The issue of student loan debt has been a hot topic for quite some time. As the debt total for student loans inches closer to $1 trillion nationally, government officials and others are pushing for reform. Once dischargeable in bankruptcy, these debts have been restricted from the process and left to be handled with limited options since 2005.
Time For Change
President Obama has been fighting to have student loan debt relief options expanded for the last few years. As political parties battle about the best way to bring relief, people from both sides are beginning to come together to agree on the pressing nature of these debts. Lawmakers and political officials are becoming increasingly concerned with the high rate of defaults on these loans and the financial future of loan holders.
One Senate Democrat, Richard Durbin, is calling for rule changes that would allow for private student loans to be, once again, eligible for bankruptcy protection. Durbin says, “It is clear that too many students have been steered into loans that they will not be able to repay and that they will never be able to escape.” Advocates of Durbin’s movement are pushing for increased legislation on the issue, a point of contention among some policymakers. However, lawmakers must act quickly as a five year reduction in the interest rate on federal loans is set to expire this July. If the lower rate is allowed to rise, many are anticipating the problems with default will only get worse over the next several years.
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