As the cost of a college education continues to rise, it seems likely to expect that more and more students from across the country will be facing financial hardships upon graduation.
Many students are under the impression that if they qualify for personal bankruptcy, their student loans will go away. Unfortunately, this is not the case. Learn more about student loan debt and the strain it puts on the students who borrow.
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Debt: The Price of a College Education
As mounting student loan debt shatters the wallets of more and more Americans, bankruptcy has become increasingly prevalent.
Over $1 trillion in student debt has caused lawmakers to second-guess how educational loans are handled. In this infographic, you’ll learn about student loan debt and the strain it puts on the students who borrow.
Student Debt On Top of Student Debt 
How Costly is a College Education?
- The average tuition fee for a four-year private university is $28,500 a year. 
- Public, four-year universities cost on average $8,240 a year. 
- 7.2% of students drop out of college due to financial problems.
- Those from ages 18 to 24 spend around 30% of their income on debt obligations though it was nearly half that just 10 years ago.
- On average, undergrad students have $3,173 in credit card debt and $4, 100 by the time they graduate.
How Are They Paying? 
How Are We Paying For It?
- Over 1 out of every 4 parents were worried that loan rates would increase in their kids didn't immediately enroll in school.
Students tend to borrow a great deal of money from various sources.
|Federal Student Loans||Private Education Loans||Student Credit Card||Other Student Loans|
|30% / $6,983||9% / $6,358||5% / $1,357||4% / $5,437|
The Government's Role
- Due to a bill in 1998, students can no longer get federal student loans discharged during bankruptcy unless they can prove "undue hardship".
- In 2005, private student loans were given the same restrictions
- The majority of bankruptcy attorneys agree that this "undue hardship" is nearly impossible to prove in court.
Prospective Changes in Student Loans of 2012 
- Currently requires 20 years of income-based repayment to have your loans forgiven.
- Provision in the Student Loans Forgiveness Act would cut that down to 10 years.
Pell Grant Drops
- The full Pell Grant is $5,550 and families can only make $23,000 a year to qualify.
- That's down from the previous $32,000 threshold of years before.
- Those who graduate with a bachelor's degree earn on average 70% more in their lifetimes.
- On average, the cost of tuition and fees for a four-year public college or university has risen by 33% in the past 5 years.
- Many student financial aid letters neglect to differentiate between loans and grants.
- Through credit cards, mortgages, car loans, and 401 (k) plans all require the borrower to be informed, this isn't the case for student loans.
- The Consumer Financial Protection Bureau has created a financial aid letter template that would allow students and their parents to easily compare financial aid offers, though it's optional to use.
Student Loan Forgiveness Act
This piece of legislation would:
- Keep federal loan interest rates at 3.4% indefinitely.
- Only require people who take out student loans to make payments based on 10% of their income.
- Allow former students to have their debt dismissed after 5 years if they're part of the Public Service Loan Forgiveness program.
- Give borrowers the chance to re consolidate private loans into federal owned loans.
Both parents and students have felt the strain of being in debt from education.
Though some changes to legislation could help in the coming years, many are still in fear of their financial aid debts.
Many are hopeful that the Student Loan Forgiveness Act will help alleviate some of the pain from student loans.
For more information and to find a local bankruptcy attorney, check out Total Bankruptcy.