Possible Changes Coming to Bankruptcy Policy for Student Loans

It is no secret that millions of college graduates are struggling to pay back their student debt. In many cases, when someone is struggling with debt and has no way to pay it back, they can file for bankruptcy. However, this is not the case when it comes to student loans, as debtors can typically not get rid of student debt through bankruptcy. That being said, if a debtor may be able to have their student loans discharged if they can prove that they are causing undue hardship. Currently, the standard of what is considered undue hardship is very, very high, which makes it difficult for debtors to seek relief.

This week, the United States Department of Education announced that they are going to seek public comment on which factors they should take into consideration when determining what should be considered undue hardship. In the memo, the Department of Education stated it is also requesting public comment on other factors that include:

  • How much weight should be given to the factors that are considered undue hardship
  • Whether requiring two evaluations of undue hardship results in inequities who are seeking debts to be discharged
  • How all of the above factors along with other considerations should be considered in determining undue hardship claims

Those who do wish to submit commentary must do so by May 22, 2018. It will be interesting to see whether this results in changes to bankruptcy for student debt.

If you require the services of an experienced bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq.today to schedule a consultation and discuss your options.