The economy is extremely tough right now. It is not only in the backs of everyone’s minds, but it is also the #1 political topic, and for good reason. It seems like every single family has had to deal with financial hardship in some way, whether income was reduced, a job was lost, work hours were increased without pay increase, or a loved one came upon hard times.
There is one group who the economy has hit much harder than others though: Graduating students.
A national bankruptcy lawyers’ group has warned that many new graduates are beginning to find that jobs are not even close to as easy to find as they were expecting, and when that is added to the rapidly increasing amount of student loan debt required to graduate, students could be facing an economic crisis that rivals even the mortgage burst of recent years.
According to the National Association of Consumer Bankruptcy Attorneys, of all the over 850 bankruptcy lawyers surveyed, 4 out of 5 of them said that new potential clients with student debt have become “somewhat” or “significantly” more common in just the past 3-4 years.
1/4 of all respondents said that the number of potential clients with student loan debt has increased by over 50%, while 1/3 said that it had increased by 25-50%.
The unfortunate reality is that student loan debt is rarely ever forgiven in bankruptcy filings, and student loan providers are generally less flexible in offering repayment assistance than regular credit card companies.
Many lawmakers are looking into ways to change this legislation that would be beneficial to lenders and borrowers, as well as taxpayers.