Student loans are a bit of a problem right now. Back in the day when I originally started practicing, we could actually discharge student loans if it’d been due more than six or seven years, I forget which one at this point. But it was odd the way that they counted the due dates because you couldn’t count repayments as benches things of that, but if the student loan had been due long enough then they were just simply discharged right along with all the other debt. They got rid of that now that student loans aren’t dischargeable, but lately there’s been the Second Circuit and the Tenth Circuit, the Tenth Circuit of course covers Kansas, the Eighth Circuit state of appeals covers Missouri. But those two circuits have ruled that private student loans are in fact still discharged, it’s only the government guaranteed student loans that are not automatically discharged.

To discharge a government guaranteed student loan it’s extremely difficult to do because of what we call the Brunner test, there’s a significant number of factors that have to be met in order to do that. The ones that I’ve won has almost always involved a client that has a disability or has dependents that have disabilities, something that is making it extremely difficult for them to continue to pay or to pay that loan at all. In a nutshell the bankruptcy code just refers to it as the hardship test and basically, it’s whether or not requiring the repayment of the student loan would cause an undue hardship on the debtor or the debtor’s dependents. I’ve won several of those you don’t see them litigated very often. I know I’ve got a couple of cases coming up through the pipeline here in the Eighth Circuit, the western district of Missouri on the discharge of the private student loans.

I suspect there’s probably other cases out there and the two circuits that have looked at it the Tenth and the Second have both ruled that those are discharged. And I’ve actually got one case where that’s probably gonna happen no matter what we do right now. Student loans are difficult at best. There is fortunately, I don’t know whether they will get it accomplished but there’s talk in Washington D.C. about amending the code again to make all student loans dischargeable, the government guarantee student loans dischargeable once they’ve been due more than 10 years. I would suspect they would go back and use the same calculations that they previously did in the 10-year time frame doesn’t include any repayments suspensions such as forbearances or deferments or something like that.

We might get that back, who knows with Washington the way it is right now. I don’t know if that will come through but there is some talk at least about doing that. But there’s also been a significant recognition over the last several years that these student loans are creating a massive burden on the students. I mean they’re walking out of school with debts that are just astronomical and most of them don’t really have much of a chance to pay it.