Current bankruptcy law mostly prohibits educational loans from being discharged in bankruptcy. But the White House is considering how to make it easier for student loans to be discharged in bankruptcy court, the Wall Street Journal's Josh Mitchell reports. President Barack Obama directed his administration to study whether bankruptcy should be expanded for all student loan borrowers.
Mitchell reports that only 713 lawsuits were filed to discharge student loans in bankruptcy in 2014.
Petitioners to discharge student-loan debt have to show they have an undue hardship and that they never could afford to pay their monthly loan payments. Both federal loans and private loans are nondischargeable.
Lawyer and Legal Journalist
