Our law firm, Phillips & Thomas LLC, was recently interviewed by Tara S. Bernard, a financial journalist at the New York Times, in relation to student loan discharge issues in bankruptcy.  The article is entitled “Discharging Student Loan Debt Is Supposed to Be Easier Than Before,” and appeared the Times on August 9, 2023. 

The article is a very thorough survey of the current state of student loan discharge litigation in bankruptcy.  The particular focus is on the Department of Education’s new “attestation form” program, which was in theory intended to streamline settlements on discharge issues involving government student loans.  While that may have been the original directive and intention, the article notes, the results “where the rubber meets the road” have been decidedly mixed:

Some consumer lawyers report that the guidelines are being implemented unevenly, making them feel as if the fate of their case depends on the government lawyer they are assigned.  Others have said they understand that the early days will be bumpy, because all parties are clumsily figuring out how the process works…A spokesman for the Education Department said that “the number of cases where borrowers will receive relief will grow as courts continue to issue final decisions.” 

In other words, debtors must continue to bring these adversary proceedings before bankruptcy judges, to ensure that they receive relief in accordance with the case law of their particular jurisdiction.  Expecting a student loan creditor to do the right thing on their own is not, and never has been, an option.  Near the end of the article, George Thomas, one of the partners at Phillips & Thomas LLC, was interviewed about one of his pending cases.  When asked about the government’s new “attestation form,” he responded:  “They are pushing the low hanging fruit through the conveyor belt, but they are not making the bold adjustments to address the problem in a comprehensive way to move the needle.” 

Fortunately, it is not the U.S. Department of Justice (or any other student loan creditor) who makes the final decision on the dischargeability of student loans.  Bankruptcy judges are the deciders, and no one else.  So if a student loan creditor refuses to offer a reasonable settlement, the debtor still can put his or her case before the judge. This is why, if you have a serious student loan problem, it is so important to speak to an attorney experienced in this type of litigation. This area is rife with unfounded rumors, misinformation, and half-truths, and so it is critical to speak to an attorney who can offer you proper guidance.