More student loan borrowers are filing for bankruptcy to offload debt

(FOX BUSINESS) – A growing number of Americans are filing for bankruptcy in order to offload their student loan debt after a three-year payment hiatus.

The Department of Justice said in a news release published Thursday that 632 borrowers filed to use bankruptcy in order to eliminate student loans in the period from November through September, an increase from earlier levels. By comparison, the pre-pandemic average annual rate was about 480.

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The spike is "significant" because there has been a pandemic-era freeze on federal student loan payments in place since March 2020. But that pause officially ended at the beginning of October, setting up a potential financial shock for millions of Americans.

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