Student loan debt is a growing issue in Ohio and across the United States. Individuals are struggling to pay back loans they incurred to cover education costs, many of them paying significant portions of their income to loan companies every month. For those who are looking for ways out, there are seven options for discharging student loans.
Student debt receives special treatment under the Bankruptcy Code that makes it more difficult to discharge than other types of debt. Typically, in order to secure a discharge in bankruptcy, the debtor must demonstrate good faith efforts to pay back the debt, an inability to maintain a minimum standard of living and pay back the loan and a continuing circumstance of financial hardship.
A total and permanent disability discharge may be available for individuals who are unable to work due to a disability. If the school associated with the loan has since closed, students may be able to secure a closed school discharge. These are typically available only to students who were enrolled within 120 days of the closure. If the school falsely certified the student as eligible for loans or if the loans were taken out without the knowledge of the student, a false certification discharge may be available.
The borrower defense discharge is open to students who borrowed money to attend schools that employed deceptive or illegal practices to convince individuals to take out student loans. If the relevant school failed to make a required refund payment to the U.S. Department of Education, the student may qualify for an unpaid refund discharge for the amount the school failed to pay.
Finally, student loans are discharged if the borrower dies. Individuals who are struggling to make payments on student loans or other debts may want to consult an attorney. An attorney with experience in bankruptcy law may be able to offer advice about debt consolidation or reduction. An attorney may be able to negotiate with creditors to reduce debts or to secure better repayment terms.