Having a college degree is usually necessary for securing a good, well-paying job. But since most people in Connecticut have to take on student loans to get their degrees, getting that well-paying job might not even do much to advance a person’s financial situation. Discharging student loans in bankruptcy is also virtually impossible, although getting rid of other debt can reduce some of the burden when it comes to repayment. However, a recently proposed bill could change all of this.
The Student Borrower’s Bankruptcy Relieve Act of 2019 highlights a serious problem with the current bankruptcy system. Unless a person can prove that paying back student loans will create an undue hardship, he or she cannot discharge those loans during bankruptcy. The bill proposes changing the bankruptcy code to make both federal and private student loans dischargeable.
LendEDU analyzed over 1,000 different bankruptcy cases and found that 32% of people who filed had student loan debt. While this only represents a little less than one-third of the cases, student loans made up nearly half of this group’s debt. On average, student loans accounted for 49% of these borrowers’ total debt.
Graduating already tens of thousands of dollars in debt is a difficult situation to be in. Paying back that debt is usually not as easy as many were led to believe, especially since even college grads sometimes have trouble finding well-paying jobs in Connecticut. Although it is still exceptionally difficult to discharge student loans, there is nothing stopping people from discharging their other debts through bankruptcy.