Recent statistics about the incredible amount of student debt in the United States can be shocking. According to the Brookings Institute, there is approximately $1.5 trillion dollars of student debt in this country and as of now, relatively little you can do to alleviate it.
If you are suffering under a seemingly unbearable amount of student debt you might not know what to do. There are relatively few options available to you, but that might change soon.
What could happen in the future?
There might be a chance that you could have your student debt forgiven after declaring bankruptcy, soon. The Department of Education is considering alterations to current policies that make it difficult for discharging student debt.
The Department of Education may expand the definition of undue hardship, which is a way to discharge student debt in bankruptcy. This could potentially make the process easier for more people, thus alleviating the stress of debt on students.
Lawmakers believe that the current student debt crisis could have a significant negative impact on the nation’s economy.
What can you do about it for now?
As mentioned before, currently one of the only ways to have your student debt forgiven is through declaring Chapter 7 or Chapter 13 bankruptcy and proving to a court that your debt has put “undue hardship” on your life and your family’s lives.
There is no set rule-of-thumb that courts use to determine “undue hardship” but there are a few common considerations. One is evidence that you will not be able to maintain a minimal standard of living if forced to repay your loans. If you can prove that your standard of living will be poor, and extend even after your loans are repaid, this is another common standard of “undue hardship.”
If you can prove these circumstances to a court, your loan could be fully or partially discharged. In some cases, you might still be required to repay your loan, but it could be adjusted at a lower interest rate.
The United States’ current situation of student debt has reached relatively alarming heights and lawmakers are beginning to consider action. For now, however, student debt remains a difficult obstacle for many people in today’s society.