Life led Elizabeth Hadzic and Kim Coles to bankruptcy court.
Hadzic, 50, a psychotherapist in Maryland, doesn’t make enough to support herself and her adult son, whose health struggles set her back thousands of dollars. Coles, an accountant in Oregon in her late 60s, was laid off last year.
Both have tens of thousands of dollars in student loan debt. Although they have been making payments on those loans for years, they no longer can. And both, in the absence of an alternative, have resorted to taking the costly, typically unsuccessful route of trying to get their loans discharged in bankruptcy court.
That’s where things diverge.
For Hadzic, bankruptcy is proving to be the answer to her financial woes. After months of litigation, she’s on track for a full discharge. In Coles’ case, the government is putting up a fight − though she is of retirement age − against discharging the balance of a loan she’s been paying down for more than a decade.
“I always paid my student loans,” Coles said in an interview. “I was never late.”
The disparity in how the government is treating their cases is indicative of the intractability of one of the country’s most extreme and inaccessible forms of student debt relief, as the Biden administration grapples with finding alternatives to the kind of sweeping student loan forgiveness option that the Supreme Court struck down in June.
I don’t understand why the government can’t at least offer everyone the opportunity to refinance at zero interest so they can get those private debts paid off.
Especially for government owned loans. It’s always been bizarre to me that I pay interest on my federal student loans. My education makes me a huge contributor to the economy already, why do I need to pay back 2-3x my tuition over the term of my loans too?
Because they’re considered safe loans because they are very hard to discharge. So your student loans are funding your parent’s pension funds and 401k’s
Isn’t it that the companies overseeing those pension funds and 401ks have given out that money as risky loans because they had the promise of being able to create a generation of debtors by going into schools and targeting children for predatory interest rates?