Millions of hard-working Americans — not just college students — have a stake in the country’s $1.2 trillion student loan debt crisis. Economists and policymakers are increasingly concerned about our nation’s staggering student loan debt and its crippling effect on generations of borrowers whose loans are holding them back from purchasing a home or car, opening a business, starting a family or saving for their retirement.
I am one of many bankruptcy attorneys in our state on the front lines of the student loan debt crisis. I serve families and individuals who are in financial distress and facing a constant struggle under the weight of unmanageable student loan debt. I see hard-working people who lost jobs in the recession and are in the midst of retraining for new careers. Others are ready for retirement but still working to make ends meet.
Most people I help are in the same boat: saddled with massive student loan debts they took out for themselves or co-signed for their children’s education.
Americans have a vested interest in the ongoing policy debates over student loan debt. We need this debate to yield real action, and for policymakers to not lose sight of one fundamental solution for those in the worst shape: restoring bankruptcy relief for private student loans.
Just like credit cards, private student loans are market-generated unsecured debts. But unlike credit card debt, private student loan debt cannot be discharged in bankruptcy. Riskier, high-cost private loans do not deserve the protection from bankruptcy given to more affordable federal loans, which come with built-in consumer safeguards and relief program options for when borrowers get into trouble.
Sen. Richard Durbin of Illinois and Rep. Steve Cohen of Tennessee have introduced legislation (S 114/HR 532) to once again make private student loans dischargeable in bankruptcy, as they were before 2005. Americans drowning in private student loan debt need our state’s senators and representatives to co-sponsor this legislation and push for its passage.
Doing so not only gives our economy a much-needed boost by lessening the dragging effect of this tremendous debt burden, it also would put leverage directly in the hands of desperate borrowers in need of a true fresh start. Please contact Rep. John Garamendi and let him know of your support of this much-needed legislation.