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The Problem With Student Loans

Student Loans In The News

Headlines related to student loans are appearing on news stories more often in recent weeks, at least partially due to the upcoming presidential election. Offering a free college education for everyone isn’t necessarily the answer. Nevertheless, student loans are a problem left unsolved. Income levels have not risen significantly, yet universities and four year private colleges continue to increase tuition costs and associated fees. Students who have credits from a trade school or community college may find it difficult to transfer credits to a university. As classes are taken and re-taken, the overall cost of education increases. In addition, higher education offers degree programs that look good on paper but do not support a career wage that can repay student loans. When parents and students sign the loan agreements, they may not be fully aware of what they’re getting in to.

Debt Forgiveness Programs

Debt forgiveness programs can be helpful to eliminate or significantly reduce debts associated with student loans. The Federal Government offers debt forgiveness options for careers in public service; veterinarian, lawyer, doctor, nurse, etc. If you’re a teacher, there are even more loan forgiveness programs to be aware of. Another situation that may entitle one to the forgiveness of student loans involves disability. Basically, if you can’t work due to a disability, then you may also be eligible for what is called a “permanent disability discharge” of student loan debt. If your loans were from a bank or other private lender your access to debt forgiveness programs may be more limited than those offered by the Federal Government. Furthermore, a recent graduate who is not able to generate a healthy income or a student that didn’t graduate may have fewer options available.

Defer Student Loans

After graduation, or after one stops going to school, there is rarely enough income to keep up with the debt load. Whether student loans are federal or private, deferment or refinancing plans are a temporary, short-term solution. Interest rates continue to accumulate more debt as the length of the loan extends. Unless there is a significant improvement making loan payments, a personal could be stuck paying even more to their student loan debt. If payments are not maintained, the student loan goes into default status. At this point, the financial problem is likely to impact parents or other co-signers to the loan as well.

Student Loan Default Can Lead To:

  • Decline of Credit Scores
  • Wage Garnishments
  • Tax Refunds Withheld
  • Federal Benefits Withheld


Discharge Student Debt

Debt from student loans is a major stress and weight on our economy. Other than maintaining payments or debt forgiveness programs, there is one more option to consider; filing bankruptcy. The debt carried by a student loan is treated differently than other unsecured debts.  In some cases, it may be possible to discharge student loan debt through bankruptcy. Filing Chapter 13 bankruptcy can “restructure all debt” to allow for consolidation. When in a desperate financial situation, bankruptcy should be investigated and

Bankruptcy Can Eliminate Student Loans

Remember, bankruptcy is the “solution” to overwhelming debt, not the “problem.”  If student loan debt is your problem, then bankruptcy may be your solution.  Student debt is becoming one of the top reasons younger generations decide to file bankruptcy. If you’re interested in what bankruptcy can do, the next step is to get sound legal advice from a Bankruptcy Attorney. Debt Advisors offers a free initial case evaluation to gauge your situation. If you have an opportunity for some free legal advice, why not take it? Start Right Here.

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