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Personal bankruptcy may help people with student loans

At this time, student loan debt in the United States has reached $1.08 trillion. Some of those student loan holders are living right here in Cherry Hill, and they are struggling to pay their bills. Unfortunately, while personal bankruptcy can help these individuals if they have outstanding credit card debt and mortgage loans, if cannot help them resolve their student loan debt issues.

The cost of education in this country has skyrocketed over the last couple decades. Those who wish to have the promise of reliable employment have shouldered the burden of those costs by taking out government-funded education loans to pay for their schooling. The problem is that many of these individuals are finding it extremely hard to make their student loan payments on time.

Currently, a new proposal has been brought in front of congress, which would allow student loan holders to refinance those loans to a lower interest rate. If passed into law, this bill (called the Federal Student Loan Refinancing Act) could help former students get back on sound financial feet again, which would also help the United States economy. Indeed, according to one federal statistic, education loan holders are far less likely to take out a car loan or a mortgage.

Personal bankruptcy has helped many people struggling from credit card debt and other forms of credit issues to improve their financial lives exponentially. Even though education loans cannot be helped directly through the bankruptcy process, bankruptcy can help student loan holders by resolving other debt, which will then make it easier for them to focus on paying down their education loans. If this new legislation is subsequently passed by congress, then it will be yet another way by which student debt holders can improve their situations in Cherry Hill.

Source: timesunion.com, Student debt needs relief, No author, Feb. 20, 2014

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