Student loans represent the largest portion of consumer loans in the United States at over $1 trillion, according to a January 24, 2013 Huffington Post article. Currently, these types of loans, whether they are private or federal, cannot be discharged through bankruptcy, except in very rare circumstances where a party can show that the loan payments cause an undue hardship. Federal student loans have not been loans that federal bankruptcies can wipe out since 1978 and that has been the case for private student loans since 2005.

Senators Dick Durbin, Sheldon Whitehouse and Jack Reed have cosponsored the Fairness for Struggling Students Act of 2013. This was an act that Sen. Durbin has previously authored. This act, if passed, would be helpful for many Americans who face high debt and, in some cases, unemployment. That is especially true for graduates with private student loans. Federal student loans tend to be reasonable with “good” terms that offer low interest rates, extended deferment periods and some forbearance allowances. Additionally, borrowers can pay the loan on an income-based repayment plan.

The American Association of University Women supports the bill. Others have asked Congress to take action on this issue. Furthermore, Sallie Mae, part of the U.S. Department of Education which holds federal student loans, is open to the idea of a scheme to discharge federal student loans. This scheme would need to include a minimum repayment time period and a condition that the payee is facing financial difficulty, according to a spokesperson. Considering the high costs of higher education, this bill could help many move on with their lives in the sour economy.

If you are facing financial difficulties and would like to consider bankruptcy, then you should meet with a qualified attorney. At Jayson Lutzky, P.C. we keep up on the latest trends in the law. Mr. Lutzky has over 29 years of experience practicing law and has worked for thousands of satisfied clients. He offers free in person consultations. To learn more, call (800) 660-5299 or visit today.