Attorney at Debt Advisors Law Offices
Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure
Student loans were meant to help people access higher education, but for millions of Americans, they’ve become a long-term burden. With tuition rising faster than wages and limited options for relief, student loan debt is one of the most pressing financial issues in the United States today.
This article explores why student loans are so difficult to manage, the limits of forgiveness programs, and how repayment strategies can help borrowers break the cycle of debt.
Over the past forty years, tuition costs at public and private universities have nearly tripled. At the same time, average income levels have not kept pace. This gap means that students are borrowing more, but earning less relative to the debt they carry after graduation.
Borrowers who start but do not finish a degree often face the greatest struggles. They still have debt to repay but without the higher wages that typically come with a degree. Similarly, those with advanced degrees can carry six-figure loan balances, making repayment a decades-long process.
According to the Federal Reserve, U.S. student loan debt reached more than $1.7 trillion in 2023, making it the second-largest type of consumer debt after mortgages.
This combination of high balances, limited income growth, and long repayment timelines has created what many experts call a national student debt crisis.
Programs like Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness were created to provide relief for certain borrowers. PSLF, for example, promises forgiveness after 120 qualifying payments for borrowers working in eligible public service jobs.
While these programs sound promising, the reality has been far more complicated. Since its creation in 2007, PSLF has denied a majority of applications due to complex rules and paperwork errors. Even when borrowers follow the process carefully, results are not guaranteed.
Private student loans present an even greater challenge. Forgiveness options for loans issued by banks or private lenders are extremely limited. Borrowers with private loans typically must rely on refinancing or hardship programs rather than forgiveness.
The Public Service Loan Forgiveness Program has historically denied over 90% of applicants, largely due to paperwork errors and employer eligibility issues.
Recent political discussions about large-scale federal student loan forgiveness have attracted attention, but many of these proposals face legal challenges or stall before implementation.
For many borrowers, student loans do not exist in isolation. Credit card debt, personal loans, and medical bills often accompany student debt, creating a cycle that feels impossible to escape.
When borrowers cannot keep up with payments, they may choose deferment or forbearance. While these options provide temporary relief, they often extend repayment timelines and increase the total amount owed. Over time, interest continues to grow, leading to larger balances.
The long-term consequences go beyond finances. Studies show that high student loan debt can delay homeownership, reduce retirement savings, and increase overall financial stress for young adults and their families.
Deferment and forbearance are commonly used tools for borrowers in financial difficulty. While they pause payments, they are not long-term solutions.
Deferment may temporarily stop interest from accruing on certain federal loans, but most loans continue to grow during this period. Forbearance always allows interest to build, often leaving borrowers with a much larger balance after the pause ends.
If a borrower fails to resume payments after deferment or forbearance, the loan may enter default. At that point, the lender can pursue legal action, garnish wages, and even hold co-signers responsible for repayment.
If at any point during deferment a payment is missed, the student loan may enter default, leading to court judgments, wage garnishment, and serious credit damage.
Bankruptcy is often misunderstood when it comes to student debt. In most cases, student loans cannot be fully discharged. Courts require borrowers to prove “undue hardship,” a very difficult standard to meet.
However, bankruptcy can still provide indirect relief. Eliminating other debts such as credit cards or medical bills can free up income that borrowers can then use to pay student loans. Younger generations increasingly cite overwhelming student loan debt as one of the reasons they seek bankruptcy protection.
Under federal law, most student loans cannot be discharged in bankruptcy unless the borrower proves “undue hardship,” a standard that courts interpret very narrowly.
For borrowers in Wisconsin, bankruptcy laws can be especially complex when student loans are involved. Speaking with a Milwaukee bankruptcy lawyer can provide insight into how other debts may be reduced, freeing up resources to manage educational loans.
While bankruptcy may not erase student loans, there are other approaches to consider. Income-driven repayment plans can reduce monthly payments based on a borrower’s income and family size, although they often extend repayment periods.
Refinancing may lower interest rates, but borrowers who refinance federal loans into private ones lose access to government protections such as income-driven repayment and PSLF. Debt consolidation can simplify multiple loans into one monthly payment, but borrowers should review terms carefully.
Credit counseling is another option, especially for those with a mix of student loan and consumer debt. Counselors can help create a repayment plan that balances obligations without increasing financial strain.
| Option | Applies To | Key Benefit | Key Limitation |
| Income-Driven Repayment | Federal Loans | Affordable monthly payments | Extends repayment period |
| Public Service Loan Forgiveness | Federal Loans (qualifying jobs) | Forgiveness after 10 years | High denial rate |
| Deferment | Federal/Private | Temporary pause on payments | Interest often accrues |
| Forbearance | Federal/Private | Short-term relief | Higher total debt |
| Refinancing | Private/Federal (converted) | Lower interest rates possible | Loss of federal protections |
Only in rare cases under the “undue hardship” standard. Bankruptcy may still help by clearing other debts to make repayment easier.
Deferment can pause payments and sometimes interest. Forbearance pauses payments but interest always builds, often making loans more expensive.
Programs like PSLF require consistent payments while working in qualifying jobs. Many applications are denied due to strict rules.
Default can lead to wage garnishment, tax refund seizure, lawsuits, and serious damage to your credit record.
No. Private loans do not qualify for federal forgiveness programs, though refinancing or hardship options may be available.
Not always. It may lower interest, but federal protections and forgiveness eligibility are lost when refinancing into private loans.
Student loans have become a serious financial challenge for millions of Americans. Rising tuition costs, limited forgiveness programs, and the risks of deferment or default all contribute to a cycle of debt that is hard to break.
While bankruptcy rarely eliminates student loans directly, it can ease the pressure of other debts and create breathing room for repayment.
At Debt Advisors Law Offices, we help individuals understand their full range of debt relief options and make informed decisions about their financial future. If student loans and other debts are weighing you down, reach out today for a free consultation and discover practical strategies to move forward.
Learn about bankruptcy protections, types of bankruptcy, how to get started, what to expect, and who to trust. Filing bankruptcy is the ONLY way to completely eliminate debt. If bankruptcy is right for you, it offers powerful protections that cannot be achieved through alternative solutions such as hardship relief, loans, or debt settlement.
