Student loan debt: Stats, tips and relief

Managing student loan debt is difficult, these tips can help.

Drowning in student loan debt? You are not alone. A recent report by Forbes notes that 44 million borrowers in the United States are struggling to manage $1.3 trillion dollars in student loan debt. The piece goes on to state that the student loan issue in the country has reached "crisis" levels.

There are options to manage this debt. Three examples include:

  • Repayment. In a perfect world, repayment would occur. Perhaps a life event like a bonus at work or even a lottery win would result in an uptick in funds that would cover the payment. Unfortunately, this is just not a realistic option for many who are struggling with student loan debt.
  • Refinance. In some cases, refinancing the loans may help. This often involves a review of the applicant's credit score and debt to income ratios. In some cases, it can require the use of a co-signer that would agree to take on liability for the loan if the applicant fails to make payments.
  • Forgiveness. Some who took out student loans took on a public service profession in exchange for the promise of loan forgiveness after ten years of service. This could include qualifying teaching or law enforcement positions. Unfortunately, as touched on in a previous piece, this forgiveness program may not be as reliable as it was presented. The first participant was eligible for forgiveness in October of 2017. Whether or not forgiveness was granted is yet to be seen.

Another option is present if these do not work. Bankruptcy. It is true, student loan debt itself is often not dischargeable in bankruptcy unless the applicant can establish undue hardship, but there are two points to consider here. First, the fact that student loans are not often eligible for discharge through bankruptcy may change in the near future. In May of 2017, a proposal was introduced that would change federal bankruptcy code to allow the discharge of student loans. The bill is currently under review by the Subcommittee on Regulatory Reform, Commercial and Antitrust Law within the House. If approved as currently written, the law would go into effect as soon as it is enacted.

Second, other debt is dischargeable. Even if the student loan itself is not eligible, the relief that comes from discharging other forms of debt may free up some funds to begin paying off the student loans.

Determining how to handle student loan debt is a very frustrating process. After all, you likely took out these loans with the hopes that they would lead to an education that would open doors to employment that would avoid this mess in the first place. Help is available. Contact an attorney experienced in student loan debt and debt relief options to determine the best way to a fresh financial start so you can focus on your future.