The moment you realize you are buried in unaffordable student loans is the time you realize there is a good chance your future financial life is going to not be as rosy as you had planned for.
Headed off to higher education is a hopeful time in life. Opportunities abound with education and visions of higher income are in front of you. But then for many, reality hits them square in the face and they learn the difficult truth that life isn’t always what you assume it will be.
Many people have woken up to learn the education they pursued was overpriced or the field they spent so much to study, pays so little. The drowning in student loan debt can’t be blamed on just one person or issue. From well intentioned parents, school counselors, assumptions by most, and marketing by both for-profit and public schools – it’s easy to wind up in killer student loan debt.
Student Loan Forgiveness Options Exist
For private student loans, student loan forgiveness is typically relegated to bankruptcy options. And despite of what you may have heard or believe, some private student loan debt may be eligible to be discharged in bankruptcy.
Private student loans have been pushed on many people for things like drug rehab facilities to pilot training schools. Even schools that did not meet basic accreditation standards were pushing private student loans on students. All of those examples are loans which can be eliminated today in bankruptcy.
In addition, if a student loan is outside the statute of limitations, you can raise that as a defense if you are ever sued. Other student loans have such poor documentation they can’t even prove you actually owe the debt and that can be raised as a defense if you are sued.
Federal Student Loan Forgiveness
Federal student loans are a different story. A number of programs exist to have federal student loan debt made more affordable or eliminated.
After many years of conflict some irregular forgiveness some programs like discharge due to death, disability discharge, and closed school discharge have become much more dependable and stable forgiveness options.
Other forgiveness programs like Public Student Loan Forgiveness and Borrower Defense Discharge are in a state of flux and the actual implementation of those programs has yet to be seen.
Even within the federal student loan forgiveness programs the rules can be very particular and some loans may not be eligible for inclusion in one format but once they are consolidated into a new loan they then become eligible. Other former federal loans like a spousal consolidation loan may never be eligible for any forgiveness program.
Student Loan Forgiveness is a Mess
There are really no broad general rules a student loan debtors can count on. And certainly there is no level of assumptions that may be relied on to understand forgiveness options. Every situation is different because of the underlying issues of the debtor and their combination of loans.
The only concrete advice to offer when it comes to both private and federal student loans when it comes to forgiveness is you should absolutely talk to a knowledgeable professional like Damon Day or ask me your question.
Even the private and federal student loan servicers don’t really understand the many forgiveness options and possibilities. The stark reality is you are on your own when it comes to hunting down actual factual advice about your loans and your situation.