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More student loan debt cancelled

On Behalf of | Aug 2, 2021 | Bankruptcy

The Biden Administration is apparently attempting to fulfill a campaign promise of reducing college student loan debt for many former students, but the final result appears to be falling short of what many have wanted. Biden received overwhelming support from teachers in Texas who are saddled with student loan debt from when they were earning their degrees and teaching certification. While their income level is not excessive, their debt level is in many cases. Not having to meet those repayment obligations can enhance their buying power significantly even with moderate pay levels. However, the recent moves by the administration may be falling short of the expected mark.

To EO or not to EO

While Congress has been at an impasse on how to handle the situation, the Biden Administration has not. They have been considering the issuance of a presidential executive order that addresses the issue. The problem is that many members of Congress are claiming the president does not have this broad-sweeping power to forgive student loan debt. Absent the issuance of an EO, may mean a potential bankruptcy filing for many Texans in order to get a fresh start on their personal financial situation.

Some relief is already provided

The most recent step taken by the current presidential administration has been to address those who attended an online school or trade school that promised employment upon graduation that was not provided. Many small schools use immediate employment placement as an incentive for students to enroll, which are claims that often are not fulfilled. For these students, this step may help them avoid filing bankruptcy.

It is important to remember that bankruptcy is actually a form of financial legal protection for those who can qualify. Many will be required to file Chapter 13 repayment schedules, but some will still qualify for a Chapter 7 unsecured debt discharge.