The cost to attend a college or university isn’t cheap, but it is still very much a part of the American Dream to graduate and launch a successful, well-paying career. But many people find that their student debt follows them for decades, making it seemingly impossible to achieve financial goals such as purchasing a home or car, traveling, or affording their children’s education. As the student debt crisis grows, there is more emphasis on finding solutions to help students receive their education affordably. A proposed solution through the Bankruptcy Relief Act may be the answer we’ve all been waiting for.
The Student Debt Crisis
The student debt collectively sits at a shocking $1.5 trillion, with more than 45 million student loan borrowers. It is estimated that by 2022, that balance will reach a staggering $2 trillion. After decades of disinvestment in public higher education, the burden of paying for college has shifted onto individuals and families. Experts tracking the student debt crisis estimate that most of these loans will never be repaid, as more than 25% of borrowers are already in delinquency or default.
The Student Borrower Bankruptcy Relief Act of 2019
The situation is grim, but legislators may have a solution. The Student Borrower Bankruptcy Relief Act of 2019 is designed for those who cannot afford their student loan payments to cancel the debt in bankruptcy. The Act would allow borrowers who have no realistic path to paying back their student loans to file for bankruptcy. Currently, while other forms of debt are dischargeable in bankruptcy, student debt is not. The Act could be saving grace to help student borrowers get back on their feet; a last resort for student borrowers who find themselves drowning in a sea of debt.
A Mixed Response to the Bill
The bi-partisan Student Borrower Bankruptcy Relief Act has been met with mixed reactions. A number of advocacy groups praised the bill as a step in the right direction towards giving individuals and families the support they need to get out from under crushing debt. Others, however, believe this bill would result in higher costs to taxpayers and a rise in interest rates from private lenders.
The Impact of Filing For Bankruptcy for Student Borrowers
If the Act is signed into law, it is important to understand that filing for bankruptcy is a serious decision that can significantly impact other areas of your life. However, getting bankruptcy relief is often a necessary step for those who have experienced serious illness, job loss, divorce, or who simply need a way to reset and restart their financial future. Filing for bankruptcy for student loan debt offers the possibility of a new beginning for many struggling to make their payments.
An attorney experienced in bankruptcy law can be the key to successfully navigating through and beyond your debt. At Burrow & Associates, our team will review your specific situation, taking into account your income and debt level, and make a recommendation on whether filing for bankruptcy is right for you. To learn more about bankruptcy and financial freedom, call Burrow & Associates at (678) 323-2394. We have offices in the following locations: