You may soon be able to declare bankruptcy on your student loans—here's how

in loan •  7 years ago 

Student loan borrowers in the United States collectively owe almost $1.5 trillion in student debt, and according to the Brookings Institute, almost 40 percent of borrowers will default on their student loans by 2023.

Currently, it is nearly impossible to have your student debt forgiven during bankruptcy — but that may soon change. In February, the Department of Education announced that it will review and potentially alter policies that make it difficult for student debt to be discharged in bankruptcy.

Miranda Marquit, personal finance expert at Student Loan Hero tells CNBC Make It that there are three steps for discharging student debt in bankruptcy: Borrowers must find a lawyer, decide what type of bankruptcy proceeding to pursue and prove that they face "undue hardship."105081215-GettyImages-508275724_1.1910x1000.jpg

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