Although
the economy has picked up a bit in recent time, we are still in a recession and
people feel the pinch not just in their wallets but in the limited job market
as well. Not surprisingly, when young
professionals are out of a job and cannot seem to find a suitable replacement,
they often go back to school.
Consequently, graduate school applications have increased dramatically over the past couple years. For example, the number of people taking the
LSAT (a prerequisite for law school) increased 20% from 2008 to 2009 and other
graduate school admissions tests saw a similar, if not greater, increase.
But
just because you go to graduate school does not necessarily mean you are going
to land your dream job. And when
post-graduation expectations are not met, that means that there is a whole lotta
debt to account for!
Such
is the case for a Charlotte Law School graduate who is attempting to have his debts
discharged through bankruptcy proceeding—a very difficult undertaking. The
entertaining part of his petition has to do with what he expects his
I
had previously blogged
about this issue earlier in the year; it is very difficult to discharge student loan debt without a showing of extreme undue
hardship. Since he has no chance of the
school admitting that they should have known he would not be able to pay his
debt, I think that bankruptcy will not be the answer for this financially
strapped lawyer.
Of
course, he could have avoided this mess by not getting that far into debt to
start with. One article I found helpful
in controlling
educational debt included these tips:
- Look into
scholarships and grants
- Work your way
through graduate school
- Ask yourself
whether your new career can realistically pay off your debt—i.e. whether or not
your aspiring career will pay a salary commensurate with the cost of the
debt you are about to incur?
- Put yourself on a
real budget
LegalMatch
also has some good options for those people considering canceling their
loans. Canceling loans essentially means
that you engage in a type of public service and get part or your loan
obligations reduced. Teaching needy
people, joining the military or other uniformed service, or performing
community service are all examples of activities that have allowed for loan
cancellation.
Whatever
approach people take to financing their education, the long-term repercussions
for failure to pay off your debt can be lasting and bankruptcy is rarely the answer. That being said, considering what your
ability is to pay off your debt before you get into it and looking at loan
cancellation options once you are into debt seem like two viable options that
are often overlooked.
By: Violet Petran
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