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It is much more difficult now to discharge student loans through bankruptcy than it might have been several decades ago. Removing student loan debt through the process of filing bankruptcy was a more common practice during the 70′s and in order to decrease this practice, reform via enhanced laws and regulations were put into place to make it more difficult for Americans to discharge these loans through bankruptcy. In today’s current time, the courts will look at specific case factors to determine if the specific hardships that relate to the individual case warrants discharge of the student loan. The courts will review the case to determine if the person can maintain a minimal standard of living if forced to repay the student loan debt. The courts will look to determine if whether circumstances exist that indicate that the situation is likely to persist for a significant portion of the student loan repayment period. The courts will also review the case to determine if the debtor made good faith efforts to repay the student loans. Student loan default rates have been on the incline in the current economic climate. The recent recession has helped to apply negative pressure on default rates. According to a recent report from the Tuscan Citizen, three year default rates on student loans at for profit colleges is at 25 percent. Prospective students need to consider these variables before entering into an agreement for student loans. Author: Stephen Johnson
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