Are you facing a crushing student loan debt? You’re not alone. Did you know United States citizens face more than 1 trillion dollars in outstanding student debt? That’s a lot of loans, and the 2005 law that prevented borrowers from discharging their student loans in bankruptcy didn’t help resolve the issue. Generally student loans are not dischargeable in bankruptcy. Court rulings make discharging student loans extremely difficult. So if you are in school and facing the potential of high student loans, here are some suggestions to follow:
- Borrow as little of student loans as possible, only borrow what you need for tuition, nothing else.
- Do not borrow student loans to cover living expense.
- Minimize your expenses as much as possible.
- For everything else, use any other credit that may be available to you including credit cards.
Student loan reform seems to be in the news all the time these days, with a federal agency going so far as to petition Congress to change the current rules surrounding student debt and bankruptcy. Whether or not this move is successful remains to be seen. Until then following the above steps should hedge your chances just in case things do not work out the way you had them planed. Finally, you may be surprised to learn that filing bankruptcy does not affect your ability to get most new federal loans and grants, with the exception of PLUS loans. So even if you are in the middle of your education, Bankruptcy option is available to you.