Understanding Student Loans
If you have federal government loans, they will get discharged. This means that your estate will not have to pay back those student loans. Survivors can apply for a death discharge to cancel a borrower's federal student loans.
The interest rates on federal student loans are prescribed by law and are usually no higher than 8%. There are no limits on interest rates for private student loans, which means they can vary depending on the lender and the borrower.
For higher education, the solution is more value for less money. Student loans, if they are to continue, should be made dischargeable in bankruptcy after five years -- but with the school that received the money on the hook for all or part of the unpaid balance.
The interest rates on private loans are higher.a rule of thumb for loans being no more than 50% of the salary of the targeted job has the advantage of being a simple rule. It is not a bad protocol as long as interest rates remain unusually low.
Student Loans & Bankruptcy
Yes, but it is much more difficult than discharging other types of unsecured debt like credit cards. You have to prove "undue hardship".
Student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt "will impose an undue hardship on you and your dependents."
Most student loans are not dischargeable in bankruptcy unless you can prove "undue hardship", but there are a few exceptions to this rule.
Yes. Actually paying off any debt is absolutely worth it. There may be some talks about tax breaks, or other reasons to carry debt, but in reality, that is all hogwash. So, Instead of obligated to someone else for money plus interest? Pay off your debt and move on.