Student loan debt remains a top concern for millions of Americans - and the
$1.2 trillion in student loan debt we carry as a nation makes it clear this isn’t
a problem that will fix itself. In an effort to chip away at this incredible
debt load and address a serious financial burden affecting the next generation
of working Americans, lawmakers, economists, and experts from across the
country have been working to find effective solutions. According to some,
new legislation that could make student loan debt dischargeable in bankruptcy may be the key.
The latest piece of legislation aiming to provide relief to the millions
burdened by outstanding student loans - the Fairness for Struggling Students
Act of 2015 - was recently introduced by 12 U.S. senators, including California’s
Barbara Boxer. It seeks to change current U.S. bankruptcy laws to restore
the option of bankruptcy relief for private student loans.
Here are a few additional points about the proposed bill:
- Before 2005, individuals with private student loans were able to discharge
loan debt during bankruptcy. The bankruptcy code was revised to make private
student loan debt non-dischargeable except in extreme circumstances.
- Private lenders account for only 10 - 15 percent of all student loan debt
in the U.S., so the bill’s impact would not be as dramatic as if
it allowed all student loans to be discharged in bankruptcy.
Similar legislation has been proposed for individuals who carry government-issued
or guaranteed student loan debt. You can read more about that proposed
bill on a
According to lawmakers and experts backing the bill, more students are
carrying significant amounts of student loan debt. While the average debt
load for students graduating with B.A.’s is currently $29,000, it’s
not uncommon to see six-figure, mortgage sized debt totals.
Large debt loads prevent many recent grads from making the step to the
next major life-decision, like purchasing a home or starting a family.
Family members who co-signed student loans can feel the strain as well.
In many cases, borrowers can become easily discouraged by the belief that
they have little chance of digging themselves out of debt.
At Wadhwani & Shanfeld, we have met and worked with many individuals
and families struggling with student loan debt. If you have questions
about student loans and your options for debt relief, request a
FREE consultation today.
We serve clients throughout Los Angeles and Southern California from
multiple office locations