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      CHAPTER 5: STUDENT LOANS


Ever go through your bills and figure it may just be easier to file bankruptcy? I think this thought has crossed the minds of many. However, when it comes to student loans, they are not allowed to be included in bankruptcy. For many, they must take out student loans if they want to get an education.  Especially for fields like Medical, Dental and Law.  However, without knowing what options you have to pay the loans back when you get out you may end up in a major bind like so many graduates.
It’s great that the government has recognized the need for student debt relief by offering several different repayment plans to fit the needs of many.  Unfortunately most graduates are not in the right plan and still don’t know their options.  Many times this leads to Delinquency or Default.  Some will never be able to afford their loan debt and could use even more help in relieving the debt burden.  Much more change is needed to resolve these issues.  Why are you able to buy a car at 3% but have a 6.8% or even higher on many student loans?  Is it fair that students are paying much higher interest rates than banks?  Now there are people who are 65 that still have student loan debt.  For some, bankruptcy is the only way to get back on track and alleviate the burden of debt.  These are things the government should be looking at to help resolve the massive issue of student loan debt (which is now at $1.3 Trillion dollars).

Student loan debt should have a “Chapter” in bankruptcy. Of course like all bankruptcies there would be limitations in place. It should be much more stringent than other bankruptcy options and should only be used if it is proven the person can never live a sustainable life while trying to pay back the debt.  Although there are some rare cases of bankruptcy on student loans its almost impossible to prove and the one clear case that did win took over 10 years.  Most people do not have that kind of time and truly suffer with the burden of their debt.

Until we become a country that provides free education for all there should be worse case options for those who simply cant pay the loans back.  For everyone else, lets hope they have been paying attention to their options so they qualify for reduced payments which could possibly provide forgiveness in the future.

Daisy Lane
Published Blogger