Thinking about going back to school for a new career? It's a tempting option during tough economic times. But if your career path doesn’t work out as planned, your resulting debts may end up limiting your options instead of widening them. The "national student debt"--the total outstanding student loan balance in the United States--is approximately $730 billion, and growing. Debt like this prevents people from taking risks, being entrepreneurial, or moving to a new city in search of opportunity.
But there is help.
There are new tools that allow you to better manage your debt repayment, and alternate paths in education to limit student loan debt before it starts. Student loan reforms signed into law March 30 give all borrowers the right to limit their student loan payments to 10% of income. The same law gives more public servants--that’s anyone who works for the government, the schools, military, or any nonprofit organization--will have access to a program that can get their debts forgiven outright.
And a recent Supreme Court ruling suggested a possible end to one of the most punitive student loan rules. Before the recent reforms cut them out of the program, the student loan industry lobbied for changes to the bankruptcy laws in 1998 and 2005 that exempted all student loans--even commercial, non-subsidized loans--from bankruptcy protection, except in the rare, hard-to-prove case of “undue hardship.”
The new ruling may reopen the broader case that student borrowers deserve to have bankruptcy as a last resort.
If student loans are on your mind, I’ll be conducting a live video Webcast on the subject at the Brazen Careerist website next Thursday, April 8, from 8-9 pm, covering:
- How to limit debt before it starts
- How to best deal with repaying your debts
- How to craft a "personal learning path" that is affordable, accessible, and relevant
You can sign up for it here. You can also check out my new book, DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education, for more.