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Study urges ability for some student loans to be discharged

As more and more people in Ohio have gone back to school in search of a career -- or a second or third career -- a lot of people have incurred large amounts of student loan debt. It is not unheard of for law school graduates, for example, to have more than $100,000 in outstanding student loan debt when they enter the workforce -- only to find that jobs in their area of expertise are hard to come by.

Adding to people's financial woes is the fact that, for the most part, student loans are not discharged when filing for bankruptcy. This means that people who are in dire need of debt relief often won't be able to find it by filing for bankruptcy -- at least not when it comes to their student loan debt, which often is the biggest liability on their ledger.

There have been calls to change this, however. Recently, the Center for American Progress unveiled a plan that would create a category of financial aid called Qualified Student Loans. These loans would have repayment terms tied to the income of graduates; the more someone makes, the more they pay back. The schools would have to meet minimum guidelines for job placement and employment; if they fall short, the loans might be dischargable in Chapter 7 bankruptcy.

The report has several hurdles before it might gain any traction in Washington. However, it does shine a light on the financial plight many people are facing. Even if student loan discharges are not common, bankruptcy might still be a viable option for people with financial issues. An Ohio bankruptcy attorney could be a good resource for people in this situation.

Source: The Huffington Post, "Bankruptcy Should Be An Option For Some Student Loans: Report," Tyler Kingkade, Aug. 20, 2013

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