Right now Congress makes it illegal to actually extinguish these loans due to bankruptcy

Right now Congress makes it illegal to actually extinguish these loans due to bankruptcy

Most: We’d probably be remiss if we didn’t acknowledge that here we are talking at Boston University, which is a school that is not inexpensive to attend. Can you just talk briefly about how we got here in the first place and is there a way out?

Williams: Sure. Well, I think we got here in part because since the 1980s, tuition has increased eightfold relative to wages. So in a sense, students that were going to a state school or even a private school leading up to the 1980s, you could have a summer job, you could save, and tuition was much more reasonable than it is now.

So debt became a bigger issue. We also had cuts as a result of the oil embargo of 1979, federal cuts that started in California and swept the nation, which reduce the amount of state funding that was received. That put greater pressure on universities across the United States to increase tuition costs. And that was all borne by students themselves.

Williams: I definitely see a way out of it. I think it’s really twofold. The first is greater financial literacy. It’s really hard to imagine that a 17- or 18-year-old really knows their critical career path or actually how much debt they should take on and how to pay that debt back.

I mean, this is a decision that 17- and 18-year-olds are making with their parents sometimes. And it’s something that lasts 20 to 25 years. That’s concerning. So I think the first step is better financial literacy at the high school level, especially career counseling. Continue reading Right now Congress makes it illegal to actually extinguish these loans due to bankruptcy