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No Relief From Land’s Highest Court On Student Loan Debt

Student loan debt is one of the fastest rising debts in the country. Most college graduates leave school with overwhelming student loan debt, and in some cases very few prospects for employment that will enable them to repay that debt. If you also take into account those students that go on to earn a post-graduate degree, the amount of student loan debt is even higher. So, it comes as no surprise that given the mix of large debt and low starting salaries, there are those holding fresh degrees that are unable to repay the money it took to make it through college. For many of those graduates the only answer is bankruptcy. But it is discouraging to learn that most student loan debt is not dischargeable in bankruptcy. This means that even though a consumer may be able to eliminate high interest rate debt by seeking the protection bankruptcy has to offer, the relief may fall short when the Court decides student loan debt is not part of the debt wiped out in bankruptcy.

This issue has been a hot button topic for some time, as several students have put forth valiant efforts to obtain a ruling from the bankruptcy court that their student loan debt is no longer due. Recently, the issue made its way to the United States Supreme Court, but the Court refused to hear the case. What this means is that old tests are still in place regarding when a student loan can be discharged in bankruptcy. Generally speaking, those rules include the following:

  • Employment prospects are so bleak that it is unlikely the debtor will be able to find employment that allows even a small repayment to be made.
  • Requiring repayment will create an undue hardship on the debtor and his or her dependents such that the standard of living will be substandard.
  • This type of situation is likely to persist for an indefinite time period, with no chance of change.

It is difficult for most debtors to meet these requirements, and so many debtors find themselves owing student loan debt even when bankruptcy is filed. In order to determine if you should attempt to discharge your student loan debt, a thorough examination is needed. Call us today to learn more.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you.

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