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Student Loans and Debt

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Student Loans and Debt

  • Federal student loans are an essential tool in helping students pay for their college educations. The federal government began originating all student loans through its Direct Lending Program in 2010, when a provision to eliminate the bank-based Federal Family Education Loan (FFEL) Program was included in the Obama administration’s health care overhaul. Prior to 2010, a significant portion of loans were made under the FFEL, which was funded through a public/private partnership administered at the state and local level.

    Extreme student loan debt—while still relatively rare—has become an increasingly prominent issue in recent years, and policy makers seem to be listening. There are bills currently pending in Congress to allow student loan debt to be discharged in bankruptcy. In 2011, the Obama administration released a plan to allow millions of additional borrowers to consolidate their federal student loans and to expand income-based repayment for current students. 

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