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Massachusetts students suffer under heavy loan debts

The student loan debt crisis garners a lot of news media attention both in Massachusetts and across the countries these days, and the readers of this blog know that we have been following this news closely. The bottom line is that while in a struggling economy many of these students need debt relief, filing for bankruptcy under the present United States laws is unlikely to discharge an oppressive student loan debt.

Overall, Massachusetts college students graduate with an average of about $27,000 in debt, 14th in the nation. Interestingly, students at smaller, locally-oriented Massachusetts schools are saddled with more student loan debt that those at exclusive, nationally known schools like Harvard. An average student at one Massachusetts private school, for example, leaves with over $45,000 in debt.

Students' debt load has been increasing over the years. Private colleges attribute this to a tough economy in which some students go to school because they cannot find work. They also point to the fact that unlike larger, better-known universities, they do not get a lot of money for research, which they claim schools can use to cover operating expenses.

Some might say that the United States Congress should consider making it easier to discharge a student loan in bankruptcy, arguing that the students are just as entitled to a fresh start as anyone else who makes an investment that doesn't pay off as expected. On the other hand, one reason that so many are able to go to college in the first place is that creditors are more willing to extend student loans because they know the student will have to repay them.

Perhaps the time has come at last to study the current bankruptcy law as it pertains to student loans. Until then, however, the best a student in financial straits can probably hope for out of a bankruptcy is relief on other debts so that the student can afford a reasonable repayment plan on their student loans.

Source: The Boston Globe, "Gradates of small colleges earn $38,000 in debt," Kathleen Conti, Oct. 19, 2012

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