A judge stripped a veteran's $221,000 in student loan forgiveness, and it shows how hard the law makes it to get rid of student debt
with the student-loan company and revoked Rosenberg's loan forgiveness last month because he did not prove why his loans from college and law school created"undue hardship," saying Rosenberg must go back to bankruptcy court and reevaluate the case.After his loans were first forgiven, RosenbergYahoo Finance that it's"really insane" that borrowers cannot discharge their debt through bankruptcy when"executives get golden parachutes" for making mistakes.
That notion is something advocates and lawmakers have been stressing as a reason to make student loan discharge through bankruptcy a more accessible method for borrowers. Insiderin August that Senate Majority Whip Dick Durbin and Sen. John Cornyn of Texas introduced the FRESH START Through Bankruptcy Act of 2021, which would allow borrowers to seek a bankruptcy discharge of their federal student loans after 10 years.
The bill would seek to eliminate the requirement of proving"undue hardship," which would significantly increase student debtors' chance of getting loan forgiveness.."Our bipartisan bill finally gives student borrowers — some who were misled into taking out costly loans by predatory for-profit colleges — a chance to get back on their feet when they have no other realistic path to repay their loans," he added.
While veterans like Rosenberg had the option to seek loan forgiveness through the Public Service Loan Forgiveness program, which forgives student debt for public servants after ten years, the program had a 98% denial rate prior to major reforms"Undue hardship should not be the only path to address student loans in bankruptcy," Durbin said in an August hearing."There should be another option.
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