how are pre-existing student loans handled under the new Obama laws?

Posted on 2014-08-21
Medium Priority
Last Modified: 2014-08-26
Hello and Good Afternoon Everyone,

          I am wondering how pre-existing student loans are handled under the new Obama laws.  The reason I ask is because I have heard that after a certain number of years of owing student loans, they are automatically forgiven under the new Obama laws.   I have also heard that the default status, if exist, must be removed first before being qualified for this benefit under the new Obama regulations.  At any rate, if someone could provide some insights into this matter, it will be greatly appreciated.  

            Thank you so much.

Question by:GMartin
LVL 16

Accepted Solution

dhsindy Sparrow earned 2000 total points
ID: 40280826
There are no new Obama laws on student loans as far as I know. Perhaps your are referring to Senator Elizabeth Warren's bill on changing student loan rates which President Obama supported. The bill was blocked in the House of Representatives on June 12, 2014, I believe. These loans are NOT forgiven in bankruptcy cases. Note: Ms Warren is an expert in bankruptcy law and seems to be leading the fight to help students with outstanding loans.

This is bound to be one of top issues in up coming elections especially for young voters. The debt owed to or guaranteed by the US government recently exceeded $1 Trillion USD. So, government is reluctant to relieve these debts. Since, the debts are protected from bankruptcy, I personally feel the interest rates should be less more in the range of short term mortgages.

If you are young and have this debt you should be sure and register and cast a vote.

Author Closing Comment

ID: 40286915

        Thank you for sharing your personal thoughts in response to my question.  After reviewing the information presented, I am inclined to agree with your points.  If I should hear about any new information regarding this subject, I will post it for anybody who may have pre-existing student loan concerns.


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