It is possible to qualify for student loans after bankruptcy
A bankruptcy need not prevent a person from getting an eductation.
December 12, 2013 /24-7PressRelease/ -- It is possible to qualify for student loans after bankruptcy
Article provided by Guthrie Law Office
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Higher education has never been more expensive. And according to an annual report by the College Board, 60 percent of students finance their education, to a whopping average of $26,500 per student. Unfortunately in today's competitive marketplace, obtaining a living wage without some educational experience can be difficult. That leaves students with little other choice than to take out loans to pay for their education.
Even college graduates may face difficult job prospects. More and more students may be considering obtaining graduate or professional degrees in their chosen fields in order to stand out from other job applicants. Debt can add up this way quickly. The average law student borrows $107,000; the average medical student $150,000. A wide variety of financing is usually required to cover the costs of such advanced degrees.
Hard economic times
The unemployment rate in the U.S. is still currently over 7 percent; the numbers are higher when considering people who have given up on looking for employment. Long-term unemployment is also high. This presents several problems: a parent may not be able to help a child with college, a long-term unemployed individual may not feel he or she is able to afford an education and people who do graduate with massive debt may have to settle for jobs that pay less than anticipated.
Benefits of declaring bankruptcy
Many people avoid bankruptcy because it affects their credit and because of a perceived social stigma. It is true that after bankruptcy it can initially be more difficult to obtain loans. However, it is still possible to finance an education after bankruptcy, and many people facing bankruptcy may not have good enough credit to qualify for private student loans anyway.
Personal bankruptcy can give a person a fresh financial start. In fact, bankruptcy may not have a large affect on the ability for a person to get student loans. One obstacle is that parents who have declared bankruptcy in the last five years are not eligible for federal PLUS loans. A person who personally filed bankruptcy within the past five years cannot receive Graduate PLUS loans. However, a parent's bankruptcy does not affect a child's ability to qualify for federal Perkins loans, Pell Grants and other federal student loans. In addition, Graduate Stafford loans can often be enough for a person to pay for an advanced degree.
Types of debt matter
With the high cost of education the public is becoming more aware that it can be extremely difficult to obtain forgiveness for federal student loans (private loans are easier to get rid of). However, other debt obtained during school, such as credit card balances, do not have the same protection as federal loans. By lowering interest and reducing payments for other debt, people who use bankruptcy may be able to begin to save for college or help a child to pay for an education.
People struggling with debt, whether because of student loans or other economic hardship, should contact an experienced personal bankruptcy attorney to discuss their financial situation.
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