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Student Loan Forgiveness Provides Relief
44.7 million Americans carry student loan debt totaling $1.56 trillion, second only to mortgage debt. The average student loan payment for borrowers 20 to 30 years old is $393 per month. Student loan forgiveness would provide relief to these distressed borrowers.
In the last quarter of 2018, U.S. student loan delinquencies reached a record of $166 billion, an all time high. For many borrowers, even income-based repayment presents significant challenges to maintaining sustainable payment amounts on their student loans. Student loan forgiveness would provide relief to these distressed borrowers.
Student loans are generally nondischargeable in bankruptcy
Only in rare cases are student loans allowed to be discharged in bankruptcy. That’s because, since 1976, Congress has steadily chipped away at the bankruptcy discharge for student loans. Now, student loans can be discharged in bankruptcy only if the debtor can demonstrate undue hardship, which is a very difficult standard to prove.
There exists no compelling rationale to treat student loans differently than other types of student loan debt.
Unemployment, underemployment, disability, divorce, or the death of a spouse can all lead to a persistent or even permanent inability to repay student loans. Millions of Americans struggle to make the minimum payments on these loans, often without ever making a dent in their debt.
Student loan forgiveness
The political establishment appears finally to be taking notice.
On June 2019, Senator Elizabeth Warren (D-MA) and Representative James E. Clyburn (D-SC) announced bicameral legislation to provide student loan forgiveness to 95 percent of borrowers, or more than 42 million Americans. The law would completely cancel student loan debt for more than 75 percent of Americans with student loan debt.
Also in June 2019, Senator Bernie Sanders (D-VT) has proposed legislation to completely eliminate the student loan debt of every American. Under Sanders’ plan, all student debt of any kind would be canceled if the legislation is passed into law.
In addition, currently under consideration in Congress are H.R. 770 Discharge Student Loans in Bankruptcy Act of 2019, which would allow the discharge of both federal and private student loans in bankruptcy.
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Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
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Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
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Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
