the plan, known as the Term Asset-Backed Securities Loan Facility, had original intentions of helping people meet the household and small business credit needs, it will also play a hand in assuring private loans for students.

“With the economic hardships some student may face [it gives them ] all the more reason for them to use the Federal Direct Loans before ever venturing into the private non-federal education loan arena,” said James Mooney, associate director for the Office of Student Financial Aid.

The Rising Costs of Student Loans

rising costsIt wasn’t until he graduated college in May 2008 that my friend Ben realized the depth of his student loans: $40,000 owed upon completion of a liberal arts bachelors degree. Like many students, he didn’t worry too much about the numbers as he signed loan papers at the start of each semester. The debt totals and their corresponding monthly payments, due some time in the future, weren’t overly concerning at the time.