Nowadays, higher education is expensive. However, to advance in their careers, many people invest a lot of money to earn an advanced degree. Often, the educational costs are covered by student loans. Many people find that their student loans become a major burden.
A recent development, however, may be encouraging news for many student loan debtors. According to news reports, two Wisconsin Representatives have proposed a bill that would allow student loan debtors to refinance their loans the way that they refinance car loans or home mortgages. Additionally, recently, news reports have stated that the Higher Ed, Lower Debt bill would provide student loan debtors with a number of advantages.
For example, if the bill is passed, student loan borrowers will be able to deduct their loan repayments from their income tax filing. Typically, this would enable a student loan borrower to save $179 in taxes annually. For those people who have larger loans, the tax savings can be as high as $531 per year. In addition to tax savings, the Higher Ed, Lower Debt bill is designed to provide more information about lenders and the various types of loans they have to offer. At the same time, the bill emphasizes collecting and tracking student loan data for policy-making decisions in the future.
Finally, the bill proposes that it will create the Wisconsin Student Loan Refinancing Authority, which would be a public-private entity that will buy federal and private student loans from borrowers in Wisconsin and refinance them at a lower-interest rate. If the bill passes the legislature, Wisconsin will become the first state in the U.S. to have such a measure in place.
However, the bill has not passed yet. Until then, bankruptcy is probably the best option for obtaining student loan debt relief. While many people may be aware that bankruptcy may not excuse a borrower from all outstanding student loan debt, it may be possible to eliminate such debt by filing for bankruptcy. However, that is only after that borrower is able to convince the court that the debt has resulted in undue hardship, which has severely affected the borrower’s standard of living.
Source: Huffington Post, “Will the Student Loan Crisis End in Wisconsin?” Stephen Dash, May 26, 2015