Washington residents that are struggling under the weight of their student loans may be glad to know that the Consumer Finance Protection Bureau, or CFPB, is once again taking up the student loan crisis. Many people are in dire need of some sort of student loan debt relief. At this point, the student loan debt situation is being likened to the housing crisis that most believe began the recession.
The CFPB is currently taking suggestions regarding viable repayment options to propose to the federal government. Those comments and suggestions will be taken until April 8, 2013. The CFPB believes that the current student loan crisis is a major component keeping the economy from fully recovering from the recession.
There is a possibility that the weight of student loans is keeping younger people from buying homes, cars and otherwise spending money in a way that could stimulate the economy. As the law stands now, student loans can't even be refinanced at a better rate than the current eight to 15 percent. In addition, a law passed in 2005 keeps student loans from being discharged in a bankruptcy.
Student loans are generally not discharged in a bankruptcy along with other debts. This can sometimes diminish bankruptcy's usefulness as a debt relief solution. Filing for bankruptcy protection can help filers in Washington eliminate the rest of his or her debt, but the student loans will not be affected. This may help, but may not give the filer with student loans a completely fresh start. If the CFPB is successful, that may change.
Source: Huffington Post, "CFPB Zeroes In On Private Student Loan Crisis (VIDEO)," Tyler Kingkade, Feb. 21, 2013