For the past week, the White House has been raising excitement over a new plan that is supposed to assist millions of Americans who are overburdened by student loan debt.
In our first post, we discussed how the plan focuses on qualifying more Americans with student loan debt for an income-based repayment plan that places a limit on the monthly repayment amount and forgives any remaining debt after 20 years of payments.
However, the policy analyst pointed out that many people who have left college are already eligible for a similar income-based repayment plan, yet most borrowers have not enrolled because of the extra effort and knowledge it requires to sign up for the plan and stay qualified.
Additionally, the plan will likely not do anything to help those still in college, and it probably won’t address the soaring cost of higher education in the United States.
What this means is that although the White House has raised a lot of hype around the plan over the past week, student loan debt will likely continue to rise and overburden Americans.
On a positive note, the policy analyst said that the Obama Administration’s plan will likely open the door for lawmakers to address the issue and take action that results in benefits to student loan borrowers. However, we have no idea when and if that action will be taken.
Until then, millions of Americans will still be struggling to make their student loan payments each month in addition to their other bills.
Although student loans are usually not dischargeable through bankruptcy, this isn’t always the case.
Additionally, individuals who are overburdened by student loan debt also often face other types of debt that may be dischargeable through bankruptcy.
For these reasons, it’s worth talking with an experienced bankruptcy attorney if you are overburdened by student loan payments and other forms of debt.
Source: The Hill, “White House student loan proposal won’t help many,” Clare McCann, June 16, 2014