By LaKeshia N. Myers
I am one of 3.2 million Americans who has student loan debt in excess of $100,000. While the Biden Administration has worked tirelessly strengthening loan forgiveness programs and cutting the red tape that exists for borrowers to prove eligibility, I have continued to pay close attention and listen intently whenever I hear anything pertaining to student debt relief. Which is why I was pleasantly surprised to hear that the U.S. Department of Education told Congress last year it was revising a restrictive bankruptcy policy for federal student loans.
It is a well-known fact that it is virtually impossible to discharge student loan debt, even when filing bankruptcy. Discharging education debt through bankruptcy is difficult. One must file a separate lawsuit, known as an adversary proceeding, and convince the court that the debt would impose an “undue hardship” and fend off the lender from thwarting their effort (Douglas-Gabriel, 2022). Members of Congress who have worked to cancel all or portions of student debt welcomed the change in policy, but were stunned when they learned of several ongoing cases that are still “pending” review under the more restrictive bankruptcy policies.
According to Danielle Douglas-Gabriel of the Washington Post, “Now the Biden administration is facing pressure from Senate Democrats to change how it handles those requests. Their concerns follow a case that sparked a public backlash after the department tried to fight the court-approved discharge of debt held by a man suffering from epilepsy; the department dropped the appeal in February, but a group of senators say the case was an exception to the standard practice” (Douglas-Gabriel, 2022). I say, what’s good for the goose is good for the gander—there must be reform in the standard operating procedures for discharging student loan debt.
While the Education Department, as the creditor for $1.6 trillion in federal student loans, has the right to contest a bankruptcy discharge to maintain the fiscal integrity of the lending program, I believe they should be viewed like any other debt collector. The court should take into consideration the totality of all circumstances for debtors. I can only hope negotiations go well between the department, members of congress, and the administration. Those of us who owe substantial amounts of student debt eagerly await concrete decisions.