Pursuing a higher education has many benefits: job opportunities, increased earning potential, societal benefits etc. However, receiving a degree comes at a cost – and for some, a cost they may never be able to repay in their lifetime due to the high interest rates of private loans.
Under the proposed “Fairness for Struggling Students Act of 2013” private student loans would be dischargeable in bankruptcy.
According to the NCBRC, the biggest issue facing individuals who possess private student loan debt is the lack of flexibility of these types of loans:
Although private student loans comprise only about 20% of the total student loan debt, private loans tend to be substantially more onerous for borrowers. They typically have higher interest rates, limited or no availability of deferment or forbearance, and no income-based repayment plans. In addition, they are not subject to the consumer protections in place for federal student loans.
To learn more about the pending legislation, click here