We have touched on the subject of student loan debt before in our blog (please see our July 19 post entry), noting that it is increasing for many young people in Florida attending school. That bodes badly for graduates who were forced to take on an excessive amount of loans to get through school and have suffered since through a financial recovery in which more jobs are clearly needed.
Most people — though not all — are aware that student debt can be discharged through bankruptcy only rarely; significant changes made to bankruptcy law in recent years under Chapter 7 and Chapter 13 have made it much less common for a student to have an educational loan discharged, notwithstanding dire circumstances. An experienced bankruptcy attorney can speak further to this issue.
One particular population that has been hit especially hard by student loans — their parameters, benefits, deferrals and related concerns — is the American military, an organization in which many thousands of active duty members and reservists serve and attend school. A recently released government report states that a high number of service members are being overwhelmed by a student loan framework that is overly complex and often incorrectly administered.
The result? Benefits are sometimes understated or denied. Loan deferrals are not routinely understood, with high accrued interest being the result. Debt sometimes escalates rapidly and painfully.
Florida is certainly not immune from the problem, with the state having an estimated 95,000 active duty members and reservists.
A recent New York Times article states that the ‘average” 2011 college graduate has about $26,500 in loan. Other sources note that figures for service members are in line with this.
Defense Secretary Leon Panetta acknowledges the centrality of student debt in what he terms “the total debt burden” on military members that also comprises several other elements, including mortgages, credit cards and other obligations.
Student loans are only rarely dischargeable through bankruptcy, but they can certainly be a fundamental catalyst leading to mortgage default, foreclosure and a host of other financial difficulties that make bankruptcy a possibility or realized event for many people.
A knowledgeable bankruptcy attorney can be an invaluable resource to any person with questions or concerns regarding debt problems or other financial issues.
Source: Bloomberg, “Military members face student loan debt problems,” Lolita C. Baldor, Oct. 18, 2012
New York Times, “Student-loan borrowers average $26,500 in debt,” Tamar Lewin, Oct. 18, 2012