President Trump Is Right
We Need to Remove the “ Albatross ” of Student Loan Debt From Our Young People and Families
By Jim Haller , Esq . Sulaiman Law Group , Ltd . Oak Brook , Illinois View Bio
During the presidential campaign , then-candidate Donald Trump promised to “ negotiate ” a solution to the student loan debt crisis . “ This debt should not be an albatross around their necks for the rest of their lives ,” Trump said . “ It ’ s not fair and we are going to fix it !”
President Trump is right . Student loan debt is thwarting the creation of young families . It is delaying marriages and putting off the raising of children . It means that first homes and new cars are purchased much later , if at all . The family is the key to American life … the American middle class … and the American economic engine . President Trump ’ s choice of metaphors is an apt one ; like the albatross in Coleridge ’ s The Rime of the Ancient Mariner , student loans are the burden that becomes a curse when hanging around the necks of millions of young Americans .
It would be wise for the new White House and Congress to move quickly to convert Trump ’ s enthusiasm for providing student loan debt relief into policies that will ease the pressure of rising tuition costs for future students . But the help shouldn ’ t stop there . Even before they address student loan costs for future generations , President Trump and Members of Congress can provide relief to today ’ s millennials , their families and older student loan borrowers by enacting legislation to restore bankruptcy protection .
My colleagues and I in the world of bankruptcy law witness the plight of student loan borrowers in trouble every day . We witness firsthand the cumulative effect of the fees , interest and penalties that push loan balances to several times the original amount . Unlike virtually every other debt , student loans – both government and private – are generally not dischargeable in bankruptcy . Financially distressed borrowers face a lifetime of debt with little or no chance for escape , no matter how dire their economic situation .
How big is the problem ?
According to the Federal Reserve Bank of New York ’ s 2016 Q3 “ Report on Household Debt and Credit ,” outstanding student loan balances stood at $ 1.3 trillion as of September 30 , 2016 , growing by $ 20 billion from the second quarter of last year . At that time , 11 percent of aggregate student loan debt was 90 or more days delinquent or in default .
We know that unmanageable student loan debt can have devastating financial consequences for people of all ages , often placing ruinous burdens on borrowers in cities , suburbs and rural communities , and preventing middle class and poor Americans from using their education to build better lives for themselves and their families . In fact , student loan debt is so crippling for millennials that young families often cannot get off the ground . Student loan debts dramatically deter new graduates from using the fruits of their education to start new and innovative businesses . The prospect of becoming a parent and taking on financial responsibility of a home mortgage ( and , even more daunting , another human being !) is often so unimaginable that marriage is put off .
Bankruptcy attorneys see all of this every day … and we also know what the solution is . The truth is that there currently is no real way out for Americans saddled with student loan debt when there is little realistic chance that debt can be repaid . For most other consumer debts , the bankruptcy
6 CONSUMER BANKRUPTCY JOURNAL Spring 2017 National Association of Consumer Bankruptcy Attorneys