This may sound like advice coming from a broken record, but in case you are somehow still unaware of this very important fact, you generally cannot discharge your law school loan debt in bankruptcy. Sure, there’s an “undue hardship” exception to this steadfast rule, but it’s a difficult standard to meet.
The government will go to the ends of the earth to prove that you are capable of paying back what you owe and just unwilling to do so. To be frank, you’d probably be better off becoming totally and permanently disabled or dying, because then you or your estate would only have the ensuing tax nightmare to deal with.
Judges know that the burden of “undue hardship” is a difficult one to prove, and most of them probably think that it’s a load of crap. Unfortunately, most of them are unwilling to say so. But not this Oregon judge — she launched into a pointed, four-page critique of legal education, while ruling on a law school debtor’s attempt to discharge his student loans in bankruptcy.
No, she won’t grant you a discharge, but that doesn’t mean she has to like it. You know it’s going to be good when a judge cites to Above the Law while discussing student loans….
In an extraordinary March 5 opinion, Aiken departed from the particulars of a student debt collections case to rip the U.S. higher education system in general and the nation’s law schools specifically for burdening a generation of graduates with oppressive debt.
“Students with advanced degrees, specifically juris doctorates, are facing a quagmire,” Aiken wrote. “Attending law school was a guaranteed way to ensure financial stability. For current graduates, however, this is no longer true, due in large part to the high cost of law school tuition.”
Ahh, law school debt and rising tuition rates. Those are things that we’re very familiar with at Above the Law, which is probably why the good judge cited to one of Elie Mystal’s posts on the student loan racket in footnote 7 of her opinion. (Perhaps Her Honor, or her clerk, is an avid reader of ATL?)
Here’s just one of the many key excerpts from this delicious judicial diva’s powerful indictment of debt:
Yes, you read that correctly: in two decades, the cost of law school tuition increased 317 percent. This staggering increase — or, more precisely, a lack of awareness about it — is probably what led the outgoing ABA president to utter an incredibly out-of-touch humble brag about how he sold his Corvair for $330 to pay for his first semester at law school (including his books). These days, that’s chump change for anyone who’s enrolled in law school. If you even tried to pay off a semester’s worth of tuition with a mere $330, the bursar would probably mutter a cynical, Taken-esque “Good luck.”
So while tuition increased by epic proportions, the availability of job opportunities for recent graduates did not:
On the whole, Chief Judge Aiken recognizes that most law school graduates are carrying an “unmanageable amount of debt,” and found it important to provide this backdrop when writing an opinion on a hopeless law school graduate’s attempts to discharge his loan debt. Here’s how the judge chose to end her discussion:
[T]he student loan issue is one that extends beyond the outcome of this decision and will continue unabated until it is addressed at a systemic level.
No offense, Your Honor, but you’ll be waiting a long time for any change to come. In the meantime, you can catch the most-receptive audience for your arguments on the flip side of a 25-year IBR repayment period.
If you want to read the rest of Chief Judge Aiken’s analysis, found on pages 7 to 11 of her opinion, click through to the next page….