In an effort to address the growing concern for borrowers who face persistent financial hardships and difficulties repaying student loans, a report released this month sought to find lessons from borrowers who have lingering student loan debt from the 1990s or before.
The report, written by Kristin Blagg, a research associate at the Urban Institute, hinted at the characteristics of people struggling with decades-old debt in an attempt to create policy recommendations for lawmakers seeking to address this issue.
“We’re entering an era where the fact is that student loan debt can’t be discharged in bankruptcy and it’s really hard to get rid of other than to just pay it off,” Blagg said in an interview. “What I’m trying to do here is show the potential consequences of this — that you have these folks that are holding onto debt for a really long time and it may be pulling them down for other things.”
While not impossible, discharging student loans during bankruptcy filings is extremely difficult, especially since amendments to the Higher Education Act (HEA) in 1991 were passed, under which student loans are no longer subject to a statute of limitations for debt collection.