One researcher unearthed that of over 230,000 student-loan borrowers whom filed bankruptcy in 2007, under 450 — less than 0.2 % — also attempted to discharge their education loans.
Presidential candidate Beto O’Rourke simply proposed a debt-forgiveness that is large-scale to aid deal with the situation. Fellow prospects Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) already offer programs that are such. But such relief comes, if at all, following the election that is presidential. For the time being, bankruptcy must certanly be a far more option that is readily available undoubtedly overwhelmed borrowers.
The bills would expel a requirement that is applicable to student education loans rather than to any other types of financial obligation: to have a release, the student-loan debtor must undertake the intimidating task of suing the creditor within the bankruptcy and proving that repayment would result in the borrower “undue hardship.”
The undue-hardship requirement undercuts the basic purposes of the student loan programs: equal access to higher education, benefiting society through educating the population, and helping students by severely restricting bankruptcy relief.