As student loan costs continually go up, the impact on our economy is trickling into all parts of society.
The biggest controversy is, why bankruptcy can’t discharge my student loan!? Bankruptcy can discharge them, but the standard to prove is extremely difficult. You must be able to prove that paying the loan back would cause you extreme hardship. Extreme hardship is shown by arguing that given your current job and future prospects, there is no way you’d be able to pay the loan back and maintain a minimal life style. The people who have met this standard are far and in between. Typically they are people who received an education and then suffered some sort of mental breakdown or disorder that inhibits them from ever really moving up in the career to make more money. It’s is very difficult, and yet the problem with student loans continues to grow.
Honestly the statistics as to how many people below 40 that have thousands in student loans is going up daily. Student loans are second in household debt, just behind mortgages. This issue is very personal to me. I am much like a lot of lawyers that graduated in 2009, high student loans and low paying jobs. Wages these days just has not grown as fast and costs and so new graduates find themselves making as much as someone without an education!
Now, even worse, bankruptcy trustee’s are trying to sue colleges for the money that parents paid for the kids education. The argument being made is that the money should have been used to pay the parent’s growing debt. This sort of argument has a lot of social implications for the relationship between parents and children. Not to mention it discourages education. In our increasingly global economy, education is still a very important thing!
It’s definitely time that Congress address this problem.
Next post, I will delve deeper into this problem with more particle things people with unmanageable student loans can do.
For more information see: This Article by the New York Times