Student loans have increased about 50 percent since 2007, according to Equifax. In 2009, alone, students took out $55 billion in loans. Debt and unemployment are at all-time highs. Students are graduating with bigger bills and without the money to pay them.

Many students are taking out loans to attend graduate school immediately following undergraduate programs because of the poor economy.

To this point, most of this money has come from private banks and lenders, used as middlemen by the government, who guarantees the loans. Billions of dollars have been spent by Washington to pay interest on these loans, but maybe not for much longer.

In his monumental healthcare bill, Obama also included legislation to restructure student loans. The changes make it so that the government can give loans directly to students, rather than using private lenders. The result should be cut overall costs while providing more money to needy students.

That's the plan, anyway.

The bill also lowered required monthly payments to 10 percent of the debtor's income, versus 15, and forgives loan balances after 20 years, versus 25.

Under federal bankruptcy law, student loans are not dischargeable, in either Chapter 7 or Chapter 13, unless they create an undue hardship for the debtor. This must be proven by the former student filing for bankruptcy.

Student loans can, however, be reorganized as part of a Chapter 13 bankruptcy filing.

Private banks, such as Sallie Mae, have predicted mass layoffs and general disorder if the president's bill goes into effect. On the other side, proponents have applauded Obama's decision to cut off what is seen as unnecessary spending and bank padding.

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