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New administration looking at possible student loan debt relief
Many individuals in Tennessee and elsewhere attend college to obtain a degree so that they can build a career in their chosen fields. However, the cost of college continues to rise each year, and many students are left with overwhelming debt in the form of student loans upon graduation. The current presidential administration is looking into ways to allow indebted college students the chance at discharging their loans in bankruptcy, thereby providing much-needed debt relief for those struggling to make ends meet.
Currently, student loans cannot be discharged through bankruptcy unless it can be proven that paying back the loan would create an undue hardship for the debtor. Unfortunately, the process of proving undue hardship is very challenging, and many of those with student loans never even try to discharge their debt. Purportedly, the reason for this is that the government aggressively blocks such efforts because the federal government backs many student loans, and if the debtor can’t pay, taxpayers will bear the burden.
In what many call a surprise announcement, the U.S. Department of Education is looking into the matter. Apparently, the department is inviting feedback from the public on the issue and is collecting information to determine how best to modify the current hardship exemption in order to make it easier for students to discharge their loans through bankruptcy. This decision seems to be in response to President Trump’s campaign promise to help all students burdened by overwhelming debt.
How exactly the administration plans to address this issue is yet to be seen. No details were provided in the report, but many find it encouraging that the administration would take such a stance. Although it is challenging to discharge student loans through bankruptcy, it is not impossible. Even if a student in Tennessee cannot discharge his or her college loans, it may still be possible to free up capital through the bankruptcy process, which would allow the student to apply the extra money toward his or her student loans. An experienced bankruptcy attorney would be able to assess a particular client’s situation and offer advice on all options for debt relief.
Source: abovethelaw.com, “Bankruptcy Options For Student Debt Could Possibly Change Under The Trump Administration“, Staci Zaretsky, Feb. 21, 2018
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608 Mabry Hood Road, Suite 202
Knoxville, Tennessee 37932
William E. Maddox, Jr. LLC, Attorney at Law is located in Knoxville, TN and serves clients in and around Knoxville, Oak Ridge, Louisville and Anderson County.
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