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Department of Education reviewing bankruptcy for student loan borrowers

Paying student loans for the first time? Here's what you need to know

Borrowers can’t erase their federal student loans in bankruptcy unless they can prove that repaying them would cause an “undue hardship” — a standard created, but never defined, by Congress. Instead, the courts have defined the standard. In order to have their debt discharged in most jurisdictions, those struggling borrowers must prove they can’t maintain a minimal standard of living if they pay down the debt, that the situation won’t change in the future, and that they’ve made some effort already to pay down the loan.It’s relatively rare for borrowers to even attempt to have their loans discharged in bankruptcy. That’s in part because they may struggle to afford a lawyer. But the government may also take a tough approach...

Read the entire piece at MarketWatch...


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