Welcome back to our discussion on the student debt crisis. While thousands of college students throughout Wisconsin are celebrating their hard-earned degrees this month, many are also wrought with worry over how they will pay back their student loans.

In a first attempt at addressing the issue, Democrats in the U.S. Senate have proposed a bill that would allow Americans with student loan debt from public and private institutions to refinance their loans at lower interest rates. 

However, it is expected that Republicans in Congress will not be supportive of the way the bill proposes making up for the lost revenue: raising income taxes for Americans earning more than a million dollars per year.

Wisconsin State Senator Dave Hansen and State Representative Cory Mason are also tackling the student debt crisis at the state level. Their “Higher Ed, Lower Debt Bill” is the first state-based piece of legislation that attempts to ease the burden of student loan debt by allowing loans to be refinanced and payments to be deducted from state income taxes.

While it is great the federal and state lawmakers are starting to acknowledge student loan debt as a true financial crisis, there are many Americans who already feel defeated by student loan debt and any relief provided by the legislation that has been proposed could come too late

Most people assume that student loan debt is not dischargeable in bankruptcy, but that is not always the case. Talk with an experienced bankruptcy law attorney in your area to find out the exceptions and whether your situation qualifies.

Source: Progressive.org, “Debt Casts a Shadow on Graduation,” May 16, 2014