As college costs continue to rise, and in an economic climate where family incomes are suffering, more and more students must borrow in order to gain access to higher education. The result is that an increasing number of graduates find themselves saddled with high educational debt. As we previously reported, the Project on Student Debt estimates the average debt for 2009 bachelor’s degree recipients at $24,000. Students with advanced degrees may carry an even heavier burden.
According to a recent study by the John J. Heldrich Center for Workforce Development at Rutgers University, only 56 percent of 2010 graduates were able to find work. The New York Times and others have reported that the amount owed in student loans last year was greater than credit card debt and is expected to exceed $1 trillion this year. The result is many student loan borrowers are unable to repay their loans.
In an effort to tackle this growing issue, Senators Dick Durbin (D-Ill.), Al Franken (D-Minn.), and Sheldon Whitehouse (D-R.I.) have introduced the Fairness for Struggling Students Act of 2011 in the U.S. Senate. Representatives Steve Cohen (D-Tenn.), Danny Davis (D-Ill.), John Conyers (D-Mich.), and George Miller (D-Calif.) introduced the related Private Student Loan Bankruptcy Fairness Act of 2011 in the House of Representatives. Both bills would restore the ability to discharge commercial student loans in bankruptcy proceedings, reversing a 2005 change to the law for borrowers who find themselves unable to make payments on their loans.