With the costs of higher education sky rocketing, many students are faced with accepting student loan packages that include subsidized loans as well as private loans totalling tens of thousands of dollars.  Graduates who are struggling with finding employment post graduation are faced with little repayment options for their private student loans.  Current bankruptcy laws do not allow debtors to discharge student loan debt, except in very limited exceptions.  There are no consumer protections for debtors who are facing financial hardship in repaying private student debt.  Fortunately, a new bill introduced by Illinois Senator Dick Durbin proposes elimination of the bankruptcy provision which makes private student debt nondischargeable.  Whether this will pass despite growing support for the need of student loan reform, is anyone's guess.  I am holding my breath. 

For more information, http://www.bloomberg.com/news/2012-03-20/durbin-urges-private-student-loans-be-discharged-in-bankruptcy.html



Leave a Reply