According to the Institute for College Access & Success, 69 percent of public and nonprofit college graduates have student loan debt, the average amount of which totals in excess of $28,000 per student. Combined, U.S. college graduates have accrued massive amounts of student loan debt to the tune of $1.2 trillion dollars.
For a troubling percentage of these individuals, the financial burdens associated with repaying student loans are exacerbated by stagnant wages and mounting interest rates. Over time, attempting to afford one’s monthly student loan payment in addition to a car or home loan can lead to an over-reliance on credit cards.
Federal statistics show that more than 25 percent of student loan borrowers are “behind on their monthly payments or in default” and almost 50 percent of all borrowers indicate they’ve been forced to adjust their spending to account for the repayment of student loan debt. There’s no doubt that the financial burdens associated with student debt can be significant. Factor in an unexpected job loss or medical emergency and it’s almost a given that something has to give.
Student loan debt is not dischargeable in bankruptcy. However, other unsecured debts like those related to credit cards and medical bills are. For individuals who are struggling to repay or who have defaulted on their student loans due to large amounts of credit card or medical debt, it’s important to contact a bankruptcy attorney who can help an individual review his or her options.
In addition to discharging credit card and medical debt, a bankruptcy attorney can also provide assistance on ways to minimize existing debts including those related to student loans.
Source: The Huffington Post, “The Easiest Way To Reduce Your Student Loan Payment,” Shahien Nasiripour, April 2, 2016