When Higher Education Becomes More Burden than Blessing
It seemed like a good idea at the time. A struggling economy, a bleak job market – why not go back to school and get a higher degree?
Many who took this gamble find themselves burdened with large student loans while the job market continues to struggle. As a result, student loan defaults are at their highest rate in over ten years, according to USA Today.
Canceling Educational Loans
Bankruptcy offers relief from many forms of debt including car loans, credit cards and even gambling. Conspicuously absent from this list: educational loans. Lawmakers support this decision, citing concerns that discharging educational loans will raise tuition rates.
Although not widely available, educational loans can be discharged when a debtor claims undue hardship. Undue hardship examines the amount of debt and the debtor’s ability to repay the loan. Since the claims are made directly against the creditors, who have access to strong defense teams, they are successful less than 50 percent of the time.
Additional factors that lead to cancellation of educational loans include death, disability and attending an improperly certified school. Some loans can also be terminated if you enter a full time teaching, a public service profession or the military.
Potential Relief may be a Mirage
Unfortunately, because current reform being discussed in Congress focuses on consolidation programs for upcoming graduates, it may not help graduates already underwater. As a result, frustration continues to grow.
This frustration is manifest in the current “Occupy” Movement present throughout the country. One component of this movement pushes for zero interest on student debt and forgiveness of all existing debt. Education Secretary Arne Duncan responded to these goals by calling for higher level education officials to reduce student debt.
Although federal relief for those struggling to manage educational loans will not likely be available any time soon, there are ways to relieve the stress associated with repayment. Contact an experienced Nashville debt relief attorney to discuss the options available for your situation.