Department of Education to relax standard for Student Loan discharge in Bankruptcy.
A recent press release indicates that the Department of Education is going to make it a lot easier for people who have, or will, file bankruptcy, in order to get rid of their student loans. Exactly how this process will rollout, is something that will be developed in the coming days and weeks. from what I can understand, an adversary proceeding to discharge student loans is simply not likely to prompt a fierce objection from the government as long as certain criteria are met (which hopefully will be no more onerous than the criteria for qualifying for a Chapter 7 or 13 discharge in the first place), and courts will simply rubber stamps these by default.
This coincides nicely with the end of the COVID forbearance for student loans, and rather than being a handout for anybody who used federal dollars to obtain an education, the means testing of the bankruptcy system should qualify people and justify reasonable results in most cases, at least involving federal loans. Stay tuned for more details.