Student Loan Excuse Sends Shockwaves

, Written by Lyle Ahrens, Posted: Thu, May 30 2013 at 5:15 PM, Updated: Thu, May 30 2013 at 5:27 PM

A court ruling that excused a Klamath Falls man from a large portion of his student loan is sending shock waves through the higher education industry...

Klamath Community College President Dr. Roberto Gutierrez says the potential ramifications are huge...

"This is unprecedented.  My concern with this is students may pick it up, saying that this is something normal.  This is not normal - this is an abnormal case."

Mike Hedlund recently won a court ruling that forgave 53 thousand dollars of his 85 thousand dollar student loan debt. 

After completing law school, Hedlund failed his bar exam - and was unable to repay his student loan, despite a good grace effort after filing bankruptcy.

Hedlund now works at the Klamath County Juvenile Department, and declined our request for an interview.

Klamath Falls attorney Phil Studenberg believes the court made the right decision...and thinks that others may follow Hedlund's lead...

"I think that everybody's right now scraping to try to find a way to pay their bills, and I think this may offer them one more opportunity through the bankruptcy laws."

And that concerns Dr. Gutierrez...

"An extreme measure would be that the bubble will burst, as far as loans - and a lot of students that will refuse to pay the loans anymore.  Then we've got a problem, because then we may have lenders that do not want to loan anymore."

And putting that financial aid out of reach could put a college education out of reach for many.

Hedlund earned his law degree from Willamette University.  He'll still be required to pay 32 thousand dollars on his student loans.

The court ruled that Hedlund met 3 important criteria to have his debt excused...

That he can't maintain a 'minimal' standard of living if he repays the loans, that the situation is not likely to change, and that he has made a good faith effort to repay the loans.


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About the Author

Lyle Ahrens

KOTI-TV NBC2 reporter Lyle Ahrens moved from Nebraska to Klamath Falls in the late 1970's.  He instantly fell in love with the mountains, the trees and the rivers, and never once regretted the move.

Lyle's job history is quite colorful.  He’s managed a pizza parlor; he’s been a bartender, and a “kiwifruit grader” at an organic orchard in New Zealand.  A Klamath Falls radio station hired Lyle in the mid 90's as a news writer and commercial producer.  In 2004, Lyle joined the KOTI/KOBI news operation.

Lyle notes with pride that he has a big responsibility presenting the Klamath Basin to a wide and varied audience.  "The on-going water crisis has underscored the fact that the people and the issues in the Klamath Basin are every bit as diverse as the terrain.  Winning and keeping the trust of the viewers, as well as the newsmakers, is something I strive for with each story".

When he's not busy reporting the news, Lyle enjoys astronomy, playing guitar, fixing old radios and listening to anything by Sheryl Crow.

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