(REUTERS) — College graduates should be allowed to discharge student loans in bankruptcy, an influential bankruptcy lawyers' group recommends. And there's a renewed effort to push the change through Congress.
It's not the first time the National Association of Consumer Bankruptcy Attorneys has called for a revision to how the bankruptcy code treats student loans.
But with outstanding student loans (which altogether topped $1 trillion in 2011, according to Forbes) now eclipsing credit-card debt (about $800 billion), the lawyers' group is calling for urgent action.
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"There simply is no reason to allow private student loans to be treated differently from other types of unsecured credit," NACBA said in a report Feb. 7. "In fact, exempting these loans from discharge is likely to cause even more harm for borrowers."