One of the great financial burdens today is student debt. Gigantic tuition hikes over the last few decades have saddled college graduates with insurmountable debt that can’t be relieved by bankruptcy.
In 1978, the bankruptcy laws were overhauled and the ability to discharge studennt loans was taken away. The reasoning was tuitions were much lower and there was a robust job market and most graduates had no problems getting jobs.
Fast forward 30 year and tuitions have skyrocketed and graduates have no avenue to climb out from under the debt even if they are gainfully employed.
The ability to declare bankruptcy as a last resort has long been a vital element of American society yet that is denied to young people who need to borrow for their education.
Back when the law was changed, student loan defaults were not an issue. Now due to the high cost of college, defaults are common and a change in the law is needed.
Last year U.S. News and World Report released study saying total student debt now tops $1.3 trillion. It’s the single fastest-growing segment of U.S. consumer debt, increasing by 170 percent over the past ten years. 44 million Americans currently have student debt, and 8 million of those have already defaulted on their loans.
We define that as a crisis.