Student Debt Discharge In Bankruptcy: Movement Toward A Kinder And Gentler Approach

• Published date: 23 November 2022
• Law Firm: Cullen and Dykman
• Author: Kevin McDonough, Michael Traison, Dina Vespia and Michael Kwiatkowski

On November 17, 2022, the U.S. Department of Justice (DOJ), in coordination with the U.S. Department of Education (DOE), announced the adoption of a new policy and process for handling debtors in bankruptcy seeking to discharge federal student loan debt. See Justice Department and Department of Education Announce a Fairer and More Accessible Bankruptcy Discharge Process for Student Loan Borrowers | OPA | Department of Justice.

The announcement emphasizes a joint commitment by DOJ and DOE to creating "clearer, fairer, and more practical standards" for assessing discharge requests by student loan borrowers in bankruptcy. We discussed how the bankruptcy process works with respect to discharge of student debt in several of our prior alerts. See An Update on Student Loan Debt: Interpretation of the Statute is Critical; Another Bankruptcy Court Rules in Favor of Discharging Student Loan Debt; Student Loan Debt Discharged in...