Should Student Loan Debt be Easier
Should Student Loan Debt Be Easier To Discharge In Bankruptcy?
Students should be able to file bankruptcy for their loans. Many students will not find a job after graduating college. Often times they may not even find a job with their major. Even if they do find a job right away it does not mean they will start with high paying position. With not finding a job or starting at the bottom some students will face undue hardships. Student loan debt should be easier to discharge in bankruptcy because of economic hardship of students.
Due to economic hardship some students find it hard to pay back their loans. According to a survey conducted by American Student Assistant, thirty five percent of respondents found it difficult to buy daily necessities because of their student loans (Pro 3). In order to get your debt discharged you have to prove in court that paying back your loan will cause an undue hardship. This can be hard, but not impossible. Courts us what is called a Brunner Test.
Courts look at several factors, if you would be able to maintain a normal standard of living, how long will your financial difficulties last, and if you have been making an effort to make your payments. It is up to you to prove that paying back your student loans will cause hardship. Students have to show proof of all your debts. They have to prove that paying rent, buying groceries, paying for medications, and bills would be hard to do while they are paying off their student loans. Some economic hardships that could force you to file bankruptcy are: losing a job, having to quit a job to take care of a family member, getting injured so much as you have to take time off of work. There are many reasons on can become victim to economic hardship, and filing for bankruptcy may be a student’s only option.
There are some students that may find it difficult to find a job as soon as they graduate college. Some students are leaving college without effectively knowing how to do job searches online. (I Don’t). Despite many efforts many new graduates struggle to find a job that is the right fit for their skills. I personally have experienced this myself although I had computer skills it was difficult to find a job with my skills. Most places will hire someone with experience, even though you have a degree. An internship can put you ahead of the competition in the work force. If you have a degree or certificate, and work experience it can make you more employable.
With that being said, some students may not even find a job with their major. Often times for some reason or another, a job in their field is not available, so they have to take what they can get in the meantime. They can end up with a job that is only minimum wage or not much higher. They may only be able to find part time work. With the economy the way it most companies will not hire you full time. Not having a good paying job or only working maybe twenty hours a week can cause a student to have economic hardship. With everything online now you have to compete with thousands of people for the same job.
Although, eventually they will get the job they went to college for; but by that time they can be further in debt, and find it nearly impossible to keep up on their student loan payments.
Although making it easier for students to discharge their student loans, some feel it could encourage them to borrow more (Con 3). Therefore tuition rates can increase. According to the Federal Reserve Bank of New York found that a credit expansion will raise tuition paid by all students (Con 3). Students may qualify for financial aid, although if there are rules and guidelines such as: you have to maintain a C average, if you drop out of a class or college early and you already received your financial aid you have to pay that back. That means that will be money you have to owe back to the government, and may not be dischargeable.
Without bankruptcy students may never get ahead. Students can end up paying on their student loans for many years, and never get ahead, thus, making it hard to maintain a normal standard of living. Some students have rent to pay, car payments, and other bills. On top of all the other responsibilities, and things that can happen such as: losing a job, getting less hours at work, repairs to a vehicle. It could put them in a position where they have to figure out where their priorities lie. And many have to put off paying student loans due to other economic issues. For these reasons it should be easier for a student to discharge their student loans in bankruptcy.
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