Student loan debt: Next big bubble to burst

FRESNO, Calif.

When Angel Rodriquez signed up for student loans to finance his education at UCLA, he expected to graduate with a degree from a prestigious university, live on his own and land a great job with a great salary. He said, "I expected to find an occupation in geographic information systems which would have been a nice state cushy job."

Instead, he's under-employed, living with his parents and struggling to pay off more than $100 thousand in debt.

Rodriquez said, "You have these loans that are pretty much can't be discharged in anyway no matter how dyer your situation gets."

He's not alone. According to a nationwide survey of 860 bankruptcy lawyers, 81% said potential clients with student loan debt, have increased "significantly" or "somewhat" in the past four years.

95% reported few student loan debtors have any chance of discharging what they owe through a bankruptcy proceeding because they have to prove "undue hardship" -- a standard difficult to meet.

"It's a huge problem," said Jerry Lowe. "You have a lot of not just young people, but middle age people, people going into retirement with massive amounts of debt and not enough time to pay it back."

Fresno Attorney Jerry Lowe is a member of the National Association of Consumer Bankruptcy Attorneys. He's now urging a change in bankruptcy laws to allow those burdened with debt to pay it back over an extended period of time -- and to give them the same rights as others facing bankruptcy.

Lowe said, "I think the government needs to relax the laws and at least allow for the discharge of private student loans."

While there is a bill calling on congress to do just that, until actual legislation is passed, he and Rodriquez are warning students to do their homework so they don't fall victim to debt and get in over their heads, before they can even start out in life.

Rodriquez said, "I hope that students are finding ways to become better informed."

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