Why does student loan debt warrant that kind of attention from the bankruptcy court?
The first are the federal student loans that are eligible forfederal loan consolidation. If a student has federal Stafford loans, PLUS loans, Perkinsloans, HEAL loans, Federal FFELP and Direct loans, he has lending agreementsthat are eligible under Department of Education guidelines to school loan consolidation expenses into one payment. When a college student firstleaves school, federal student loans are due in ten years.
A. Debtor protection from the Bankruptcy court and the power of the Bankruptcy court to relieve the debtor from obligations he or she legitimately incurred derives from powers granted to the Bankruptcy court by the United States federal government. It just so happens that the United States federal government also guarantees student loans.
