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Bankruptcy, wage garnishment for parents who can't pay loans

Newly released federal information shows that parents in Washington, D.C., and other parts of the nation are struggling to repay the financial burden associated with their children's student loans. The parents have participated in the Parent Plus program, which permits them to borrow nearly unlimited amounts to pay for college costs. With the rising price of a university education, many parents are struggling to regain their financial footing after their youngsters graduate. In some cases, bankruptcy and debt cancellation are the only options for overwhelmed parents.

Although most student loans are not eligible for discharge during bankruptcy, a growing number of parents are able to have their debt canceled due to serious and permanent disabilities. Without that possibility, however, parents can suffer through wage garnishment that can also affect social security checks. Parents and their recent graduates are equally worried about the financial ramifications that come from allowing people to borrow too much.

Official reports show that taxpayers also suffer when parents cannot repay the college debts. The government does not receive the financial compensation it requires continue the programs, which can cause some tightening of the purse strings. Although families and the federal government can both suffer when the loans go bad, it appears that universities and colleges still benefit, no matter where the money originates.

Area residents who are suffering because of unfair student loan debt may have some legal resources, including bankruptcy and other options. A Washington, D.C., bankruptcy attorney may be able to provide additional information about financial and legal options for those who are drowning in student loan debt. No one should have to suffer such a serious financial burden.

Source: ProPublica, "As Parents Struggle to Repay College Loans for Their Children, Taxpayers Also Stand to Lose" Marian Wang, Apr. 04, 2014

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