Bankruptcy lawyers: Student debt is looming economic bomb

[Javaman]

http://www.usatoday.com/money/perfi/college/story/2012-02-08/student-debt-looming-economic-bomb/53010440/1

ROCHESTER, N.Y. – Student debt is looming as a national problem that could have repercussions reminiscent of the mortgage crisis, says a report by the National Association of Consumer Bankruptcy Attorneys.

Total debt from student loans is about $1 trillion, about 14 times more than 15 years ago, and well above the estimated total credit card debt of $798 billion.

The study, released Tuesday and based on a nationwide survey of 860 bankruptcy lawyers, said bankruptcy attorneys nationwide are seeing "what feels too much like what they saw before the foreclosure crisis crashed onto the national scene."

The report calls for a change in bankruptcy laws.

more at link...

[ProdigalJunkMail]

1. can student debt even be discharged

in a bankruptcy? i don't think it can...

sP

[uberblonde]

2. You used to be able to list it in a bankruptcy...

But they "fixed" it in the most recent bankruptcy "reform."

There, all better!

[exboyfil]

3. What will the federal guarantee mean

for future availability for loans if these loans go south. Even the generous payback terms for public workers leaves the government holding a large deficit in these funds. Are these future defaults even considered in the DOE budget for student loans? While you may not discharge them, chances are the collection procedures etc to get the money will lead to massive losses?