How Big a Problem is Student Loan Debt in the United States?
Posted on Mar 25, 2012
Last month the National Association of Consumer Bankruptcy Attorneys warned that student loans could become the next major debt problem in the United States and have ramifications that are felt as deeply as the home mortgage crisis we’ve experienced over the past few years.
The Association surveyed more than 850 bankruptcy lawyers from around the country and found that:
Four out of five bankruptcy attorneys report seeing clients with greater student loan debt over the past few years.
The majority of bankruptcy attorneys have seen the percentage of their caseloads involving student debt increase significantly over the past few years.
The percentage of parents having trouble with loans they take out to finance their children’s education has also increased.
More concerns were raised earlier this month when the Federal Reserve Bank found that 25% of borrowers carried a past-due student loan balance in the 3rd quarter of last year.
Currently, it is very difficult, if not impossible, to discharge student debt in bankruptcy. Historically, this has not always been the case. However, lobbying pressure led Congress to change bankruptcy laws, and now student loans generally remain the responsibility of the debtor even if the debtor files for bankruptcy. Some bankruptcy lawyers see this as a big problem that will likely grow over the next few years.
Our Minnesota bankruptcy lawyers understand the great burden of student loan debt and encourage those who are overwhelmed with school loans to find out about their legal options.