ROCKFORD, Illinois (WIFR). Whether you were in college 10 years ago or just graduated, you may be dealing with student loans. Financial experts say students struggle with debt for years after graduation.
Lawmakers in Washington are listening to new legislation that could write off student loan debt for millions of college graduates who must file for bankruptcy.
“Student loans could never be declared bankrupt, so while a person can file for bankruptcy and get rid of a lot of debt, student loans cannot, and so today Senator Durbin is proposing to allow student loans to be part of bankruptcy. said Jennifer Zalapi, an advisor to Mainstreet Financial in Rockford.
Zalapi says Senator Dick Durbin’s proposal will benefit people who have been paying off debts for years, but she believes there are several downsides.
“For anyone, filing for bankruptcy is a bad thing for your credit history,” Zalapi said. “It will definitely prevent people from buying houses anyway, because you will have to wait many years to rebuild your credit.”
However, economics professor Tammy Batson believes the positives outweigh the negative. Freeing up money would allow people to buy cars or houses, which would boost the economy.
“These people may start to see them return to the economy, you know, they would have a little more freedom to go out and spend, not knowing they had this debt on their shoulders, and also if they kept going in keeping up with the times, they may actually have some kind of new income, which will actually be money that they can spend on the economy, ”Batson said.
Both Senator Dick Durbin and Illinois Attorney General Kwami Raoul testified before a Senate committee. They say nearly 44 million Americans are paying off student loans, with the average graduate owing more than $ 28,000.
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