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Sat Jan 12, 2013, 04:12 PM

4 Out of 10 Actually Were Able to Discharge Student Loans in Bankruptcy -- But Most Never Try.

4 Out of 10 Actually Were Able to Discharge Student Loans in Bankruptcy -- But Most Never Try.

For years we've all heard the same message that it's near darn impossible to discharge student loans in bankruptcy. We've heard that the undue hardship standards make it so onerous that expecting a student loan discharge is all but an act of God. But what if that belief was actually more myth than fact?

Recently Jason Iuliano, (J.D. Harvard Law School; Ph.D. Student in Politics, Princeton University) took an empirical look at the reality of student loan discharges in bankruptcy and his results, are -- well -- shocking.

What Iuliano found was that the reality of student loan discharge in bankruptcy was that four out of 10 people that attempted to discharge their loans were successful. Granted, a 40 percent rate is not success for the majority, but it's not inconsequential either. More disturbingly he found that in just the one study year, 69,000 debtors would have been good candidates to receive some or full relief from their student loan debt but they never even tried to discharge the loans. In fact few ever try to discharge their student loans in bankruptcy. "99.9 percent of student loan debtors in bankruptcy never attempt to get a discharge," says Iuliano.

The research found that consumers who were able to successfully discharge their student loans in bankruptcy under the undue hardship standard had these three characteristics:

Less likely to be employed.
More likely to have a medical hardship.
More likely to have lower annual incomes the year before they filed for bankruptcy.

http://www.huffingtonpost.com/steve-rhode/bankruptcy-student-loans_b_2416031.html

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Reply 4 Out of 10 Actually Were Able to Discharge Student Loans in Bankruptcy -- But Most Never Try. (Original post)
Liberal_in_LA Jan 2013 OP
gtar100 Jan 2013 #1
Fumesucker Jan 2013 #3
xchrom Jan 2013 #4
Dryclean Jan 2013 #5
matt819 Jan 2013 #2

Response to Liberal_in_LA (Original post)

Sat Jan 12, 2013, 04:31 PM

1. Good to get this info out there. But I would anticipate

the bankster lobby to come out of the woodwork if this became common practice.

Why is it okay for these bankers and investors to feed on our young like this?

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Response to gtar100 (Reply #1)

Sat Jan 12, 2013, 05:32 PM

3. We are their natural prey, the young are just more tender and less wary

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Response to Fumesucker (Reply #3)

Sat Jan 12, 2013, 05:38 PM

4. Not to mention - more juicy.

Ya gotta let 'em rest before you serve them, though.

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Response to gtar100 (Reply #1)

Sat Jan 12, 2013, 06:38 PM

5. It is absolutely awful to hold kids responsible for paying back loans to predatory institutions!

 

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Response to Liberal_in_LA (Original post)

Sat Jan 12, 2013, 05:29 PM

2. That's fine, but

for many of these students, their parents signed as guarantors. So while the student may be free of the debt, his/her parents will not be.

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