Many Americans drowning in student loan debt and many of those considering college listened to President Obama with much anticipation as he tackled the issue of crippling debt burdening most Americans who pursue a college education. President Obama announced that he was working with Congress to create a national program which would ease the burden of student loan debt.
The President said:
To make college more affordable, this bill will finally end the unwarranted taxpayer subsidies that go to banks for student loans. Instead, let's take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. And let's tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years -- and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college.
For years, student loans have been nondischargeable in bankruptcy. Untold scores of individuals who should receive a bankruptcy discharge of their student loans because of the sheer amount of debt compared to their income, have not receive a discharge of their student loans. Because of the way our bankruptcy code is written, debtors can discharge credit card while their student loan debt is relatively permanent and can only be discharged in the most extreme cases. It is a relief that student loan debtors will have an opportunity to have their loans forgiven after a certain time period under proposed changes. However, it is important that we do not disregard the importance of allowing student loan debtors access to bankruptcy's ability to give them a fresh start when they need it the most. I hope that our President will consider how we can change the bankruptcy code to make the discharge of student loans easier.