R.C. Lim, Attorney and Counselor at Law

Student Loans Are A YOKE On the Backs Of Young Americans

At this point in my admittedly short career as a bankruptcy attorney, I have spoken to too many alums — many from very good schools — that have borrowed more than they can afford to pay off.

Unfortunately, there has been much too little about this story. Much like the case of mortgage lending that occurred before people actually began defaulting on their notes, there is hardly any coverage of the problem in the media. Today’s NY Times article is a wonderful exception. Unfortunately, it’s not news until people actually default. And with student loans, the loans can be deferred for a number of years before a default actually occurs.

The central problem is the same as that which happened with the mortgage crisis: deregulation! The reason that it is much much worse for consumers is that unlike other forms of debt, borrowers cannot discharge student loans except in exceptional circumstances. The Brunner test is so exacting that most bankruptcy attorneys don’t even bother.

Make yourself aware of this problem. And don’t let any college students you know take on too much debt. Even to go to Harvard, it’s simply not worth it.

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