Can Student Loans Now Be Discharged In Bankruptcy?

Shutterstock It’s one of the most intensely-debated student loan questions: Can you discharge your student loans in bankruptcy? The short answer: normally, student loans are not dischargeable. However, that may change. Here’s what you need to know – and why. Student Loans & Bankruptcy: Overview First, a quick overview. As many borrowers struggle to repay ballooning student loan debt, bankruptcy is one option that gets floated. According to Make Lemonade , there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. The average student in the Class of 2016 has $37,172 in student loan debt. Student loans are now the second highest consumer debt category – behind mortgages, but ahead of credit card debt. Unlike other consumer debt such as credit card and mortgage debt, however, student loans traditionally cannot be discharged in bankruptcy. Why? Some can’t explain the rationale […]