According to Forbes, the rate of interest on new Stafford student loans is set to double on July 1^st unless Congress is able to act. Unfortunately, there is little agreement on the part of lawmakers on how to solve the problem of rising rates and efforts to thwart this massive increase in student loan costs have thus far been unsuccessful.

If leaders are unable to come to an agreement, this increase in the cost of student borrowing is going to come at an inopportune time and is likely to cause serious hardship for the young. Our Columbia bankruptcy lawyers know that student debt is already crippling young people throughout the United States. An increase in student loan costs is only likely to make this situation much, much worse.

Student Loan Debts are a Major Struggle

Student loan debts are a huge and growing problem in the United States. The cost of college has increased significantly in recent decades and the majority of students graduate thousands of dollars in debt. In fact, according to CNN Money, an estimated 16.2 percent of all Americans have student loans and the average balance on these loans is $24,810. This debt burden is causing those who are lucky enough to be able to pay their loans to delay buying a home, marrying or starting a family because they are so burdened with debt.

Unfortunately, the bad job market is also combining with high debt rates to leave many students unable to even begin tackling their debt burden. According to CNN Money, for example, almost 12 percent of student loans throughout the United States are at least 90 days delinquent. In South Carolina, the number of delinquent borrowers is even higher than the national average as 13.5 percent of student borrowers are delinquent in the state.

Student debt is the only type of debt that has continued to increase during the Great Recession in the United States, as young people hope that going to college will provide them with a way to make it in a tough economy. Unfortunately, the actual outcome has proven very different as college grads are having a hard time finding jobs in their field and an even harder time finding jobs that will allow them to actually begin to aggressively pay down their debts.

Limited Help for Those Struggling with Student Loans

As if it is not bad enough that young people are trapped by student loan debt, things are even worse when you consider the special features of student loans. Perhaps the most problematic feature of all is that student loans are NOT forgivable in bankruptcy under almost any circumstances.

While you can get rid of most other types of debt including credit card debt and personal loan debt, you cannot eliminate student loan debt by filing for bankruptcy except in very limited circumstances. This means that even if you cannot find a job and cannot pay back your loans, there is no way to make the balance go away. The amount you owe can just keep on growing with interests and penalties and the situation can become even worse.

If you find yourself dealing with student loan issues, a bankruptcy lawyer may be able to assist you by helping to resolve other debts so your loan payments become more manageable. Until the law changes – and not in a way that doubles student loan interest rates – the problems with student debts will continue to cause huge ripples throughout the U.S. economy.

If you are considering bankruptcy, contact the Columbia, South Carolina attorneys at Matthews & Megna today at 877-253-7705.