It seems as though more people than ever are taking on student loan debt. When it comes time to repay those loans, many people aren’t being offered programs that could make it easier for them to make payments. Many people may have ended up having to file bankruptcy needlessly because they didn’t realize they had alternatives.
Of course, many in New Jersey are aware that students are only allowed to discharge student loans under very specific circumstances. However, when coupled with other debts, many people are unable to pay all of their bills due to the high payments of some student loans. It is estimated that a record 600,000 people defaulted on their student loans in the 12 month period that ended in June of this year. All total, there are nearly 2.1 million people that are in default of their student loans.
This has the government concerned because programs were created in order to help alleviate the burden of student loan payments, yet participants in the Direct Loan program were not adequately informed about their options. Records indicate that at most there are almost 1.6 million people taking advantage of debt-relief repayment plans. The government would like to see that number increase. Unfortunately, it appears that student loan holders are not sufficiently getting the word out about these programs.
With the economy just beginning to show signs of recovery and many people around the country and in New Jersey filing for bankruptcy for a variety of reasons, having to file due to student loan debt shouldn’t be a concern. Even though the debt may not be discharged, the remainder of a person’s debt can be discharged –freeing up income to make student loan payments. For some people, this may not have been necessary had they known what their options were for repaying their loans at a more manageable level.
Source: Huffington Post, Education Department Lets Borrowers Default On Student Loans, Ignoring Helpful Alternatives, Shahien Nasiripour, Sept. 11, 2013