College Loan Consolidation, Federal Loan Consolidation, Private Loan Consolidation, Student Loan Consolidation

America's Top Student Loan Provider




New Legislation Introduced to Forgive Private Student Loans upon Bankruptcy


June 08, 2007
Washington,

DC—This week, legislation was introduced by Illinois Senator Dick Durbin (D) that would allow private student loans to be forgiven upon bankruptcy. Currently, neither private nor federal student loans will be discharged for a borrower who files for bankruptcy, with the rare exception of extreme hardship.

Private student loans, also known as alternative loans, offer students an option other than federal student loans, which are backed by the federal government. Private loans are borrowed through private institutions but are not administered by the Federal Family Education Loan (FFEL) Program.

While private loans can be beneficial to students who find that federal loans cannot cover all of the costs involved with obtaining an education, they can also be a financial burden to repay. This is because private loans usually have very high interest rates and fees. According to Higher Education Washington, Inc.'s NewsLine, some private loans have been reported to have variable interest rates of 15% or higher. Also, unlike federal student loans, private loans usually have higher loan limits, and there are no public regulations governing the terms and costs associated with private student loans, as there are with federal loans.

"Private student loans are incredible money-makers for loan companies, and students end up saddled with sky-high interest rates and mountains of debt," said Senator Durbin. He continued, "I don't think many 17- or 18-year-old students realize the long-term impact of their loan decisions. Some of these private student loan repayment schedules-with double-digit interest rates-can follow a student borrower from graduation to the grave."

According to a press release on the senator's website, the sector of private student loans is the fastest growing and most profitable in the student loan industry. The press release also said that in 2006, private loans accounted for around 20% of total student loan borrowing, compared to only 5% 10 years ago.

Prior to a change in 2005, the bankruptcy code allowed borrowers to discharge private student loans but not federal student loans. However, the 2005 modification prohibits private student loans from being forgiven upon bankruptcy. This provision protects the private lending industry's investments.

Senator Durbin's legislation would reverse the 2005 change to the bankruptcy law, ensuring that private student loans would again be discharged upon filing for bankruptcy. According to the senator's website, this would place private student loan lenders in the same position as all other private creditors.

EdFed, America's top student loan consolidator, offers borrowers considering bankruptcy an option. Student loan consolidation helps students and graduates manage their student loan debt and possibly improve their credit.

"Consolidating with EdFed is a great alternative to filing for bankruptcy," said EdFed loan specialist Jennifer Munson. "Borrowers who are in a money pinch have the option to select one of our graduated repayment plans, as well as extended repayment terms of up to 30 years. These options will allow borrowers to lower their monthly payments, therefore saving them a substantial amount of money each month."

"Another benefit to consolidating with EdFed is that we offer both federal and private student loan consolidations. This allows us to accommodate all of the educational loans that borrowers have."

To receive more information on private and federal student loan consolidations with EdFed, borrowers may call 800-821-5659 or visit www.edfed.com.

For more information, please contact Brooke Heath at 626-234-9423, bheath@edfed.com.

About EdFed:

As a leader in the student loan industry, EdFed is dedicated to helping students and graduates realize all of their educational goals and meet their student loan and consolidation needs.


How EdFed Helped others!
The bottom line is EdFed saved me thousands of dollars on my federal student loans. I had already consolidated most of my federal loans through another company, and I thought I was done. I didn't realize I needed to do another consolidation until my Loan Specialist at EdFed explained my interest rates and their borrower benefits. I knew I couldn't go wrong by choosing EdFed. Their payment incentives will save me over $30,000 on my federal student loans. Thank you EdFed.
- Mark W.  San Antonio, TX
* Your Name: * Your E-mail Address:

We respect your privacy.
* Your Friend's name: * Your Friend's E-mail address:
Include a Message:
+ Privacy Policy
call:
(800) 821-5659

Student Loan Consolidation Info - How to Choose the Right Loan Company

This column is sponsored by Granted, America's top job search engine. The Career Resources column is presented by Granted, America's leading job search engine dedicated to getting people jobs.

Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.

read more
CONSOLIDATION NEWS
Schools Will No Longer Receive Paper FAFSA Forms
(September 20, 2007)

news desk
CALCULATORS
Stafford Loan Payment Calculator
PLUS Loan Payment Calculator
Loan Consolidation Payment Calculator
Articles
Calculators
FAQs
Glossary of Terms
Loan Comparison Chart
Scholarship Search
You may choose to change your repayment plan after your loan has been consolidated. There is also no prepayment penalty, so you may pay more than your scheduled payment at any time.
US School Directory
Comprehensive List of Schools at which EdFed Assists Students.
EdFed is a FFELP lender with lender identification number 834241.
© Copyright 2018 EdFed. All Rights Reserved.

Home · About Us · Contact Us · NewsSitemap
Career Advice · Tell a Friend · Privacy Policy · Resume Service
Resume Distribution Service · Post Resume · Job Search Course
EDFED NEWSLETTERS
Sign up for the latest news on student loans.
Email Address:
+ Most Recent Newsletter
+ Newsletter Archives