Millions of people have gotten a break from paying their federal student loans during the pandemic. But there's been no relief for millions of others with private student loans who may not realize bankruptcy could be an option.
"For folks that have lost their jobs during the pandemic that are struggling for money that are still struggling to stay afloat, bankruptcy might be the best option for them," said Mike Pierce, the executive director of the Student Borrower Protection Center."Particularly, if they're already going to file bankruptcy because of medical debt or credit card debt, being able to escape these often very high-interest rate private student loans is a lifesaver.
"Our investigation found evidence that for years, big and small companies across the country have been telling borrowers that they're not eligible to discharge their loans and bankruptcy, while also telling their investors that law actually says you can discharge these in bankruptcy," Pierce said. Attorney Christie D. Arkovich has been helping people file for bankruptcy with their student loans since 2016 but says only a small number of people are aware bankruptcy is an option.
Arkovich's clients range from people in their 30s to people in their 60s. Most have student loans with high-interest rates from the mid-2000s.
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