Business feedback 2

Need the feed back response to 1 and 2. Below is the question that is being answer in 1 and 2

Federal student loans may not be discharged in bankruptcy court except for the most extreme hardships. Is there any reason why a federal court should treat a student loan differently than any other debt?

1.

Federally provided student loans are considered non-exempt debt, meaning that they cannot be discharged by a bankruptcy court except in the direst of circumstances and under which the client can claim undue hardship, which is nearly impossible unless they suffer from a disability.  There are many who feel that student loans should through the bankruptcy process be eligible for discharge, however they are not at this point in time.  As such, with students loans treated as non-dischargeable debt under current law, no matter how broke a person may be, they cannot get out of paying their student loans (Webley, 2012).

Since the 1970s when many doctors and lawyers saw the benefit of discharging student loans after they achieved their degrees, the government has cracked down on student loan law. Prior to the 1970s, student loans could be discharged with other types of debt, but in 1976 a law passed that changed the student loan regulations putting it along with other types of non-dischargeable debt like back child support payments and back taxes.  In 2005, this law was extended to also include private loans.  Overall, student loans are more difficult to get rid of than nearly any other debt in bankruptcy court, but this concept has become more problematic in recent years as the job market has experienced a long-term downturn.  Today, college students have hit their highest levels of debt, surpassing even that of credit card debt in the U.S.  With roughly 1 trillion in student debt and little opportunity for getting back on track for re-payment, many students have been challenged with financial matters (Webley, 2012).  It appears a sad fact that if students were to have paid for their schooling with credit cards they would have a better chance of getting out of debt through bankruptcy than those who used government loans to get their education. Lizet A.

Bibliography

Webley, K. (2012, Feb 9). Why Can't You Discharge Student loans in Bankruptcy? Time, pp. http://business.time.com/2012/02/09/why-cant-you-discharge-student-loans-in-bankruptcy/.

FEEDBACK:

2.

This is a fascinating subject. Personally, I think that student loan debt should be treated the same as other debt accrued by a person. If I accumulate more debt than I can afford to pay, it should be discharged along with the rest of my debt. However, that makes me wonder; why exactly are we entitled to bankruptcy? I realize it's better than being sent to prison for not being able to cover our expenses, but it is irresponsible none the less. Student loans are backed by the government, if they are discharged, who is left holding the bag so to speak? I truly believe that student loan debit is the next "mortgage crisis."  This is such a multi-fold issue. Where do we even start? The soaring costs of education make student loans necessary, and the poor economy makes people unable to pay back their debt, and the government can't afford afford to pay every student's loan. Unfortunately, if a massive amount of student loan debt is discharged it will only further hurt the economy. Maybe student loan debt should not be completely discharged, maybe it should be suspended until the debtor is more financially stable and only interest collected during the interim. 

FEEDBACK: