The Prevention and Treatment of Student Loan Debt
In conversations with friends in their 20s and early 30s, the problem of student loan debt â€"- how much to accumulate, and how to get out of it once you're in it -- crops up constantly. But it's not just Gen Yers that are facing the problem. With the jobs situation still grim, many older workers are also considering returning to school to freshen up their skills and must consider how to pay for that training.
Besides this anecdotal evidence of the mounting pressures of student debt, there's plenty of statistics on the issue as well. The US has a total outstanding student loan balance of about $730 billion, and that number is growing. The average student now graduates $23,200 in debt. So what can you do get an education without saddling yourself with a crippling monthly payment? Writing for Fast Company, author Anya Kamenetz notes that recent changes in the law offer some hope:
Student loan reforms signed into law March 30 give all borrowers the right to limit their student loan payments to 10% of income. The same law gives more public servants... access to a program that can get their debts forgiven outright.
And a recent Supreme Court ruling suggested a possible end to one of the most punitive student loan rules. Before the recent reforms cut them out of the program, the student loan industry lobbied for changes to the bankruptcy laws in 1998 and 2005 that exempted all student loans--even commercial, non-subsidized loans--from bankruptcy protection, except in the rare, hard-to-prove case of "undue hardship."
The new ruling may reopen the broader case that student borrowers deserve to have bankruptcy as a last resort.Want to learn more about preventing and paying off your student loan debt? Brazen Careerist is offering a live video webcast on the subject Thursday, April 8, at 8pm EST.