According to a bankruptcy judge in New Jersey, it is time to re-evaluate the way current law deals with student loan debt. In a recent article, Judge Michael B. Kaplan called burgeoning student loan debt a looming crisis that touches every generation of Americans. Although the Bankruptcy Code largely lives up to its purpose of providing debtors with a fresh start, student loans are the notable exception to this rule.
One local nonprofit is dedicated to paying off the student loans of combat veterans and easing the financial burden that these families face. Eli Williamson founded Leave No Veteran Behind because the average military veteran carries about $56,000 in student debt. Since 2009, this foundation has paid the outstanding student loan debt of 10 veterans.
According to the organization American Student Assistance, some 20 million individuals are entering college every single year. Of that group, 60% are borrowing to finance some or all of the cost of higher education. The average amount of loan debt per student? Across all age groups, that number sits at $24, 301. It’s not surprising that one of the leading questions surrounding bankruptcy is whether or not student loan debt can be discharged.
A judge has ruled that a Maryland woman will not have to pay back her law school debt due to her diagnosis of Asperger’s Syndrome.
U. S. Bankruptcy Judge Robert Gordon of the District of Maryland on May 17th ruled that Carol Todd met the often difficult burden of showing that she is incapable of repaying a debt of almost $340,000 in law school loans.
Although student debt has surpassed credit card debt as the largest single source of debt carried by Americans well into adulthood, student debt usually cannot be discharged under a traditional Chapter 7 or Chapter 13 bankruptcy.