The student loan debt debate has been circling the floor of Congress for some time, as many are pushing to find a solution to the near $1 trillion problem. Since the change in bankruptcy laws in 2005, the rate of student loan debt default has continued to grow exponentially and many graduates are ending up in insolvency over their education debts. It is hoped that, in 2013, something can be done to help put graduates back on the path to debt repayment without causing undue financial hardship.
The Need For Change
U.S. Senator Richard Durbin is the most recent addition to the Senate Health, Education, Labor and Pensions Committee. Part of their mission is to reintroduce two pieces of legislation aimed at helping revamp the student loan process. The Fairness for Struggling Students Act of 2013 and the Know Before You Owe Act of 2013, are two very important bills that could change the way student loan lending and collection practices play out in the future.
The Consumer Financial Protection Bureau reports that the average debt load carried across the graduation ceremony floor of some 37 million borrowers is near $25,000. With an estimated $150 billion in outstanding and delinquency status, lenders aren’t getting paid and borrowers are barely getting by as is. So what is the solution? Although there is some opposition against reinstating private student loan debts into eligibility for bankruptcy, one point is agreed upon: education regarding borrowing options for college hopefuls and increased fairness in lending practices is at least one place to start.