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Congress sits out on growing student loans, credit card debt

Attending college is practically a given for most young adults in Washington, but the cost of earning a higher education is putting many of them in compromised financial positions. Consumer credit card debt is an unavoidable burden for many students and even graduates. For some, this debt poses a seemingly immovable obstacle to bigger goals in life.

Earlier in Sept. 2016, lobbyists went before Congress in an attempt to push them to take action against the growing problem with student debt. Over the past 10 years, student debt has tripled, putting what lobbyists describe as a dampening effect on the economy. Farmers were among the most recent lobbyists to take on Capitol Hill, where they lamented the lack of individuals to take on their businesses. Why? Most young people have such staggering student debt that it is virtually impossible for them to secure a business loan.

In the face of larger-than-ever student loans, many individuals are forced to turn to credit cards simply to make ends meet. A study from 2014 found that households that carry credit card debt are not inherently less responsible with their finances. Rather than splurging on items they are otherwise unable to afford, most people are using credit cards to bridge the gap between their income and higher costs of living. Currently, an average Washington household has about $8,500 in credit card debt.

Most Washington college students and graduates are aware of how difficult it can be to discharge student loans in bankruptcy. However, credit card debt is much more easily handled through the bankruptcy process. While Congress continues to drag its feet on federal legislation that would ease the burden of student loans and other forms of student debt, individuals can still successfully discharge other areas of debt in bankruptcy, creating a more financially stable base on which they can then begin to address their loans.

Source: Market Watch, "This is the big national debt problem Congress won't talk about", Darrell Delamaide, Sept. 17, 2016

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