College is supposed to give students the chance at a better life. In too many instances, though, it’s doing the opposite: It’s sending them toward bankruptcy.
The reason is simple: College is expensive. Many students run up tens of thousands of dollars worth of student-loan debt while earning their degree. They then graduate into a job market that’s dismal. It becomes awfully difficult to pay these loans back.
According to the latest data, the average college student graduated with $20,000 in debt. A quarter of students graduate with more than $25,000 in student-loan debt.
Students are well aware of the financial burden that attending college has become. In fact, as many as 3 million qualified students will skip college in the next decade because higher education has become so expensive. One in five college students drops out because they can no longer afford to take higher-education classes.
This is a serious problem, and one that’s only getting worse. The numbers show that 268,000 college students filed for bankruptcy protection last year. That is a shocking number.
Part of the problem is that it is so difficult for students to get out from under their student-loan debt if they face a financial hardship upon graduation. The only way for graduates to eliminate their student-loan debt is to convince a judge that they have suffered an undue hardship. Unfortunately for graduates, judges almost never decide to make their student-loan debt disappear.
This is a major change from the way things used to be. In the 1970s, students would often file for bankruptcy as soon as they graduated from college. This way, they’d eliminate their student-loan debt and wouldn’t have to worry about paying it back. It was a way to start their post-college lives burdened with no debts.
That can’t happen today. In 1998, Congress passed a law stopping this practice. In 2005, Congress went even further and made the rules against eliminating student-loan debt even more difficult.
Students received a bit of good news in July of 2010. That’s when Congress passed a new law easing some of the restrictions against eliminating student-loan debt. Still, even with the new rules, the chances of graduates wiping away their loan debt are still extremely slim. It’s unfortunate, because by declaring bankruptcy, individuals erase almost every other kind of debt, including something as frivolous as gambling debts.
The high cost of college needs to be addressed. Tuition costs are bankrupting the nation’s students. The numbers show that 19 percent of all individuals in the United States who declare bankruptcy are students. In the last 10 years, student loan debt has more than doubled from $41 billion to $85 billion.
It’s a problem that’s only going to get worse if colleges and legislators don’t somehow figure out a way to put a halt on the ever-escalating costs of attending college.
