A St. Cloud lawyer wants Minnesota’s two U.S. senators to get behind a push that would allow student loan debt to be wiped out in bankruptcy.
The St. Cloud Times says it’s possible to discharge debt now, but it requires people to show “undue hardship” in court and that rarely happens.
“If it’s going to cost you $20,000 to find out (if you can discharge loans), you’re not going to do it,” William Kain told the paper.
Lacy Hill thinks at least a portion of students’ loans should be dischargeable. The Princeton High School graduate went to St. Cloud Technical & Community College before she attended Grand View University for five years.
Hill earned a degree with majors in psychology and human services from the private school in Des Moines, Iowa, and now runs group mental health programs at St. Cloud Hospital.
She has about $115,000 in student loan debt. Some is from private lenders, some from the federal government.
A few years ago, Hill’s car was repossessed, and she went through Chapter 7 bankruptcy. That process does not require debtors to make payments for a set period, as Chapter 13 does.
Hill said she felt uninformed as she agreed to take out the loans. Hill said potential debtors should be required to take some sort of class in high school or later.
Another attorney says there isn’t a lot of public support for any bailout for people with crushing student load debt, thanks to the bailout of large banks and corporations during the economic meltdown.
Sen. Al Franken told the Times he supports the ability to discharge student loan debt. Sen. Amy Klobuchar said her support is behind a measure to allow former students to refinance the debt.