For a moment, we would like you to consider the life of a young adult who just graduated from college. He or she is going out into a world where the job market, though much better than the depths it plunged into in recent years, is not exactly forgiving. They have accrued an immense amount of debt as a result of their college education, and they are just trying to find a job to start their career.
They have to get their living situation figured out. They may need a new car. They may have credit card debt on top of this that makes their financial picture a bit more convoluted than it may seem. And even once they land that job, they aren't exactly earning the type of money that allows them to wipe away all of their debt in one fell swoop.
Now, given that this is the scenario that many young adults face in today's world, don't you think that a bankruptcy filing on their behalf should at least address their student loan debt?
That's the problem with the way current student loan debt is structured. There is practically no way for it to be discharged through the bankruptcy process. Only in extreme circumstances can this form of debt be addressed and potentially discharged.
It's a question that seemingly has lawmakers flummoxed, because the issue of student debt during bankruptcy has not been addressed officially. No new rules have been put in place to try to alleviate some of the financial burden on young adults who are just trying to get by. We can only hope that as this discussion continues to gain steam and some new ideas come out from lawmakers that it will be appropriately addressed.
Source: Wall Street Journal, "Should Bankruptcy Address Student Debt?," May 7, 2015