BUSN201 MO5 Discussion - Should Student Loans be Dischargeable in Bankruptcy?

Currently under US law while most unsecured debt such as credit cards can be discharged in bankruptcy student loans cannot.

· Should they be able to be discharged? Why or why not?

· What would be the advantages and disadvantages to being able to discharge student loans in bankruptcy?

· What rights to creditors have in collecting student loan debts?

· What rights to students have in collections?

· Review the article - Student Loans and Bankruptcy Article

I think that student loan debt should be able to be discharged. Many jobs today require degrees and to achieve that many students will need to take out loans. Just because the government thinks your family makes enough money for you to go to college doesn't mean they actually do. If you want to make a living wage your going to need a job that requires a degree. Once you are out of college you have to start paying those loans back and you may not be in a good financial place, so you are just going to accrue even more late fees and interest. The advantage to being able to discharge the debt is that you would be debt free and starting over with a clean slate. However, that clean slate means that you have no credit to your name and your starting all over. I feel like this would be a lot easier while you are young rather than when you are older with a family and more established. The amount of debt some people take on to attend college is staggering. I think that creditors should be able to try to get some if not all of that back. However, I think that it should be on the borrowers terms. Not every person can start out making $250 payments. I think the student should be able to have a say. If things are hard that month and you can only make a $50 payment then that shouldn't be an issue, something is better than nothing. I feel like a lot of collectors don't want your payment unless it is the payment they're asking for and that causes a lot more issues for the student because then they are down a payment and have gained a late fee. There is also not enough education on student loans and the consequences that they carry. Some students leave high school not knowing how to balance a checkbook or do their own taxes, how should they be expected to know what's going to happen when they pull $50,000 in loans out for school?