Support for Bankruptcy Eligible Student Debt

Support for Bankruptcy Eligible Student Debt "The issue of student loan debt continues to dominate the bankruptcy discussion. On the heels of an outpouring of support for a recent push for loan forgiveness, the movement to harness and begin eliminating the debt has been expanded to include the notion that those in perilous financial straits should be able to include student loans in their bankruptcy filings. According to current federal law, these debts cannot be included in a bankruptcy petition. The argument for allowing student loan debts to be discharged in bankruptcy court centers on the notion that a low employment rate and high loan debt for recent college graduates only serve to increase the federal debt in the long run. Bigger ProblemsDue to the fact that current salary trends indicate that entry-level wages do not provide sufficient income for recent graduates to make their loan payments in full or in part, many are forced to apply for forbearance or deferments. While in deferment, interest on student loans continues to accrue, adding to the loan's principal balance and increasing the debt incurred. Eventually, debtors are unable to repay their debt and have few options for relieving financial pressure.The primary argument in favor of allowing student loan debt to be included in bankruptcies is that it would ultimately bring about the much-needed accountability for the federal government and private lending sector, both of which are currently seen as contributing to a system with few checks and balances to ensure that colleges are adequately preparing students for success after education. The fear of losing money through bankruptcy would make it more difficult for students to obtain private loans, forcing them to finance a greater portion of their education out of pocket. In turn, universities would be required to maintain reasonable tuition rates in order to continue to recruit students. In addition, the government, confronted with a financial loss, will increase its pressure on schools to ensure that students are adequately prepared for employment that will allow them to become financially independent and repay their student loan debt.Student loan debt continues to rise, despite the fact that only time will tell if Congress ultimately adopts reforms to student aid. The current amount is $1 trillion, and rising tuition costs continue to make it impossible for the overwhelming majority of students to finance their educations solely with their own resources. Increasingly, it appears that a ""out"" is the only way to break the problematic debt cycle caused by rising student debt.
" - https://www.affordablecebu.com/