Denver Seminary

Merriam-Webster defines bankruptcy as "utter failure or impoverishment." To me, utter failure is just a harsh and simple way of saying that a person has undergone a series of events so unfortunate (or strung together a series of decisions so poor) that the only remaining option is to quit and start over. In bankruptcy most debts can be discharged, including credit card debt, car loans and gambling debt (decision so poor). There is one type of debt in particular, however, that cannot be forgiven except for in the most extreme cases (e.g. permanent disability): student loan debt.

What started in the 1970's as legislature designed to protect the government and some non-profit colleges has at this point become almost impenetrable law that protects all lenders - both federal and private. Opponents often aim their arguments at bankruptcy protection for private lenders. These companies rarely offer any of the protections given to those with federal loans such as deferment or forbearance plans and income-based repayment. Graduates with high levels of private loans are often left with virtually no options if they are handed a set of life circumstances that makes repayment difficult or impossible.

Attempts to change bankruptcy policy have been consistently thwarted over the last couple decades. However, as growing concern over student debt levels begins to take a seat at the forefront of national media attention, policy changes could be in our immediate future. A variety of representatives from Congress and organizations like NACBA (National Association of Consumber Bankruptcy Attorneys) are doing their part to push bankruptcy reform.

For years, utter failure for those with high levels of student loan debt has meant just that - utter failure. The complete forgiveness of all of a person's debts regardless of any irresponsibilites that may have brought them to bankruptcy court is not something I am necessarily promoting. There are, however honest, hard-working people who run face-first into utter failure for reasons well outside of their control. Perhaps the wave of alarm over the soon-to-be-achieved $1 trillion national student loan debt will spur change in an area that seems to be in need of at least a second look.

----------------------

Article based on information reported in the article "Why Can't You Discharge Student Loans in Bankruptcy?" by Kayla Webley of TIME Magazine.