Bankruptcies Rise over Student Loans; Lawyers Predict 'Next Debt Bomb'

The Washington Times (Washington, DC), February 8, 2012 | Go to article overview

Bankruptcies Rise over Student Loans; Lawyers Predict 'Next Debt Bomb'


Byline: Ben Wolfgang, THE WASHINGTON TIMES

For an increasing number of young Americans, the post-college journey leads to the office of a bankruptcy lawyer.

A report released Tuesday by the National Association of Consumer Bankruptcy Attorneys (NACBA) shows that more and more graduates and parents are turning to bankruptcy as their final option to deal with mounting debt.

Four out of five bankruptcy lawyers reported a significant increase in clients seeking help with college loan debt, and 40 percent said such cases have increased by at least 25 percent in the past three years, the report says.

With college loan debt now surpassing $1 trillion and outpacing credit card debt for the first time in American history, many are beginning to see grim parallels between student borrowing and the subprime mortgage crisis that ultimately derailed the nation's economy in 2008.

You can take it from those of us who are on the front line of economic distress in America. This could very well be the next debt bomb for the U.S. economy. We can't afford to do nothing about this, NACBA President William E. Brewer told reporters in a conference call.

The average college graduate now owes about $25,000 after school. Nearly 20 percent of parents co-sign loans or borrow additional money for their children, and those parents now owe an average of about $34,000, the report says.

While federal loans offer deferment plans and income-based repayment options, private loans do not. They often come with variable interest rates, making it difficult for graduates to get ahead.

In almost all cases, federal and private student loans can't be discharged through bankruptcy. Graduates can, however, eliminate almost all other debt by declaring bankruptcy, thereby freeing up money to repay the federal government or private lenders.

A bankruptcy judge does have the power to wipe away college debt, but one first must show undue hardship, meaning there is little or no chance that the loan will ever be fully repaid. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Bankruptcies Rise over Student Loans; Lawyers Predict 'Next Debt Bomb'
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.