Debt Slavery And Student Loans On Our Mind

05 Jan Debt Slavery And Student Loans On Our Mind

It seems that debt slavery is on the minds of many right now and bankruptcy is little or no help. My recent article on Bankruptcy Law Network was picked up by another legal commentator, Chuck Newton, in his article Is Debt Enslaving You? Chuck, a lawyer himself, has a daughter in law school. He talks about the high cost of a legal education and relates this to his own daughter’s legal education. By the way, Chuck Newton is also married to a lawyer. It seems that even a two lawyer family has its financial limitations.

The cost of a legal education is no joke. According to a 2006 National Law Journal article on the cost of a legal education, as quoted on the website, 80% of law students need to borrow to complete their legal education. The average private law school graduate owes $76,763 and public law school graduates owe $48,910 when they graduate.

Student loans are now a trillion dollar problem. The amount of student loan debt exceeds all other catagory of consumer debt. It is also growing rapidly. With declining state support for public universities and rapidlyincreasing costs for higher education, there is no end in sight for this 21st century form of indenture slavery. Now that private student loans have been granted protection from bankruptcy discharge, giant banks have moved in and are marketing their loans to prospective students and their parents.

Bankruptcy discharge of student loans, public or private, is severely limited by the restrictive but widely adopted statutory interpretation referred to as “The Brunner Test”. Based on the nearly 30 year old opinion found in Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 [2d Cir. 1987], courts regularly find creative ways to deny bankruptcy discharge of student loan debt.

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I was admitted to practice in 1978. I am certified as a Consumer Bankruptcy Specialist by the American Board of Certification. I regularly speak on tax and bankruptcy issues at state, regional and national conferences. Years of experience in practice before the Internal Revenue Service and Oregon Department of Revenue have given me the background to resolve a large variety of consumer tax issues.
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