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Student loans: onerous exaction and core concern of many debtors

As a former Florida student, you might be quite typical of many other similarly situated people in that you now owe one or more creditors principal and interest tied to student loans that you received during your school years.

For many people, the payment obligations on school-related obligations are challenging, if not outright onerous. In fact, many Americans state that, along with mortgage or rental obligations, student loan duties are at the top of the list of hard-to-manage payment imperatives they face each month.

For some people, continued payment becomes flatly impossible. That is unsurprising, given news stories that commonly feature of ex-students who owe staggering amounts of money -- six-figure balances are not unusual -- for degrees and training certificates.

Many readers have likely heard that, unlike other types of so-called "unsecured debt" (such as credit card debt and medical bills), student debt is less easily forgiven in a bankruptcy filing.

Although that is generally true, it is not always the case that such debt cannot be discharged through bankruptcy and, notwithstanding, an insuperable amount of school-related debt continues to be a fundamental reason why many people declare bankruptcy. Many filers subsequently find that contacting an experienced debt relief attorney and filing for bankruptcy was a well-considered step toward reclaiming financial stability in their lives.

Many commentators on debt openly acknowledge the central role often played by student loans, and the need to do something about the standard repayment process.

Five organizations, including the National Association of Student Financial Aid Administrators, have conducted joint research and recently released a proposal for revamping the customary student loan repayment scheme.

Their findings are interesting, as well as a bit provocative. We will outline the contours of the proposal in our next blog post, believing that many of our readers might find them interesting.

Source: Bloomberg Businessweek, "A proposal to radically simplify student loan payments, "Karen Weise, March 24, 2014

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