Since there are a lot of folks here suffering from student loan debt, I've decided to sum up the current bills being considered by Congress that would ease the burden on many of us. So get out your pen and paper and write your congressperson, because we probably only have a few more months to get these bills through, considering that Congress has a good chance of changing hands in the coming elections.
1) HR 5043 and S 3219 would allow private student loans to become dischargeable in bankruptcy. These bills are fairly straightforward. If you declare bankruptcy, you can include your private student loans along with your credit cards and all other unsecured debt. Write your Member of Congress and ask them to co-sponsor these bills.
2) S 1541 is a more complicated bill, but it would essentially allow some folks to convert their private student loans into federal student loans, which would then be subject to income based repayment and other federal perks. There are some kinks in this bill though. If you've already used up your Stafford loan eligibility via your federal student loans ($18,500 per academic year), then you have to convert your private student loans to federal PLUS loans. This means that you have to have decent credit and can't be delinquent or in default. This doesn't make much sense as those who need help the most are those who can't pay their loans back. Those who are doing just fine making their payments are not the ones the government should be targeting. In any case, this bill is at least a step in the right direction and we should try to get Congress to move on this issue.
1) HR 5043 and S 3219 would allow private student loans to become dischargeable in bankruptcy. These bills are fairly straightforward. If you declare bankruptcy, you can include your private student loans along with your credit cards and all other unsecured debt. Write your Member of Congress and ask them to co-sponsor these bills.
2) S 1541 is a more complicated bill, but it would essentially allow some folks to convert their private student loans into federal student loans, which would then be subject to income based repayment and other federal perks. There are some kinks in this bill though. If you've already used up your Stafford loan eligibility via your federal student loans ($18,500 per academic year), then you have to convert your private student loans to federal PLUS loans. This means that you have to have decent credit and can't be delinquent or in default. This doesn't make much sense as those who need help the most are those who can't pay their loans back. Those who are doing just fine making their payments are not the ones the government should be targeting. In any case, this bill is at least a step in the right direction and we should try to get Congress to move on this issue.
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