Even after bankruptcy, trapped by student debt
"The trap of student debt — even bankruptcy offers no path out under current law'
The misfortunes that brought schoolteachers Devin and Sarah Stang and their four young children to bankruptcy — and the loss of their house and a car in the process — were their own unique story.
They bought the house at just the wrong time. There were heavy medical expenses when, at five months pregnant, she delivered stillborn twins. And their money woes go back further: When Sarah's college softball team pressured her to drop classes she wanted to take, she quit, lost her scholarship and had to make up the difference with loans. Devin, too, borrowed to get a master's degree. Then they struggled amid school layoffs near their Sandusky, Ohio, home.
Now, the Stangs just want a truly clean slate, financially. But even the ordeal of bankruptcy won't give it to them, and the reason is a common one: Much of their debt comes from private student loans.
Virtually any other kind of debt — including medical bills, mortgage, credit cards and car loans, even gambling losses— can be discharged in bankruptcy, allowing the "honest but unlucky" a chance to restore their footing through an arduous restructuring overseen by a court.
But under a 2005 law passed by Congress to protect lenders, private student loans fall under the same nearly-impossible-to-clear category as child support payments and criminal fines.