New Criteria for Discharging Student Loans in Bankruptcy

According to a publication of National Association of Student Loan Administrators “NASFAA” the options for students and guarantors of student loans to discharge those loans are slowing expanding.  Only time will tell how this will play out for students and guarantors.
GEN-15-13: Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings  Publication Date: July 7, 2015

DCL ID:
GEN-15-13

Subject: Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings
Summary: This letter provides guidance to guarantors and educational institutions participating in the Federal Family Education Loan Program (FFELP) and Federal Perkins Loan Program (Perkins), hereinafter “holder[s],” as they continue to implement U.S. Department of Education (Department or Education) regulations (at 34 C.F.R. § 682.402(i)(1)(ii) & (iii)) (FFELP) and 34 C.F.R. § 674.49(c)(Perkins)), which govern their actions in defending bankruptcy adversary proceedings seeking discharge of student loans authorized by Title IV of the Higher Education Act of 1965, as amended (hereinafter Title IV), on the basis that excepting the loans from discharge would impose undue hardship upon the borrowers.
For more information, please see the attached PDF file for Dear Colleague Letter GEN-15-13.
Attachments/Enclosures:
GEN-15-13: Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings in PDF Format, 2MB, 23 Pages

The post New Criteria for Discharging Student Loans in Bankruptcy appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.