Law Office of Allan E. Dunaway, PLC

Student loans typically not eligible for refinancing

If you have a mortgage that was financed at a higher rate of interest, should interest rates fall as they have over the last few years, you have the option of refinancing that debt to newer, lower interest rates. If you have a 30-year mortgage, a few percentage points reduction can save you thousands of dollars over repayment period of the loan.

But those with student loans don't have that luxury. Student loan interest rates are set by Congress. And only Congress can change them, which seems unlikely given Congress's inability to do much of anything. The fact that student loans generate $34 billion in income for the federal government means Congress is even less likely to want to reduce that number. For individuals overwhelmed with debt, including student loans, bankruptcy may provide their only option.

While student loans are not easily discharged in a bankruptcy, it is possible if your are able to show extreme hardship. This is a difficult standard to meet, but sadly, in today's weak employment market, more debtors may qualify.

Even if your personal and financial condition are not sufficiently dire to qualify for a student loan discharge, a Chapter 13 bankruptcy could allow you to eliminate much of your other debt, like credit card bills and other loans, and this might free up enough of your income that you could begin to make tangible progress in repaying your student loans.

Because financial circumstances are unique, it is important to speak with a bankruptcy attorney, who can review your debts and income, and suggest the best strategy for dealing with your situation.

Source: Time, "Why Can't People with Student Loans Refinance at Better Rates?" Dan Kadlec, Feb. 20, 2013

No Comments

Leave a comment
Comment Information
Contact the Firm

Get Sound Advice In A Free Consultation

For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Kentucky Office

Indiana Office

714 Lyndon Lane
Suite 4
Louisville, KY 40222

Phone: 502-785-1005
Fax: 502-412-2258
Map & Directions

530 East Court Avenue
Jeffersonville, IN 47130

Phone: 502-785-1005
Fax: 502-412-2258
Map & Directions