Student Loan Bankruptcy and the Meaning of Educational Benefit

93 American Bankruptcy Law Journal 277 (2019)

38 Pages Posted: 16 Sep 2019 Last revised: 18 Sep 2019

See all articles by Jason Iuliano

Jason Iuliano

Villanova University - School of Law

Date Written: August 1, 2019

Abstract

Unlike any other consumer debt, student loans are not dischargeable through the normal bankruptcy process. Instead, for any student loan that satisfies one of three statutory criteria, borrowers may only obtain a discharge if they prove that repayment would impose an “undue hardship.” This Article argues that courts have misinterpreted the scope of these statutory criteria. Specifically, by adopting a reading of the term “educational benefit” that conflicts with the statutory text, the legislative history, and the policy rationales underlying the Bankruptcy Code, courts have misclassified billions of dollars of student loan debt and prevented many borrowers from obtaining the financial relief to which they are entitled.

Keywords: Student Loans, Bankruptcy

Suggested Citation

Iuliano, Jason, Student Loan Bankruptcy and the Meaning of Educational Benefit (August 1, 2019). 93 American Bankruptcy Law Journal 277 (2019), Available at SSRN: https://ssrn.com/abstract=3139985

Jason Iuliano (Contact Author)

Villanova University - School of Law

299 N. Spring Mill Road
Villanova, PA 19085
United States

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