Cashman: Student debt bankruptcy relief urged
HARD LESSON: Attorney General Maura Healey, on Herald Radio yesterday, said not being able to forgive student loan debt ‘makes no sense to me.’
Attorney General Maura Healey is proposing a change to bankruptcy laws that many college graduates would see as a Christmas miracle — allowing student debt to be wiped away if you file for bankruptcy.
Student loans currently can’t be cleared if you file for Chapter 7, and the attorney general told me on Boston Herald Radio yesterday that she would like that law changed on the national level and that she would advocate for the change.
Why is it that the courts won’t forgive the debt mistakes of a 20-something just starting out in life, but will erase the burden of grownups who should know better than to buy a house they cannot afford?
“It makes no sense to me,” Healey said. “You can get relief from bankruptcy for credit card debt, home mortgage debt, car debt, from all kinds of debt, except student loan debt. And that is debt that you carry around with you for the rest of your life.”
It seems like a reasonable issue to debate. On the downside, about $1 trillion of debt in this country comes from student loans, and this proposed change to bankruptcy laws could put a huge strain on banks if we make it too easy to file for bankruptcy upon completion of school.
On the other hand, some relief is needed: We have teenagers making huge financial decisions for themselves during their senior year of high school that can impact them for decades to come.
Too many young kids are idealistic when applying for college and will do anything to go to the best school, never truly understanding the debt they are saddling themselves with later.
The average cost for the 2015/2016 school year at private colleges is $32,405 a year and can go as high as $65,480 if you attend an exclusive school, such as Sarah Lawrence. So, it should come as no surprise that 69 percent of college graduates leave school with debt.
According to the Institute for College Access and Success, the average debt last year was $28,950. Just 10 years ago, students were graduating with $18,550 in loans.
Healey’s office has been working hard to provide support for graduates struggling to make payments and making sure they are not being taken advantage of with bad loans. Healey said this type of law change is “about economic security for students and families.”
Article from:- http://www.bostonherald.com