Should Student Loans be Dischargeable in Bankruptcy ?

[handmade34]

53. there was abuse in the 70's

"...Basically, in the 1970s student loan bankruptcy gained magnetism. Students used to go for student loan bankruptcy filing just after they finished their highly expensive education. They wanted to get rid of any student loans on their name before entering practical life. Nowadays it does not work any more because the conditions were changed in 1998 for the whole process..."

"...Back in the 1970s, many students, having secured employment after graduation, found loopholes in the U.S. Bankruptcy laws that allowed them to declare for bankruptcy and have their student loans discharged. Congress made changes in bankruptcy law for student loans in the late 1990s in order to stop people from taking advantage of this flaw in the bankruptcy code. What the changes did, however, was to make discharging student loans almost impossible, creating difficult situations for people already saddled with other debts..."


I am no fan of the current laws and we desperately need changes but there is some background for the earliest changes in the bankruptcy/student loan laws

The Obama Administration has allowed for more humane payment plans but there are still many lives that are forever changed, often ruined, because of student loans