Individuals facing bankruptcy proceedings seek financial relief where almost every type of personal debt is discharged, allowing people to gain a fresh start. For the many with student loan debt, however, a completely fresh start is out of the question.

In 2005, Congress passed a law lumping student loan payments in the sacrosanct category where other hard-to-get-rid-of financial obligations like criminal fees and child support reside. Making student loan debt untouchable works in favor of lenders and keeps many diligent Americans in financial trouble.

Advocates for struggling borrowers balk at the current student loan setup. Some believe that the laws need changing to help a portion of the 37 million Americans with student loan debt get a fresh attempt at the American dream. The argument is that changing the law would lead to the least costly method for dealing with over-burdened student debt. But, despite a loud cry, little has been accomplished.

Recently, President Barack Obama suggested legislation to stop the looming doubling of student loan interest rates. This proposed change, however, would only help future student loan recipients. The Obama administration has enacted some protection for people unable to pay back federal loans through ideas like public-service forgiveness programs and income-based repayment plans.

According to The Associated Press, little evidence exists that changing the current law would decrease availability of private student loans. In fact, private student loans were reportedly on the rise before 2005, when they were still dischargeable. However, with the recent credit crunch, many potential borrowers do not qualify.

Though financial struggles within the home seem so personal, the reality is that any changes to legislation regarding lending or bankruptcy do have a larger affect on our country. This is an important but also a political matter that will be thoroughly debated before changes are implemented.

Source: The Associated Press, “Even after bankruptcy, trapped by student debt,” Justin Pope, April 25, 2012