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Debt relief for student loans could be easier in the near future

Some of the biggest debts currently carried by people in Washington are also some of the most difficult to get rid of. The intense burden created by student loans is familiar to the vast majority of students who attend college, regardless of whether they actually graduated. Now, as one father might achieve debt relief for his $200,000 in student loans, hope could be on the horizon for many.

National student loan debt currently stands at $1.3 trillion with no indication of slowing down. With the rising cost of attending college, judges and policy makers alike are beginning to question the institutionalized difficulty that most people face when trying to discharge these debts. Indeed, most people who file for bankruptcy are unsuccessful at discharging their student loans, a decision that one 65-year-old father refused to accept. When he filed for bankruptcy in 2011 a bankruptcy judge refused to allow his student loans to be discharged, and he took his case to an appeals court.

The father first took out loans in 2001 and continued to do so until 2007. He received the loans through the Parent PLUS system, which allows parents to take out loans in addition to their children in order to help pay for school. These loans might have played an integral role in providing his three children with a college education, as he became unemployed in 2002.

Following an appearance before three appeals judges, the father and debt collection agency were able to negotiate a settlement that, if approved, would allow him to successfully discharge the loans. This settlement is currently awaiting approval from the Bankruptcy Court. If approved, the decision would have implications far beyond the discharge of his debt and could have implications for students seeking debt relief, in Washington and across the country.

Source: Market Watch, "This dad is a step closer to wiping out $200,000 in student loans", Jillian Berman, April 16, 2016

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