Many Colorado students are well aware of the rising crisis involving student loan debt. With student loan debt increasing year after year, many individuals are feeling less and less able to pay their student loans, much less their other bills. Fortunately, there may be some options that can help to obtain debt relief.
To begin, the numbers are staggering. One study recently estimated the average student loan debt has risen 30 percent in the past five years. While deferral might be an option for some, this provides only a temporary reprieve from the overburdening debt.
Many others are simply unable to pay off their student loans, with delinquency rates rising to 15.1 percent, which is a low estimate according to the study due to the number of loans in deferral that were not counted.
While many obtained their student loan debt with the thought that they would have a good paying job to repay the loans, this has not been the case for many borrowers. Economic conditions have lead to layoffs and unemployment for many, as well as lower-income jobs than some expected. This has made it hard not only to pay off student loan bills, but other monthly bills as well.
For those who are crippled with high student loan debt, filing for bankruptcy may be an option. To be sure, it is very difficult to obtain a discharge of student loan debt through bankruptcy. An individual must show he or she would suffer a severe hardship, which is a high standard.
It is not impossible, however, to discharge student loans. Perhaps more importantly, even if student loan debt is not discharged, other debt may be discharged through bankruptcy that allows the individual to regain control of his or her financial life and obtain a fresh start.
Source: Time, "Student loan debt crisis: how'd we get here and what happens next?," Martha C. White, Feb. 4, 2013