Student loans have been in the news a lot in the last year or two. Particularly with the poor economy, people have been struggling to repay their loans, and some are drowning in debt. It's especially difficult for people who went to school on private student loans, because those cannot be discharged in bankruptcy. However, many hope that will eventually change.
Even the Consumer Financial Protection Bureau and the Education Department are weighing in on the issue. In a new report, the agencies suggest that perhaps laws should change so that private student loans aren't so inflexible.
A law passed in 2005 helped protect financial institutions even more. As it is now, no education loan can be discharged unless someone can prove "undue hardship," a vague term that is difficult to prove.
Many would say that it's the consumers who need protecting. A lot of the time, it can be confusing for students as to how to finance their education. If they don't pay close enough attention or ask the right questions, they can find themselves in serious financial trouble.
One woman, who amassed about $140,000 in debt, in mostly private loans, says that she probably didn't do as much research as she should have when she took out her loans. But, she says, there weren't many resources to help out at the time. Now, she's been struggling to find a job and moved back in with her parents.
Her story is a common one. That's why people are campaigning for some laws to be changed.
Source: Baltimore Sun, "Report: Let private student loans be discharged in bankruptcy," Eileen Ambrose, July 29, 2012
? Our firm handles similar situations to the one discussed in this post. If you would like to learn more about our practice, please visit our bankruptcy page.
joe torre west virginia university michele bachmann jessica biel tim howard west virginia rob roy
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