For decades, the middle class has bought into a promise that is a basic premise of American life. Studying hard and staying in school is supposed to pay off. Even if individuals and families have to borrow tens of thousands to do it, there is supposed to be a good job on the other end of the rainbow.
The Great Recession and a continuing lack of enough good jobs have shaken many Americans’ faith in promises that were once taken for granted. In the San Antonio area and across the country, more and more people are struggling with student loan debt. Many are even questioning their decision to go to college in the first place.
Many people have also heard that student loans are debts that are usually not extinguishable in bankruptcy. Though that is generally true, there are two important qualifiers to that statement.
First of all, keep in mind that there is a recognized exception to the general rule that student loan debt is usually not dischargeable in bankruptcy. That exception is for “undue hardship.” Though it is not easy to qualify for this, it is possible in some cases.
Even if the bankruptcy judge doesn’t grant the undue hardship exception, there are other ways in which a bankruptcy filing can help someone deal with student loan debt. By discharging other debts in bankruptcy, it can become more feasible to keep up with student loan payments.
Still, disillusionment with the burden of debt from student loans that didn’t yield hoped-for jobs is very real. A recent survey conducted by Wells Fargo asked young people between 22 and 32 about student loan debt. More than 40 percent of them said the debt was overwhelming.
Source: “Student Loan Problems: One Third of Millennials Regret Going to College,” Forbes, Halah Touryalai, May 22, 2013