the pandemic’s impact on student loan debt
crisis
the pandemic’s impact on student loan debT
IT’S TIME TO CHANGE THE BANKRUPTCY CODE
The issue of student loan bankruptcy is even more pressing given the impact of the COVID-19 pandemic. Millions are out of work and countless businesses will be unable to survive. All of our lives have been upended by this worldwide emergency but some of us will need more help to get back on our feet than others. After-all, isn’t the point of bankruptcy to give a second chance to fellow Americans that have been knocked down?
Though the stimulus package passed by Congress will help in the short term it is merely and attempt at first aid, an attempt to stop the bleeding. The recovery will take much longer and will only succeed if we realize we are all in this together and help each other out. I ask you to consider why someone that incurs a huge amount of medical debt due to the pandemic will be able to declare bankruptcy simply by filing for Chapter 7 but someone that loses their business as a result of the pandemic, and is saddled with a huge amount of student loan debt, cannot?
We need a fair process that does away with the myth that student loan debt is somehow distinguishable in bankruptcy from other debts. We need to do away with the extra barriers that apply only to student loan debtors. Currently, those seeking to discharge student loan debt in bankruptcy must go through the Chapter 7 process just like every other debtor, but then must file an adversary proceeding which is essentially a civil lawsuit that can drag on for years. Requiring those being crushed by insurmountable debt to pay a $20-40,000 in legal fees or to learn how to conduct a federal lawsuit on their own accomplishes nothing other than to establish a new class of indentured servants.
If Congress cannot find the courage to discharge student loan debt in total it should at least provide a path towards a second chance at life and allow student loan debt to be discharged in the same manner as consumer debt such as credit cards, car loans, and mortgages.