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Student loans are now easier to discharge in bankruptcy, attorneys say: It’s ‘life changing

Updated: Apr 22

The Biden administration’s new student loan bankruptcy policy is making it easier for borrowers to walk away from their debt in court, attorneys say.

“We have gotten forgiveness for a number of clients under the new bankruptcy changes,” said Malissa Giles, a consumer bankruptcy lawyer in Virginia. “The discharge is life changing for them and their families.”

In the fall of 2022, the U.S. Department of Education and the U.S. Department of Justice jointly released updated bankruptcy guidelines aimed at making the

process for student loan borrowers less arduous.

Previously, it was difficult, if not impossible, for most people to part with their education debt in a normal bankruptcy proceeding.

Amid concerns that students would rack up debts for their education and then try to ditch their obligations, policymakers over the years had added extra stipulations for the discharge of student loans in bankruptcy. Borrowers needed to prove “undue hardship,” or a “certainty of hopelessness,” and government lawyers battled most of the requests.


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