Why isnt bankruptcy allowed for student loans?

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Madaline Hill asked a question: Why isnt bankruptcy allowed for student loans?
Asked By: Madaline Hill
Date created: Sun, Jul 11, 2021 5:18 PM
Date updated: Sat, Sep 10, 2022 10:04 PM

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Video answer: Opinion: bankruptcy is the solution to the student loan crisis

Opinion: bankruptcy is the solution to the student loan crisis

Top best answers to the question «Why isnt bankruptcy allowed for student loans»

  • Student loans are exempt from bankruptcy because many politicians feared that young people would borrow substantial sums to pay for college and then discharge their student loans in bankruptcy right after graduation.

Video answer: Things to consider before trying to discharge student loan debt…

Things to consider before trying to discharge student loan debt…

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According to a 2013 report titled “ No Way Out: Student Loans, Financial Distress, and the Need for Policy Reform,” the special treatment and bankruptcy protections afforded to student loans is the result of panic and exaggerated stories about wealthy doctors and lawyers filing for bankruptcy to discharge student loans at a relatively young age and basically leaving the government or a bank holding the bag. However, the data has shown that these fears were completely unfounded.

The new chairman of the Federal Reserve questioned why struggling borrowers can’t discharge their student loans in bankruptcy. “Alone among all kinds of debt, we don’t allow student loan debt to be...

Discharging federal student loans in bankruptcy is similarly tightly proscribed, but the pain of those restrictions is heavily tranquilised by schemes that help borrowers who fall into trouble...

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