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Federal government announces new student loan repayment process

Earlier in April, the Department of Education announced plans to launch a new internet portal that student loan borrowers will use to make their loan repayments easier. When the new payment platform is released, borrowers will be able to use a single portal for payment of their loan debt.

Outstanding student loan debts amount to approximately $1.3 trillion in the United States. Most of the debt is for federal student loans. The Department of Education believes that its new payment platform will make it easier for students to pay back their debt and will provide clear guidelines and incentives, in addition to a user-friendly online environment.

Right now, paying student loans online can be somewhat complicated because students tend to be bounced around to different loan service providers. The system creates a lot of confusion, and some students do not even know which loan provider is theirs. Advocates of a simpler system tend to agree that federal student loan holders should be allowed to go to one federal government website in order to pay their bills.

Any system that makes it easier for students to pay their government student loan bills should help student loan holders to more successfully pay their bills in a timely fashion. Hopefully, this new system will help -- in some small way -- to whittle down the current problems associated with unpaid student debt in the United States, but it is not likely to cure the problem.

California residents suffering from debt problems may want to explore what kind of bankruptcy options are available to them. Although in most cases federal student loan debt cannot be discharged in bankruptcy, California residents might be able to benefit from the bankruptcy process with other kinds of debt -- which could ultimately help them to free up more cash to pay off their student loans.

Source: US News, "New Student Loan Repayment Process May Help End Confusion," Farran Powell, April 27, 2016

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