If student debtors think the federal government will help them with loan relief, the Department of Education emphasized that they are deeply mistaken.
In a federal court case in Boston, a 65-year-old man attempting to get his student loans erased through bankruptcy has been rebuffed by the DOE in a court document, according to Bloomberg.
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Student loans can be erased in bankruptcy, but it is difficult to do so and rarely happens.
Were the court to side with empty-pocketed debtors, “the fiscal stability of the loan program” would be threatened.
Ironically, the harshness of the DOE’s stance reflects the open accessibility to federal loans. American higher education policy has made it extremely easy for any prospective student to get loans. Regardless of the school or a student’s ability to repay the debt, loans are given.
Accessibility to higher education in America makes it a rare system. In a country like France, the accessibility isn’t anywhere near the United States. The tradeoff for American policy, however, is an unmerciful attitude toward debt relief. Without a miserly approach, the program would be ripe for abuse.
Lawyers for the DOE told the court that the “debtor must specifically prove a total incapacity in the future to repay the debt for reasons not within his control” to qualify for loan forgiveness.
Reform on bankruptcy for student loans would be a welcome change in policy, but the entire premise of student loans should be changed as well. Accessibility has become less of a good than previously thought, as many students have taken on debt without earning a degree. If the federal government implemented more rigorous standards for students to access loans, fewer students would enroll, but it would prevent many from taking on heavy debt loads.
