Is bankruptcy the solution for the student loan crisis?

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Aug 21, 2013

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Is bankruptcy the solution for the student loan crisis?

Student loans are virtually the only type of loan that can't be discharged in bankruptcy court. A new report from the Center for American Progress argues that changing that rule would be good for students.

Students protest the rising costs of student loans for higher education on Hollywood Boulevard on September 22, 2012 in the Hollywood section of Los Angeles, California. Citing bank bailouts, the protesters called for student debt cancelations.

Student loans are virtually the only type of loan that can't be discharged in bankruptcy court. A new report from the Center for American Progress argues that changing that rule would be good for students.

This morning, President Obama spoke on the rising costs of college. The Consumer financial Protection Bureau estimates that student loan debt in the U.S. is close to 1.2 trillion dollars.

College grads who run into financial trouble have no way to shed that debt, short of dying, that is. Student loans are virtually the only type of loan can't be discharged in bankruptcy court.

A new report from the Center for American Progress argues that changing that rule would be good for students and taxpayers too.

David Bergeron is the vice president for Postsecondary Education at the Center for American Progress and a co-author of the report.