Looking Into Student Loan Discharge Options - Part 2

As stated in the previous blog, Congress has covered their donors by making student loans non-dischargeable in bankruptcy unless the student/debtor can prove undue hardship. Congress has placed the burden of proving undue hardship squarely on the backs of students/debtors and not big banks which is where the burden should be. After all, the big banks and schools profit immensely off students investing loans into educations, no degrees, and worthless degrees, knowing or should knowing these students had no business a) in college to begin with, b) where in the wrong program for them because there was no testing done to begin with to see what the student’s gifts and aptitude is, and c) these students/debtors were investing far more money into these classes than they could ever recoup in a job they were likely to get.

How much of the responsibility for student loan debt belongs squarely on the same schools who admit these students and never bother to screen them for what their ultimate goals are and what their aptitude and gifts are in advance of students (mainly children) spending enormous sums of money?

At Kain & Scott we are looking into the feasibility of bringing undue hardship actions against student loan companies arguing that the repayment of these student loans will cause these students/debtors undue hardship and therefore should not be excluded from discharge in bankruptcy. Rather, student loans should also be discharged along with the student’s and debtor’s other debts.

Just because Congress has less sympathy for students and worry more about protecting their big money donor class over students, maybe bankruptcy judges will be more sympathetic to the plight of students and overwhelming student loan debt.

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