Should Student Loans be Dischargeable?
In 2016, the average college student graduated with $37,172 in loan debt. That’s almost 6 percent more than the previous year. This is not really a great way to start out, especially if you’re in an entry level job and unable to afford rent or any of the other basic necessities of so-called “adult-life.” It leaves many students struggling to make ends meet while making their monthly student loan payments.
You might think that filing bankruptcy could relieve the financial burden of student loans. However, federal student loans are not currently considered dischargeable debt except in cases of undue hardship. And currently, very few graduates are eligible for loan forgiveness programs.
Student Loan Debt Hurts Everyone
You don’t need to have student debt to be affected by what is being called the student debt crisis. This crisis has a trickling effect throughout the economy. The housing market is affected because potential renters or buyers cannot afford to rent or pay mortgages, let alone in many cases qualify for a mortgage, because of their student loan debt. Each person who is burdened by overwhelming student loan debt is a consumer who cannot contribute to the economy because of lack of cash flow.
Is Making Student Loans Dischargeable the Answer?
The answer to the student debt problem could be addressed by allowing more loans to be dischargeable, in addition to allowing some of this debt to be forgiven. Others propose controlling tuition and fees, which have increased at a rate far outpacing inflation. Currently, income-based repayment plans are available for student loan borrowers who qualify.
Bankruptcy May Be An Option
Although student loan debt is not dischargeable, some students take out loans or open up credit cards so that they can pay their monthly bills. If you’re struggling with multiple debts, you might want to speak with a bankruptcy lawyer to explore your options. The Law Office of Larry Karandreas offers a free initial consultation to help you decide whether bankruptcy offers a solution in your situation.