"For decades, student-loan borrowers seeking relief through bankruptcy rarely succeeded. However, 2022 guidance implemented by former President Joe Biden eased the process by establishing clearer, more streamlined guidelines for borrowers. The changes have allowedthe bankruptcy process to move more quickly. President Donald Trump's administration has retained the guidance, and a recent study by Jason Iuliano, a law professor at the University of Utah, showed that it's working for borrowers."
"Iuliano found that success rates for student-loan borrowers seeking bankruptcy have reached 87% since Biden's guidance was implemented, and of those borrowers, 97% of their student-loan balances were eliminated. Still, bankruptcy filings remain "remarkably low," Iuliano wrote. The reforms led to about 350 additional bankruptcy cases following the new guidance, Iuliano said. With over 40 million borrowers holding student debt and 5 million of them in default, the increase in cases is quite small."
2022 guidance eased and clarified the bankruptcy pathway for student-loan borrowers and shortened processing times. Success rates for borrowers pursuing bankruptcy have risen to about 87% since the guidance, and roughly 97% of those borrowers' student-loan balances were eliminated. The reforms generated roughly 350 additional adversary proceedings, a very small increase compared with more than 40 million borrowers and about 5 million in default. Bankruptcy filings seeking student-loan discharge remain remarkably low due to limited awareness and many attorneys' belief that the remedy does not work. The guidance was retained by the subsequent administration.
Read at Business Insider
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