Colleges and universities are facing huge budgetary constraints due to lack of state funding, forcing them to increase tuition. Undergraduate and graduate students are lucky to graduate without huge student loan bills. By the time they enter the workforce, many of them are drowning in debt that will take decades to repay. Some find themselves with student loan debt for the rest of their lives. Only an expert bankruptcy attorney can tell you if you can qualify for a student loan bankruptcy or a cancellation of your student loan debt – speak to an expert for a free consultation!
Student Loans and Bankruptcy
The upward climb of tuition of both private and public institutions of higher learning continues. Four-year public colleges and universities increased their in-state tuition and fees by an average of 4.8 percent from the 2011-2012 to 2012-2013 academic years. Average tuition and fees for a nonprofit private four-year institution increased nearly $1,200 during this time. An average of $13,218 in financial aid per full-time equivalent undergraduate student was granted during the 2011-2012 academic year.
During the past ten years, the number of federal Stafford Loan recipients almost doubled and the average amount of these loans increased by eight percent. Though U.S. President Barack Obama has called on colleges and universities to contain costs rather than relying on tuition increases, many of these institutions are finding this difficult to do. They have trimmed as much as they can, they say, leaving them with few other options.
In Connecticut alone, the Board of Regents for Higher Education is considering a tuition increase of up to 12.4 percent for the 2013-2014 academic year. State funding has declined by $49.4 million during the last two school years and declining enrollment has increased the projected deficit. Approximately 100,000 students will be affected by this tuition increase, forcing many to view student loan interest rates as a necessary sacrifice for continued education.
After leaving school, some people may be able to defer their student loan payments, while others will lower their payments through student loan consolidation. Student loan cancellation or discharge of loans through bankruptcy will be an option for very few loan holders. With more students saddled with higher loan balances, student loan default seems more likely.
According to a recent report, the 90-day delinquency rate for existing student loans increased by 47 percent between the October 2005-2007 and October 2010-2012 periods. Approximately 15 percent of student loans originated from 2010 to 2012 are delinquent. Experts expect the level of student loan delinquencies to increase during the next six months. Tuition increases and a weak economy with limited job prospects are creating huge financial difficulties for current and graduating students. Speaking to a bankruptcy attorney expert is an important thing to do if you feel as though you are buried in your student loans and you have no way to repay them. Speak to an expert for a free consultation today!