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  • Robert Weed

Will Joe Biden Change the "Undue Hardship" Rule on Student Loans in Bankruptcy

There’s one big change Joe Biden can make (without Congress) so people who can’t afford to pay their student loans can clear them in bankruptcy.

The bankruptcy law now says student loans can be cleared only in cases of “undue hardship.” Over the years the courts have said “undue hardship” basically means paralyzed, never work again.

Recently, several news outlets have called for changes to the undue hardship rule.

But I don’t think it will go anywhere. Why? In our current political environment, support for bi-partisan cooperation often leads to defeat in the next primary.

Government lawyers, the U.S. Department of Justice, go into bankruptcy court and fight against consumers trying to prove “undue hardship.

Biden can call off those government lawyers. If the consumer, without government opposition, can persuade the judge–and that may still be tough–the consumer should win. And if the consumer wins at trial, the government should not appeal.

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