The Problem With Student Loan Debt

I am seeing an increasing problem with student loan debt in my bankruptcy practice. I have run across individuals with over $100,000.00 in student loan debt, and the payments can be upwards of $1,000.00 per month. This leads a lot of people to ask me if bankruptcy can help with the student loan debt, and unfortunately in most cases bankruptcy does not help. The law is skewed against individuals being able to discharge their student loan debt in bankruptcy. A common standard th courts employ when determining whether to discharge student loan debt is an “undue hardship” standard.
The problem is not just the standard the courts employ to determine if you can get rid of student loan debt, you also need to consider the cost of legal representation to get rid of the debt. In some cases the student loan lenders force the debtor into a trial in bankruptcy court, then appeal any adverse rulings to higher courts. In most cases people who have student loan debt cannot afford the legal representation necessary to get rid of student loan debt.
Congress should pass common sense reform allowing people to discharge at least some of their private and government subsidized student loans. A system should be set up that allows people who have paid on their student loan debts for a certain amount of time to discharge those debts in bankruptcy, so they are truly able to get a fresh start out of bankruptcy. It would be a shame if people did not pursue an education out of fear of student loans that never go away.