Sunday, March 28, 2010

Well the SCOTUS Student Loan Bankruptcy Excitement is Over

United Student Aid Funds v. Espinosa, showed up first with some breathless headlines:

Supreme Court Rules for Student Seeking Discharge of Loan Debt shouted the ABA Journal. Actually what showed up in my e-mail alerts was: "Student Wins SCOTUS Approval for Loan Discharge." I was puzzled why that link was dead. And now I guess it may be sheer embarrassment over the exuberance of the headline. While it offers a nice link to the PDF of the full opinion, the ABA's brief summary, which may be derived from the short Associated Press article, is a bit misleading. The opinion really deals more about discharge of INTEREST on the student loans, not discharge of the loans themselves. Further, the decision is quite narrow, and revolves around requirements of a hardship determination before discharge, regardless of whether the debtor requests one or not. It is a very small bone to toss the student loan holders.


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