Drowning in student debt is like being underwater on your mortgage, but there's nothing like foreclosure for student loans

• Homeowners can exit bad mortgages through foreclosure, but there's no similar option for student debt.
• Josh Mitchell's "The Debt Trap" explains how educational debt and homeownership debt differ.
• Borrowers can get out of student debt through bankruptcy, but doing so is very difficult and rare.

Attaining a higher education and owning a home are both pillars of the American Dream, and both often require going into debt.

But there's a huge difference between the two: for debt that accompanies education, there's usually no way out.

According to the new book "The Debt Trap," by The Wall Street Journal's Josh Mitchell, expanding homeownership and education were major priorities of most 20th-century presidents who were seeking to update the American Dream.

As those opportunities increased, so did debt - mortgage debt for homeownership and student debt for education. People had to borrow money from banks to make the American Dream happen, but borrowing for homes and borrowing for education had massively different impacts.

"With mortgages, borrowers eventually had a way out- foreclosure," Mitchell wrote. "Americans with student loans have no such option."

Debt linked to homeownership

President Bill Clinton announced the National Homeownership Strategy in 1995, seeking to make "homeownership a reality for all Americans," per a 1999 press release. This was largely realized through mortgages secured by entities such as Fannie Mae and Freddie Mac - government-funded entities that ensured banks could lend to poor and middle-class Americans.

But as homeownership grew, so did debt, and if people fell too far behind on their mortgage payments, they could get out of their debt through foreclosure, which is when the mortgage lender takes back the property.

There was a foreclosure crisis as recently as 2008, an after-effect of low interest rates coupled with pro-housing policies that led to a surge in homebuying without adequate checks on whether borrowers could actually pay off their mortgages. Foreclosures were up 81% from 2007 to 2008, and a total of 861,664 families lost their homes during that time.

Insider reported in May that mortgage debt is most Americans' largest debt, with the average American holding $36,730 in debt from mortgages. Insider's Hillary Hoffower reported that mortgages are the biggest source of debt for millennials, as well.

But foreclosure remains an option to get out of that debt, with the major cost of losing a home.

Debt linked to education

There's a $1.7 trillion student debt crisis in the country, and the student-loan system has no equivalent to foreclosure.

The only option borrowers have to discharge their debt, aside from the longshot that it gets canceled, is through bankruptcy, which, as Insider reported, is very rare to achieve.

Borrowers who want to get rid of their debt through bankruptcy must prove "undue hardship," which is a difficult standard to prove. Filing a lawsuit against a student-loan company can also be expensive and lengthy, and the company usually has more resources than the borrower, lowering the chances the borrower has in succeeding.

Mitchell explained how, after President Lyndon B. Johnson passed the Higher Education Act of 1965, banks began raising interest rates on student loans, and the system came to profit lenders at the expense of pushing more and more borrowers further into debt and default.

The average American with debt owes near $29,000 in student debt, but due to rising interest rates and lack of communication from student-loan servicers, many borrowers have accumulated debt loads over $100,000 that they believe will follow them to their graves.

"It really is a debtor's prison," David Wise, a 59-year-old with $236,485 of student debt, previously told Insider.

Many Democrats are pushing for President Joe Biden to cancel $50,000 in student debt for every borrower to lift the burden impacting 45 million Americans.

"We must fix this broken system, and President Biden must #CancelStudentDebt," Sen. Elizabeth Warren wrote on Twitter.