In order to meet the rising costs of higher education, many students have no option other than availing a student loan. There are several banks and financial organizations offering educational loans to students at lower interest rates and convenient repayment terms. Moreover, repayment of student loans begins only after the student completes his/her education and gets employed, thus making them an attractive option. In case, if the student is unable to repay the loan, he/she might think of filing a bankruptcy.

According to experts, filing bankruptcy and getting rid of federal student loans is not an easy task. One needs to prove before that court that he/she was unable to repay the loan in spite of making genuine repayment efforts and that if he/she is forced by the court to make any repayments, it will be difficult to maintain even a minimal standards of living. Moreover, filing for bankruptcy reflects a poor financial situation of the borrower thereby affecting his/her credit scores to a considerable extent.

In these circumstances, there are certain ways of avoiding student loan bankruptcy. The best way is to contact the lender and discuss the problem with him. Lenders can offer feasible solutions or alternate repayment options so as to get the loan cleared with minimum hassles. Another option is to consolidate all the existing federal student loans into one student consolidation loan that is offered at low interest and flexible repayment plans. Consolidation of federal student loans in the US is administered through the Direct Loan Servicing Center under the Department of Education.