Students in New Jersey and across the nation know how pricey their “priceless” educational pursuits often turn out to be. Student loan debt is now topping U.S. credit card debt, and 81 percent of members of the National Association of Consumer Bankruptcy Attorneys say that the number of prospective clients they see with student loan debt has increased “somewhat” to “significantly” in the past few years.
What does this mean for New Jersey residents who are saddled with student loan debt? Most of these people are unable to meet the federal hardship criteria that allows people to discharge student loans through bankruptcy proceedings, however, student loan debt can often lead to hardship when it comes to paying other bills. If debt beyond student loans becomes unmanageable, bankruptcy may be an option.
While a student loan related debt crisis may not be on par with the home mortgage crisis, tuition continues to increase significantly, meaning the long-term effects of student loan debt may be grave as people who are seeking higher education may be less likely to take out a loan. The fact that, in the past three years alone, there has been a 50 percent spike in student loan debt shows how much of a factor this debt is becoming.
Student debt can feel overwhelming and often become a burden for those who are juggling other bills on top of it. When debt outside of student loans becomes too much to handle, it may be helpful to consider filing for bankruptcy.
Source: The New American, “Bankruptcy Attorneys Predict a Student Loan ‘Debt Bomb’,” Brian Koenig, March 13, 2012