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Bankruptcy May Be Your Option

President backing debt relief for student loan borrowers

There is currently over $1 trillion in outstanding federal student loans. The average tuition to gain a bachelor’s degree has tripled over the past 30 years, and the current average graduate now leaves school with almost $30,000 in debt.

Economists say that student loan debt is an investment in the student’s future  because those with college degrees tend to earn more than those without them. However, others say that student loan debt is a drag on the economy, keeping those with high student loan payments from making major purchases, such as houses and cars.

In 2010, a law that capped borrower’s monthly payments at 10 percent of their income helped ease the student loan burden for many. But the president doesn’t think that legislation went far enough. Now, President Barack Obama is backing a bill to provide some debt relief to those with high student loans. The bill would allow refinancing of both federal and private student loan debt at lower interest rates. If adopted as law, it would cost the government nearly $60 billion over 10 years.

Certainly this kind of debt relief would be helpful to former students who are facing financial challenges and struggling to make ends meet. Although student loans are generally not dischargeable in bankruptcy, Chapter 7 or Chapter 13 may also be an option for those with other types of debts on top of student loans, such as credit card debt.

Especially as the landscape changes and new laws are introduced regarding debt relief options, Oklahoma residents who are faced with overwhelming debt may be well served to talk with an attorney to understand their options.

Source: Dallas News, “Obama plans steps to ease student debt,” Jackie Calmes, June 7, 2014

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