Students loans – will you ever get rid of them? - MoneySense

Students loans – will you ever get rid of them?

Even drastic measures like bankruptcy may not be enough to wipe the slate clean


With the average student debt load at $26, 680 in 2009, and interest rates at 8.5%, it’s not surprising to learn that former students are having difficulties repaying them.

For those who can’t keep up with their payments, the situation is made increasingly difficult due to the fact that student loans are classified in the same category as unpaid child support and criminal court settlements, A debtor can claim bankruptcy, but his or her student loans are still payable — and still collecting interest.

Prior to 1998 student debt was considered the same as all other debt and forgiven equally under bankruptcy. Now, it takes seven years after school to even apply to have student loans forgiven.

Even if one does wait seven years, the loan still might not be forgiven, especially if over 50% of one’s total debt is comprised of student loans.

So think twice before registering for those classes. If you have to borrow for tuition, you might be paying it off for a long time.