Student loans are a growing problem throughout Mississippi and the rest of the United States. While many people sought higher education with the promise of a higher income, some have discovered that their student loans have only saddled them with unmanageable debt.
Making matters worse is the fact that student loan debt is usually not dischargeable in bankruptcy. As we discussed in this past post, it is necessary to prove that student loan debt presents an “undue hardship” in order for it to be forgiven in bankruptcy, and that is typically not an easy burden to meet.
However, as numerous for-profit schools throughout the nation have begun to close after being accused of misleading students on the true worth of their educations, those who took out loans to pay their tuition at these institutions may be eligible for relief.
If students are able to prove to the federal government that they were deceived into enrolling by the schools, or they were unable to complete their degrees because their schools closed, then their loans may be forgiven.
One example includes former Corinthian Colleges students. At one point, California-based Corinthian Colleges Inc. owned more than 100 schools throughout the U.S. and Canada, but it has since filed for bankruptcy after being fined for misleading students on their post-graduation job prospects.
Even the U.S. secretary of education said that the Education Department planned to make it easier for students from Corinthian and similar schools to have their loans forgiven after they took out large debts to pay for their educations and then were left with few job opportunities.
Ultimately, anyone who is struggling to pay back their student loans should talk to a bankruptcy lawyer or another trusted adviser about their options for loan forgiveness, bankruptcy or repayment plans. This is not an issue that you need to face alone.