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Could material reforms be on the way in the student loan industry?

On Behalf of | Mar 20, 2015 | Bankruptcy Reform

If you’re like high numbers of other student loan debtors in Florida and elsewhere across the country, you’re managing to timely pay off your student loan, even if it stands as a notable obstacle with a payment duration spanning a decade or more.

Unfortunately, though, and like those other debtors, that leaves you with very little disposable income following the check you write each month.

That in turn spells a high likelihood that you are a perpetual renter unable to purchase a home. It might translate to an inability to buy a car or adequate home furnishings. Persons saddled with high student debt levels certainly cannot afford to spend much on consumer goods of any choice.

Do you think there’s a connection between the many millions of Americans struggling mightily with student loan repayments and slower-than-desired advances in other sectors of the national economy?

Persons who study the matter certainly think so. As noted in a recent media article on the many problems linked with high student loan debt, many economic pundits are warning of “a potentially looming economic disaster” owing to the ever-escalating amount of money that is being narrowly applied to educational debt repayment.

We noted in our March 13 blog post this “sad and onerous outcome” that befalls some debtors who become delinquent on their loans: The federal government is snatching their tax refund.

That probably worries a lot of debtors, given the almost 17-percent student loan delinquency rate on repayments cited by the U.S. Department of Education.

The Obama administration has targeted student debt as a top-rung policy concern, with regulators — including the president himself — recently weighing in with a number of suggested reforms that will help both individual debtors and the national economy generally.

One suggestion emphasizes some level of loan forgiveness through the bankruptcy process, a possibility that has been largely shut off for student debtors.

It is an interesting possibility. We will follow its progress and keep readers duly informed.


Kingcade & Garcia | A Miami Law Firm