For the last several years, the student loan debt debate has been one of much attention in Congress. With the default rates higher than ever and the overall debt burden reaching near $1 trillion dollars, the time has come for something to be done about the financial future of loan holders.
Since important changes were made to bankruptcy laws in 2005, student loan debts have been near impossible to have discharged in bankruptcy. Prior to the changes, private student loan debts may have been eligible for discharge in bankruptcy. Some government officials are now fighting to have this eligibility reinstated to help alleviate the potential financial crisis that looms in the near future.
Senator Dick Durbin has been one of the main advocates for pushing to have student loan debt eligibility returned to the bankruptcy courts. While some oppose this move, Congress is now at least willing to consider the issue. Last week a Senate judiciary subcommittee heard testimony about student debt and bankruptcy, in efforts to bring more attention to the subject. Currently, no ruling has been made but an active petition is circulating to have the Student Loan Debt Forgiveness Act of 2012, which could provide alternative sources of relief for loan holders if implemented.