Every year, almost one in three Americans who file Chapter 7 bankruptcies are burdened by student loans. However, this kind of debt is not usually dischargeable in Virginia or any other state. When filers have these loans, they usually account for about half of their total financial obligations. These were two of the discoveries made by researchers who studied 1,083 Chapter 7 cases from the financial online marketplace LendEDU.
The cost of attending college has more than doubled in the last 35 years, and the total amount of educational debt in the United States has now grown to a worrying $1.5 trillion. That is more than Americans owe on car loans or credit cards. According to a leading student loan comparison website, graduating students in 2018 entered the workforce weighed down by an average debt of $29,800. Analysts say that student loans this large are bad for the economy as they make it far more difficult for young people to become homeowners or start families.
Many observers believe that this growing affordability crisis could leave an entire generation unable to attain the kind of lifestyle enjoyed by their parents and grandparents. The figures suggest that members of the baby boom generation could pay for four years of college by working for 306 hours at the federal minimum wage. Millennials would have to work for 4,459 hours to pay for college today.
An attorney with debt relief experience could explain to a borrower how student debt may sometimes be dischargeable in a Chapter 7 bankruptcy. Educational debt could be included in a bankruptcy if making monthly payments puts a minimum standard of living out of reach and if the borrower’s situation is unlikely to improve in the future.