The Trump administration is cracking down on Americans with student loan debt. The Department of Education denied 327,955 income-driven repayment applications in August, leaving borrowers facing higher payments or forbearance. Wage garnishment for defaulters could resume in January, affecting millions. Bankruptcy, once considered impossible for student loans, now discharges debts 87% of the time.

Financial pressure on borrowers is mounting, with 42% forced to choose between loan payments and necessities. While the Biden administration canceled $183.6 billion for 5 million borrowers, broader forgiveness efforts are stalled. A small but growing number are finding relief through bankruptcy, like Amy Howdyshell, who had $78,000 discharged. Yet, bankruptcy can significantly damage credit, making it a tradeoff to consider carefully.

The student loan system is increasingly unstable, causing anxiety among borrowers. Bankruptcy is gaining traction as a relief option, with more borrowers exploring it, especially those nearing retirement. While bankruptcy can hurt credit scores by up to 200 points, its impact varies depending on individual circumstances. Experts advise considering all options before pursuing bankruptcy, including seeking guidance from experienced professionals.

Read more at Yahoo Finance: As Trump takes 2 hard swings at Americans with student loan debt, some are discovering a surprising way out