• Henry Park

Hope for those with a mountain of student loan debt

Student loan debt hit $1.41 trillion in 2019 (see Investopedia link). The average loan debt per borrower hit $35,359 in 2018. The average loan debt however masks the amount of debt carried by borrowers seeking graduate degrees.

You would assume student loan debt would be frequently challenged for discharge in bankruptcy. But, it is not because there is a myth that student loan debt is nearly impossible to discharge.


Mr. Rosenberg borrowed money to attend undergraduate school and law school. After graduating from law school, his loan debt was $116,464.00. Fourteen year later, his loan debt has grown to $221,385.00. Mr. Rosenberg filed for bankruptcy to discharge his $221,385.00 of student loan debt (In re Rosenberg, Case No. 18-35379, Bankruptcy Ct. SDNY, Jan 7, 2020). The Court examined the three part Brunner test (Brunner v. NYS Higher Educ. Servs. Corp., 831 F.2d 395, 396 (2d Cir. 1987))

(1) that the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.

and determined that the test itself is not punitive but that cases interpreting the test were punitive (Opinion at 5-6). Applying the test to Mr. Rosenberg's situation, the Court found that he had satisfied the Brunner test and discharged his student loans.


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