People often ask me why student loans can’t be included in bankruptcy, when it is painfully obvious that the debtor is unable to pay the loan, either due to health issues, unemployment, or low salary. The only reason is: the United States Congress.
Many people do not realize that student loans were fully dischargeable in bankruptcy through the 1980s. Ironically, no one was suffering from unpayable student loans in the 1980s for the precise reason that leaders in banking and higher education knew better than to charge too much, because loans were not guaranteed by the government. College was cheaper back then for a reason, now the sky is the limit.
To this day, people can even put old tax debts into a bankruptcy, but not student loans. This is ironic considering the fact that to owe taxes, a person must once have had an income from which the tax debt was derived, while a person with student loans may never have had the income they thought they’d achieve at the time the loan was made, typically when they were young and inexperienced.
Since the United States Congress is responsible for making student loans impossible to discharge in bankruptcy, the only way to fix the problem is to contact one’s senators and U.S. representative and demand that the law be changed again to put student loans BACK into bankruptcy.
Ironically, the student loan crisis has gotten so bad that now there is widespread support for universal forgiveness of all student loans. Perhaps if Congress had refrained from removing student loans from bankruptcy, such a drastic step would not now be on the table.
It’s easy to e-mail one’s senator or congress person. Just google “current [name of U.S. state] senators” and their websites will appear. To contact one’s U.S. representative, just go to the U.S. House of Representatives website and input one’s zip code. Just as with the senators, one may e-mail U.S. representatives directly through their websites.