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How To Fix The Bankruptcy System For Student Loan Borrowers - MarketWatch

Student loan borrowers looking to get a fresh start in bankruptcy have little hope.  That’s the overwhelming sentiment in more than 400 comments submitted this week to the Department of Education. The comments came in response to a request from the Department earlier this year for input on what loan holders should consider when evaluating a borrower’s request to have their student loans discharged in bankruptcy.  It’s difficult to wipe away a student loan in bankruptcy. Borrowers have to prove that paying down the debt would create “an undue hardship,” a notoriously hard standard to meet. Historically, the government has fought borrowers with federal loans aggressively in court as they try to prove their finances are so hopeless that they’ll never be able to pay down their student debt.

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