Private Student Loan Bankruptcy Discharge

Private Student Loan Bankruptcy Discharges

Is it possible to get rid of your student loan debt by filing for bankruptcy? Absolutely!

In fact, there’s never been a better time to attempt it, because in 2017, it’s easier than ever before to wipe out your debt with a Chapter 7 or Chapter 13 bankruptcy proceeding.

There’s only one caveat: getting approval for a student loan bankruptcy discharge requires proving that your student loan debt is causing an “undue hardship” on you, meaning that it’s making it difficult for you to afford basic necessities (like food, housing, medical care, etc.).

This page explains the student loan bankruptcy discharge process in detail, walking you through the different types of Bankruptcies (Chapter 7 vs. Chapter 13), explaining what an “undue hardship” test entails, and offering advice on how to figure out if you have a real chance at getting approved to have your loans discharged.

But Before We Go Through All That…

Dealing with student loan debt isn’t easy, and it becomes increasingly difficult when you’re looking into bankruptcy proceedings and bankruptcy discharges.

To streamline the research process, and to get a quicker idea of whether or not you really have a shot at qualifying for a bankruptcy discharge, I recommend calling the experts at the Private Student Loan Relief Helpline.

Calling the Helpline is free, and they offer no-cost consultations, so what I would suggest you do is call the Helpline, tell them about your specific financial situation, explain the details of your outstanding debt, and ask them if you’ve got a realistic chance at qualifying for a bankruptcy discharge.

The Helpline is great because even if you don’t seem to qualify for a discharge via bankruptcy, they can suggest other opportunities like challenging the validity of your loans (via the Defense Against Repayment Provision), consolidating your debt, and doing other things that’ll reduce your financial liabilities.

Keep in mind that the Helpline will pitch paid services to you (they can help with research, completing paperwork, finding an attorney, filing forms and documents, etc.), but that you can do all of this stuff entirely on your own, if you have the time for it (and are willing to risk getting things wrong).

To contact the Private Student Loan Relief Helpline, call 1-866-530-9946..

What’s Changed in 2017?

2016 was a huge year for student loan bankruptcy laws, in that several large court cases were settled favorably for the person attempting to discharge their student loan debt.

This set a precedent that made it far more likely that future cases would be handled in similar fashion, meaning that you have definitely got a shot at getting your loans discharged.

There are many signs that things are headed in the right direction, and Donald Trump’s presidential victory is another indication that change is in the works, and that we may end up getting some bankruptcy reform (after all, he’s used Bankruptcy several times… there’s literally no one more likely than him to understand why it’s so important!).

With that said, let’s get into the technical details of the student loan bankruptcy process.

Can You File Bankruptcy on Private Student Loans?

Yes, you absolutely can.

In fact, it’s never been easier to file bankruptcy on private student loan debt, and the bankruptcy process is literally the only way I know of that allows you to get your private loans entirely forgiven (discharged, wiped out, erased!).

Winning a private student loan discharge does require going to court, and it is also likely to require the assistance of an attorney, but it’s certainly possible to fight, and win a discharge, especially if you’re well prepared.

How Does Private Student Loan Bankruptcy Work?

During the bankruptcy process, you’ll need to issue a formal complaint arguing that your student loan debt is placing an “undue hardship” on your life, preventing you from being able to provide basic life needs for yourself and/or your dependents.

It’s tough to receive an undue hardship discharge for certain types of private students loans, but it’s exceptionally easy for others!

The difficulty is determined by the type of school you attended, the specific school where you received your education, the type of educational program you borrowed money to attend, and your specific financial situation (this is the biggie, as you have to be able to prove that your loans are making it difficult for you to afford basic necessities).

Here are the types of private student loans that are typically easy to discharge via filing for bankruptcy:

  • Private student loans taken out to attend a school that is not on the Department of Education’s list of “eligible educational institutions” (explained below in the section called “Am I Likely to Receive Approval for Discharge?”)
  • Private student loans that were provided by large, national lenders, like well-known banks or other massive financial institutions
  • Private student loans that are being serviced by Navient, who was recently sued by the Federal Government for all sorts of nefarious activity, leading to the creation of the Navient Student Loan Forgiveness Program.
  • Private student loans that were issued for education that isn’t offered at traditional four year colleges and universities, such as technical training programs, vocational training programs, truck driving schools, IT training courses, coaching classes, mechanic schools, cooking schools and beauty schools

Keep in mind too that even if you don’t qualify for a full discharge, you may end up being eligible for having some percentage of your private student loan debt erased during bankruptcy proceedings.

The relationship between bankruptcy and private student loans is definitely complicated, but this article should help you figure out just how to take advantage of the available opportunities.

Discharging Private Student Loan Debt Via Bankruptcy

Getting your private student loans discharged during bankruptcy proceedings doesn’t happen automatically, as it’s not part of the basic bankruptcy process.

To receive a discharge for your debt, you’ll need to file a petition (called an “adversary proceeding”) that requests a court judgment (called a “determination”) on whether or not you will receive approval for having your private student loan debt discharged.

After filing the petition, you’ll have to prove to the court that paying off your loan “will impose an undue hardship on your and your dependents.

The basic idea here is that the court has to agree that your loans are destroying your life by making it virtually impossible for you to provide food, shelter and other basic needs for yourself and/or your family.

This isn’t an easy to thing to do, even if your loans really are causing you serious financial hardship, especially because different courts use different “tests” to determine whether or not you’re truly facing an “undue hardship”.

Which Undue Hardship Test Will You Face?

We can’t answer that question with any shred of accuracy, and to get an accurate answer, we’d recommend that you consult with a local bankruptcy attorney.

Courts in different parts of the country use different tests, but it appears to be up to the judge’s discretion (at least in some cases) on how this stuff is handled.

And to add to the confusion, some courts take the test as an all or nothing deal where you either qualify for having your entire loan discharged or fail to qualify for having any of it discharged, while others will allow you to discharge some portion of your loan depending on the results of the test.

However, to help give you an idea of what you’ll be facing when trying to get approval for an undue hardship discharge, here’s a breakdown of the most common undue hardship tests in use today:

The Brunner Test

The Brunner test for undue hardship allows you to discharge student loans in bankruptcy proceedings if, and only if, you meet all three of the following conditions:

  • Poverty – If you are forced to repay your private student loans, your current income and expenses will not allow you to maintain a minimal standard of living for yourself and your dependents
  • Persistence – Your current financial situation (really, the problems relating to it) is likely to remain consistent for a significant part of the remaining repayment schedule
  • Good Faith – You have previously made a good faith effort to repay your private student loans by making spending changes

How do you satisfy these conditions?

You’re having trouble paying rent, keeping the lights on and putting food on the table, but you haven’t been taking annual family vacations, you aren’t driving new vehicles, you didn’t recently buy a house, your apartment isn’t furnished with high-quality electronics and you don’t have the latest iPhone in your pocket.

You actually need to live, and look like someone who is living at, near or below the poverty line. If you can’t afford to pay off your private student loans because you blew all the money for them on personal possessions, luxury expenses, or comic books, then you won’t be able to get the debt discharged in bankruptcy when the court applies the Brunner test.

The Johnson Test

The Johnson Test for undue hardship is pretty similar to the Brunner test in that it tries to assess whether or not your private student loan debt will destroy your ability to maintain a minimal standard of living, but it’s more comprehensive than the Brunner test.

This test evaluations the following factors:

  • Employment & Income – This test will evluation your current employment and income, along with your future prospects, comparing them to the Federal poverty line to determine where you fall on the spectrum
  • Education – Your level of education, the effect it has had on your ability to generate income, and the effect it will have on your ability to generate income in the future
  • Health – Your ability to stay healthy and remain in the workforce. This part of the test is especially helpful to those with chronic diseases or life-threatening conditions likely to reduce their ability to continue earning an income
  • Dependents – Essentially, your expenses. This test makes it easier for those with more dependents to have their private student loans discharged, since dependents are seen as a serious burden
  • Good Faith Efforts – Your previous attempts to pay off the debt. This attempts to find out if your current financial situation was caused through irresponsible or negligent behavior by evaluating your attempts to maximizing income and minimize expenses

How do you satisfy these conditions?

Just like the Brunner test – you’d better look like you’ve tried to pay off your debt, minimize expenses and reduce the amount of money that you “wasted” on inessentials. If you’ve got a lot of cool stuff, took some vacations or remodeled your house, then you’re probably out of luck.

The Totality of Circumstances Test

In our opinion, this seems like the most fair test of the bunch, since it purports to consider situations on a case-by-case basis.

The Totality of Circumstances Test seems more likely to want to help you win approval for winning private student loan bankruptcy discharge.

This test seeks to evaluate whether or not you have the ability to repay your debt based on the following conditions:

  • Your Past, Present & Future Financial Resources – How much money have you been making? How much are you making now, and what will you be making in the future? Will it be enough to provide for that minimal standard of living?
  • Your Reasonable Living Expenses – Based on the number of dependents you have, what is a reasonable estimate for your actual living expenses? How much money do you really need to get by? And will the private student loan prevent you from doing that?
  • The Duration of The Hardship – How much longer will you have to work to pay off the loan? Are you temporarily, or even permanently disabled? Do you even have enough time left in your life to work off this debt?
  • Your Attempts to Pay It off – Have you sought out other available options for debt relief? Did you attempt a loan modification, refinance or consolidation? Have you borrowed money from other lenders to pay for this loan? Have you cut costs in non-essential expenses?

How do you satisfy these conditions?

Same way as the Brunner and Johnson test – you’d better look like you’ve tried to cut costs, limit your expenses, and paid off that private student loan, or you’re not going to win approval for having the debt discharged via bankruptcy.

The Bryant Poverty Test

This test is the simplest, and probably the hardest to qualify for, unless you’re really having trouble making payments and providing for your family.

Unlike the other tests, this is a pretty simple numbers-based approach to determining whether or not your loan leads you to face an undue hardship.

Here how it works:

  • Is your after-tax net income near or below the federal poverty level?

That’s it!

How do you satisfy this condition?

You’d better not be making good money, no matter what your expenses are. Even if you’ve got 10 dependents and a ton of other debt, if you’re making enough money that you’re nowhere near the established federal poverty level, you’re not going to get approved for discharge here.

Which Type of Bankruptcy Should I File?

It’s important that you consult with a bankruptcy attorney on this point, because Chapter 7 and Chapter 13 bankruptcy’s work in very different ways.

You’ll face very different consequences from the two types of bankruptcy if your request for discharge gets denied, so choosing the right one can stand to save (or cost) you tens of thousands of dollars.

Here’s what happens if you fail to receive approval for having your debt discharged via the undue hardship tests:

  • With Chapter 7 Bankruptcy – You won’t have any other options if you fail to receive approval for discharge. Once you’ve been denied discharge, you’ll still owe your lenders the full amount of your private student loan debt once the bankruptcy case has ended.
  • With Chapter 13 Bankruptcy – You will have some other opportunities for financial assistance if you fail to receive approval for discharge.

Filing for Chapter 13 will give you a little more wiggle room if you don’t end up qualifying for private student loan discharge during your bankruptcy arbitration.

You should speak with a local bankruptcy attorney to find out which type of bankruptcy will be the best option for your specific financial situation.

Chapter 13 vs. Chapter 7

If it doesn’t seem likely that you’re going to be approved for a discharge via the undue hardship rule, then filing Chapter 13 is probably your best option for getting back on your financial feet, especially if it’s your private student loan debt that’s causing you so much financial trouble.

When you file bankruptcy under Chapter 13, you’re essentially agreeing to perform a debt “reorganization”, which restructures your debt (rather than completely erasing all of it), and allows you to pay it off in a way that prevents you from being forced into poverty.

Chapter 13 debt reorganization plans are a tool to buy you time to save up money so you can catch up on those bills that you can’t afford right now, whether it’s a late mortgage, overdue car loans or late payments on private student loan debt.

The best reason to file using Chapter 13 is that you’ll have better options for additional assistance if your request for discharge gets denied during bankruptcy proceedings, whereas with a Chapter 7 bankruptcy, you’ll still owe the full amount of your private student loan debt, and you won’t have any other opportunities to get it reduced.

Benefits to Filing Chapter 13 Bankruptcy

There are some significant reasons why you should consider filing bankruptcy under Chapter 13 if the main goal of your bankruptcy is to help tackle private student loan debt.

Here are the major benefits to filing bankruptcy via Chapter 13:

  • Your Chapter 13 plan (the debt restructuring plan that you put together) will determine the size of your monthly student loan payments, rather than your lender, potentially saving you hundreds of dollars each month
  • You’ll get to make payments at the level you’ve laid out in the Chapter 13 plan for 3-5 years, however long your reorganization plan is set up to run for, potentially saving you thousands of dollars in reduced student loan payments over that 3-5 year period of time
  • You will still owe whatever’s left of your student loans after you come out of bankruptcy (at the end of the 3-5 yeras that your reorganization plan lasts for), but you can attempt to discharge what’s left of you private student loan debt again using the undue hardship rule
  • You won’t have to face any collection actions while you’re making repayments under your Chapter 13 debt reorganization plan, so no collectors will be able to harass you for that period of 3 to 5 years
  • You might be able to assign priority to your private student loan debt during the course of your Chapter 13 plan, allowing you to focus on paying off your student loans and ignore other debts for that period of 3 to 5 years

Only a local bankruptcy attorney can advise you on how this process will play out for your specific situation, and on whether you should choose to file under Chapter 13 or Chapter 7.

Raising Defenses in Bankruptcy Proceedings

Another tool in your arsenal – though you’ll need to consult with an attorney to figure out how to use it – is that you may be able to “raise a defense” in your case, claiming breach of contract, unfair or deceptive business practices, or fraud as defenses to continuing payments on your private student loans.

The way this works is that you have to convince the court that you’ve been swindled by agreeing to rack up huge student loan debt on the promise of future employment or financial gain that hasn’t been realized and isn’t likely to get realized in the future.

The key point is that the court will have to agree with you that your education credentials don’t live up to the hype that was promised, and that you’re in a worse situation now than you were in before you went to school.

Essentially, your argument is that yes, you did rack up a ton of debt, but no, it wasn’t created based on a legitimate reason, and so it should be cancelled since you were essentially scammed.

This strategy works best with vocational or trade schools, like trucking schools, culinary colleges, pilot training programs, or other educational programs that aren’t offered at traditional colleges and universities, and especially those from schools or other institutions with terrible job placement performance.

For some great examples of successful attempts to get debt discharged by raising defenses like these, check out Steve Rhode’s recent article here.

Am I Likely To Receive Approval for Discharge?

It’s hard to say, as it depends on your specific situation, the court your case will be tried in, and the judge who will preside over your case, but there’s one simple trick to quickly find out if the odds are in your favor.

Applicable bankruptcy laws state that “qualified education loans” from “eligible education institutions” cannot be discharged, and the Department of Education keeps a list of institutions that meet this criteria.

The way you can use this to your advantage is to check if your school is featured on that list. If your school is not on the list, then they’re technically not an “eligible education institution”, and you’ve got a much better chance of getting approval for your discharge request since your loan may not be counted as a “qualified education loan”.

To see if your school is on the list of eligible institutions, go here, and search for it. If your school doesn’t appear, you’ve got a pretty dang good chance of getting an approval for bankruptcy discharge, and you should definitely consult with a local bankruptcy attorney.

How Has Bankruptcy Law Changed in Recent Years?

(Updated May, 2015)

Not much has changed when it comes to private student loan bankruptcy law, but the interpretation of the law has definitely been relaxed.

In fact, in the past several years there have been many cases where private student loan debt was discharged via bankruptcy proceedings, and these cases are setting new precedents across the country, making it more likely that you could get approved for a bankruptcy discharge of your own.

Stories continue to emerge in the mainstream media proving that courts and judges across the country have been getting more lenient and allowing for more private student loan debt discharges than they had in the past, which is a great thing for those of you facing major financial trouble because of excessive debt.

A Short History of Private Student Loans Bankruptcy Law

Before 1978, any student loan debt was dischargeable in bankruptcy, without any exceptions.

Whether your debt was from private student loans, or federally-funded loans, you could get rid of it in full, 100%, by filling for bankruptcy.

Banks and other powerful financial agencies (the lenders offering student loans) realized that this was a huge threat on their financial solvency, so they lobbied Congress to change the law, and started winning some serious concessions.

How exactly have bankruptcy laws changed since 1978, when Congress first started clamping down on our ability to discharge student loans? Find out below!

  • Pre-1978: All private student loan debt was eligible for discharge via bankruptcy, making it easy for people to discharge their student loan debt when they ran into serious trouble. This was great for those running into trouble, but bad for lenders.
  • 1978: Lenders convinced Congress to pass a new law requiring that people pay their student loans for at least 5 years before they’re eligible to be discharged via filing for bankruptcy, unless loan repayments “represented undue hardship” to the borrower (making it difficult for them to pay for basic needs).
  • 1979: Lenders lobbied successfully for a further tightening of the 5 year restriction, with the new law requiring that the 5 year repayment period couldn’t include any time that the student loan debt obligation was suspended, like during loan deferment or forebearance.
  • 1990: Congress passes new restrictions requiring that borrowers pay off their student loans for at least 7 years before they’re eligible for discharge via bankruptcy, and with the same stipulation that none of those 7 years could include any period of time that the loan debt obligation was suspdended.
  • 1998: Lenders land a huge win, convincing lawmakers to update the law so that private student loans aren’t dischargeable via bankruptcy ever, no matter how long the loan debt has been paid back. Even borrowers who had paid their loans off for 10, 15, or 20 years couldn’t discharge them via bankruptcy now.
  • 2005: Previously, a loophole had allowed loans that were not made under a “program funded in whole or in part by a governmental unit or nonprofit institution” to be eligible for discharge, but a new law is passed to prevent virtually 100% of private student loans from qualifying for bankruptcy discharge.

The rest of this page covers more recent court cases, explaining what happened, and why they matter, in detail. Whenever any major bankruptcy-related news emerges I’ll update this page, so make sure to check back often for the latest information.

Another Positive Court Ruling: Lesley Campbell

(Updated June, 2016)

While Robert Murphy’s case hasn’t lead to a major revolution in the way that private student loan bankruptcies are handled (though it still could!), we’ve got another indication of thing getting better from a ruling over the debt of Lesley Campbell, who owed $300,000 and filed for bankruptcy in 2014.

This was a brave decision for her, and one that apparently less than 1,000 bankruptcy filers even ATTEMPT each year (no wonder the laws aren’t changing… not enough people are challenging them!), and a risk that was entirely worth taking, because Lesley Campbell just won!

While she wasn’t able to discharge the entire $300,000 she owes, she did successfully get her bar study loan of $15,000 discharged, due to U.S. Bankruptcy Court Judge Carla Craig’s ruling that her other student loan debt and the bar study loan weren’t quite the same.

In the ruling, Judge Craig determined that the bar study loan did not constitute an “educational benefit” under the law, which is what you’re NOT allowed to discharge during bankruptcy proceedings. If you have “bar study loans” of your own, or any other loans that were used to help cover college costs, but which you think you could argue did not provide an “educational benefit”, then it’s time to consult with an attorney!

And, while this may only be a small crack in the wall forming, at least a crack is forming at all. The more cases like this, where people successfully get bits and pieces of their student loan debt discharged, the sooner the large student loans themselves are likely to appear on the negotiating table.

Why Robert Murphy Might Save Us All

(Updated October, 2015)

This just in – student loan debt may about to become far easier to discharge via bankruptcy proceedings, and it’ll all be due to a 65 year old man named Robert Murphy.

To pay for college for three of his kids, Robert Murphy borrowed several Parent PLUS student loans (Federal Student Loans) between 2001 and 2007, racking up $246,500 in debt after interest accrual.

When he lost his job in 2002 and found himself unable to get a new assignment, Robert knew he was in big trouble.

After running through all his retirement savings and having his home foreclosed on, Robert and his wife have been left living on $15,000 in annual income from her Teacher’s Aide salary.

It’s a sad story, but there’s a silver lining, because Robert Murphy appears poised to win an appeals case in a Boston federal court who could rule in his favor and expunge every cent of the debt he’s racked up.

Why Does Robert Murphy Matter?

Robert Murphy’s case is important because it could set a new precedent that all courts in the United States will need to follow.

This case hinges on the specific definition of “undue hardship” (the clause people use to get their student loans discharged in bankruptcy proceedings – read below for details), and it’s the first time in a decade that a Federal court will weigh in on the matter.

The outcome of this case will be vital to all of us struggling to pay down excessive student loans, including everyone with BOTH Federal AND Private student loan debt, and especially for those people who have racked up extraordinary levels of debt which they could never possibly pay off.

A win for Robert Murphy will be a win for ALL of us, so keep your fingers crossed and make sure to check back in with me regularly, because I’ll be updating this post as soon as the verdict is released.

The 8th Circuit Courts Landmark Ruling

(Updated September, 2014)

I’ve got great news for those of you interested in seeking a private student loan discharge via filing for bankruptcy:

The Eighth Circuit Court of Appeals recently affirmed a decision make by its Bankruptcy Appellate Panel that opened the way for a borrower to receive discharges on 15 different private student loans and a combined total balance of over $118,000!

This is a landmark case that cuts against the grain of the logic typically used to determine whether or not bankruptcy should provide some relief from private student loan debt, and a case that could pave the way for you to get your loans forgiven by filing for bankruptcy.

For details on the case, please view our write-up at the bottom of this page, or click here.

What’s Different About the Conway Case?

Typically, bankruptcy courts rely on the precedent set by the 1987 case titled Brunner v. New York State Higher Education Services to decide whether or not private student loan debt can be discharged during bankruptcy proceedings.

The so-called “Brunner test” that emerged from this case requires that debtors prove three things in order to receive approval for having their debt discharged:

  1. That they cannot maintain a minimal standard of living for themselves, and their dependents, if forced to continue repaying their private student loan debt
  2. That their inability to repay the loan while maintaining a minimal standard of living is likely to persist throughout the remaining lifespan of the loan
  3. That they have made a “good faith effort” to repay the loan

These conditions have left a great deal of wiggle room for judges to rule that borrowers shouldn’t be eligible for bankruptcy discharges, using logic like:

  • He may not be able to make the payments now because of unemployment or underemployment, but since he’s only 30, he’ll almost certainly be able to land another real job and start making payments again at some point in the future.
  • She may be having trouble making payments now, but once her children turn 18 and start fending for themselves, she’ll have enough disposable income again to resume making her monthly private student loan payments each month.

Fortunately, the reality that Americans face an entirely different economy in the wake of the 2008 financial crisis has apparently taken root in the minds of some bankruptcy courts, including the Eight Circuit, and has lead to a new approach in bankruptcy rulings.

Does Conway Set A New Precedent?

In the case of Conway v. National Collegiate Trust, the Eight Circuit Court recently ruled that Ms. Conway should be granted permission to seek discharges of about 20 separate private student loans, loans with a combined total balance of well over $100,000 in total debt.

Conway graduated from a well-renowned school with a B.A. in Writing, and was able to find full-time work in the field, but was then laid off from two different jobs between her graduation and 2008.

As a response to her major economic troubles, she filed for bankruptcy protection, requesting to have her private student loans discharged in the process.

Two of her private lenders agreed, but a third company called the National Collegiate Trust (NCT), contested the initial court ruling.

At the time of the dispute, Ms. Conway had a total of 15 loans from NCT, which carried a total balance of $118,579.66 (including interest).

Conway’s Initial Ruling

At first, the bankruptcy court in Missouri agreed with the lender (NCT), and refused to allow the debt to be discharged, arguing that while Ms. Conway certainly couldn’t afford to pay off her loans now, she had a college degree, “well-developed writing and reasoning skills” and “at least 30 years left to navigate the job market” so she could resume making payments on her debt.

Sound familiar?

As mentioned above, this court used one of the arguments from the standard Brunner test to reject her request for discharge.

The Appeal

However, when Ms. Conway’s appeal reached the 8th Circuit’s Bankruptcy Appellate Panel (BAL), the lower court’s decision was overturned.

Here, the Court noted that if Ms. Conway were to make the minimum standard monthly payment of $846.17 on all 15 of her loans, there was no way she would be able to maintain a minimum standard of living.

In this case, the 8th Circuit ruled that each loan should be evaluated individually to determine whether or not they could be discharged.

This approach flies in the face of the gold-standard and more typical Brunner test, and instead uses the logic of the “Totality of the circumstances” test, which determines whether or not repayment would be deemed a hardship by using the debtor’s past, present and expected future finances.

In ruling that Ms. Conway deserved to have her debts discharged, the BAL used her current income as a server (rather than her future expected income as a professional writer) to calculate her monthly expenses, explaining that she clearly faced an undue hardship in this case.

What’s Next?

This case paves the way for others in a similar situation as Ms. Conway to be evaluated for having their private student loans discharged via bankruptcy.

Especially interesting to me is the fact that the Eight Circuit wrote of their decision to use her actual wages rather than her anticipated future earnings, noting that they would “not substitute assumptions or speculation for reasonably reliable facts.”

While this decision can be seen as a major stepping stone in the nation-wide campaign against crushing private student loan debt, it should be noted that the precedent it sets is quite narrow in scope because:

  1. The ruling only applies to the Eighth Circuit, which includes North and South Dakotah, Minnesota, Nebraska, Iowa, Missouri and Arkansas
  2. The ruling is not yet a formal discharge order (meaning that Ms. Conway’s debt is not officially discharged yet), but instead an order for the lower bankruptcy court to evaluate each of her 15 student loans to determine their eligibility for discharge

However, it’s possible (and perhaps even likely) that this ruling could serve as a catalyst for a sea-change, opening up the potential for tens of thousands of other borrowers to have their private student loan debt discharged via bankruptcy, and saving many of this website’s visitors from a lifetime of debt slavery.

We’ll keep you updated as things progress in Ms. Conway’s case, so please be sure to check back soon for additional information.

For Additional Information

If you have other questions that weren’t answered here, please feel free to ask them in the comments section below.

Keep in mind that we can’t provide legal advice, but we are willing to offer you any other assistance, and we’ll do our best to get you a response in 24 hours.

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Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt, where he offers advice on paying off student loans as quickly, and cheaply, as possible. His new website Forget Tax Debt, offers similar advice to people with back tax problems.

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  1. Hi Tim
    How would this work if you have a Federal Student Loan that is current, but a Private Student Loan that is defaulted and has been through one collection agency to the next (going on 7+ years)? I had to get the DoE Ombudsman involved for my federal loans, which was a great help but couldn’t do anything for the private loans. So I’ve been making payments on the federal loans, IBR plan, but the private loans have since defaulted and jump from agency to agency.

    • Hi Tony,

      Private loans are infinitely more difficult to deal with since there aren’t a lot of options, and very few resources for assistance. What are you trying to accomplish though? Your comment is on the Bankruptcy page – are you trying to go for a discharge?

      If you’re trying to rehab the loan and return it to repayment status, then obviously the first thing you need to figure out who actually owns your loan RIGHT NOW, and get in touch with them to set up a plan for getting back into regular repayment.

      It can be difficult to make that happen, as some debt collectors don’t want to allow you to get back out of default, but it is definitely possible.

      • Hi Tim
        Yes, I want to know the possibility of filing a bankruptcy/discharging just for my private student loan, even though I’m current on my federal loans. The private loan has since defaulted and bounced from collector to collector over the years. Do you think there is a possibility of discharging defaulted, time-barred private loans while continuing to pay federal loans?

  2. Trish Sanders says:

    Hi, I have a Parent Plus Loan now in excess of 160,000 and I am now unemployed with no assets. The loans are in Forbearance due to financial hardship but I will still keep accruing interest at 500 a month. My daughter has her own loans that she has to re-pay totalling 30k and she is struggling herself so I cannot ask her to help. I do realize that I go myself in a pickle. When I took out the loans my income was quite pleasing and then I lost my job. Now three years later I lost my job again. I am 55 years old with 1000 coming in from unemployment and a brother helping to pay the rent for at least this month. Lenders are Sallie Mae and Navient. I am working with the Federal Student Loan Services currently. Do you think I could qualify for a bankruptcy? My income in the last 7 years has not gone up but keeps going down. Thank you!

    • Hi Trish,

      Your story is a compelling one, and I would think you’ve got a shot at getting approved for a Bankruptcy Discharge because you’re nearing retirement age. I would definitely pursue a Bankruptcy Discharge if I were you, especially because even if it is a long-shot (no matter what, it takes time and money and effort qualify), the end results are worth it, especially with a loan balance as large as you’re facing.

  3. Patricia Rhoads says:

    What if I have more than 8 different lenders, many have gone into collections because repayment started earlier than I began my career (it took me way longer to graduate due to attending different colleges and NO federal aid help — i didn’t qualify) so I was forced to take out more private loans than federal and since it took me so long getting out of school most of the deferment dates on some of the private loans expired; so while i was working as a bartender before teaching I had $300-$500 total payments a month that I couldn’t make. My mom is a cosigner on all my loans and I just recently got married. My financial situation is average after I got married, but my mom’s is below average. She has to decide (when I can’t pay the loans) to either pay $400 to pacify a lender/collection agency or get the hole in her roof fixed. She has no retirement b/c my former step dad left her and spent all of her retirement; she’s been a nurse for over 30 years and is about 65 years old.
    The rounded/guestimated total of my student loan debt (private only) is about $100,000 and won’t go down because either interest or collection agency fees. Federal loan debt is around $30,000. I keep doing the rehab programs or work on automated payment plans but there never seems to be any real relief. My mom is worried about her credit (I’m not worried about mine because it’s already ruined from the student loans-even though I need to be) and I am more worried about when my husband and I want to get a new house in the next year and a half (can it be in his name or have to be in both our names in which my credit score will ruin that) or, even more, have children. Having a child is a debt preparing for it….
    I don’t even know if declaring bankruptcy would help either myself or my mom in this case too.
    I don’t qualify for the teacher loan forgiveness program (I am teacher/band director in texas) because my loans are in default… there’s another issue.
    Got any advice?

    • Hi Patricia,

      Sounds like you’re in a pretty sticky situation. I would recommend that you get in touch with one of the debt resolution agencies and see what they have in mind for handling this. Your situation is way too complex for a simple solution, so paying someone else to deal with the intricacies of the law is probably in your best interest.

      If your loans are Federal, then call the Federal Student Loan Relief Helpline at 1-888-906-3065.

      If your loans are Private, then call the Private Student Loan Relief Helpline at 1-866-530-9946.

  4. Stressing in NJ says:

    Hi Tim,

    Thanks so much for helping people out like this! I have about 50k in debt that I took out for French undergrad and a masters in education. I have had trouble securing a full-time teaching job, and even then the private loans on top of other living expenses are very hard to make. I am only able to get sub work, which is paltry pay. I’m considering contacting a lawyer about bankruptcy, and want to add that I do have anxiety and depression which has also made full-time work difficult, and my father, who very strongly encouraged me to take out these loans and go to college (who cosigned), passed away a few years back, and I also lost another family member that year, thus part of the ensuing mental health difficulties. Even when I was full-time teaching, I barely made enough to scrape by and pay the whole amount the public and private loans wanted. Do you think I might have a case? I want to get married and have kids, and not worry about having this debt hang over me, making me a burden of a partner- yes I have considered working in low-income for PSLF but again, that hasn’t been a feasible reality for me. Thanks so much for your response!!

    • Sorry to hear about your situation – it definitely sounds tough. I do think you may want to speak to a lawyer, but I’m not sure you’ll have a great case here. You basically have to be totally screwed financially to qualify for the debt discharge via bankruptcy (meaning you can barely afford food, shelter, etc.).

      I think PSLF would be your best option, except that those benefits only apply to Federal student loans. If you’ve got private loan debt, then PSLF wouldn’t help at all.

      One thing you may want to consider is trying to get approval for a disability benefit. If you can secure Total and Permanent Disability status (this would mean you basically can’t work anymore), then you’d be eligible for Government Disability Benefits, AND you’d instantly receive a 100% discharge for your student loan debt. Look into the Total and Permanent Disability Discharge program.

  5. I live in Indiana. I have about 117k in private student loan debt. My parents are cosigners on all 6 loans. Three loans are in collections and I am only paying 100/month on each of those (they weren’t happy when I told them that’s what I’m paying). I’m a Dementia Specialist and General Practice Social Worker. My average income is expected to be 31-35k/year and my payments were originally over 850/month.

    My local bankruptcy attorney told me to try and consolidate, pay what I can, and then allow them to go to court and just take the 25% garnishment for what it is. I’m not sure how I feel about that, do I have any other options here?

    • Yikes…

      Federal Student Loan Consolidation is a scary prospect, so if you’re talking about Federal loans, I’d get a second opinion. I would not consolidate any Federal student loan debt, unless you can verify that you won’t lose your eligibility for any of the Federal Student Loan Relief Programs on offer. Oftentimes, consolidating the debt leads to losing access to everything (like Forgiveness, Forbearance and Deferments).

      I’m not sure that this it he best plan of attack, and I think I’d probably contact another attorney for a second opinion. If you’re told the same thing, then go for it, but be cautious about how you proceed. (I defer to local attorney advice because each state, county, etc., applies the laws to student loan debt, and especially student loan bankruptcy, in their own way).

  6. Louisa Fernandez says:

    Hi I have about 300k in student loans, a combination of law loans from a private law school and federal loans from undergrad/masters programs. My federal loans are fine, they are in IBR and Im in a public interest job so they are getting paid and forgiven. My private law loans are the problem. They were consolidated to get the best rate, but they are still very unaffordable and my cosigner is a senior on medicaire with health problems. She is nearly 78 and cannot help at all. I am a single mom with full custody of my child. I cannot buy a home because of my nearly 200k private loan. I have no other debt but student loans, no credit debt and no car loan. I am considering filing for chapt 7 or chapt 13, whatever provides relief! I try to work out some payment arrangement with ECSI/lendkey but they will not receive anything less than 1050 a month which I cannot afford. This private loan was used mostly for living expenses in law school. What are your thoughts on my situation? Thank you for your time!

    • Hi Louisa,

      Private loans are ALWAYS the problem, unfortunately, and there’s still not a whole lot out there to help with them.

      The best bet for dealing with private student loans is to figure out a way to challenge them, either through the Defense Against Repayment Provision, or via filing for Bankruptcy. In your case, Bankruptcy actually sounds like the path of least resistance, since you owe so much.

      My recommendation is that you should consult with a professional here; you need to find an attorney who has actual experience dealing with similar situations.

      I think you have a good chance at qualifying for a discharge simply because you owe so much money, and it helps that you are a single parent with a dependent.

      The biggest question is going to be, how much are you making? You mentioned law school, and if you’re a high-power attorney, pulling in a lot of income, then it’s going to brutal to get the courts to rule in your favor.

      I think you’re going to need to pay someone for help here, and my advice would be to consult with an attorney. The only alternative option I can think of would be calling the Private Student Loan Relief Helpline and asking them if you have a shot at going after a Defense Against Repayment discharge.

      The downside to going this route is that it can be tough, especially since your debt sounds like it’s from a legitimate school (I’m assuming you went to a good law school?). These discharges are usually easier to qualify for if you’ve attended a degree mill type for-profit institution that allows anyone and everyone to attend.

      I’ve not personally heard of anyone successfully discharging law school debt via Defense Against Repayment, but that doesn’t mean it can’t happen.

      You can reach the Private Student Loan Relief Helpline by calling 1-866-530-9946.

      Good luck! And let me know how it goes.

  7. I live in MS. I have been told repeatedly that the court I’d have to go through here has not approved a student loan bankruptcy in years and everyone refuses to help me because of that (well except people who are unaware of the specifics of what you need to do that is)..

    1) I owe around $94,000 plus interest (have had 4 years of unemployment and then economic hardship deferment interest). I am not using any of the income based repayment plans because (a) I won’t live that long and (b) if I live that long I already don’t have the money to make the payments, how on earth will I pay taxes on what likely will be over $100,000 forgiven? I have paid off older loans (Perkins and Subsidized Stafford, I finished paying off some of them (3.5 years left at the time) while paying for the current ones which I used to get an MBA and PhD). I have subsidized and unsubsidized Stafford. I paid from 2006 through 2012 when I was fired for cancer (actually two of them in one year, one of which has no cure).

    2) Went through my savings and finally had to choose between health insurance and rent so was homeless for 19 mo. Finally in HUD housing paying $120/mo for rent. Have full food stamps. No medicaid expansion in this state so have to pay full price for health insurance. 2016 is $957/mo, in Jan will go up to $119/mo. I also pay $141/mo against my cancer center bills. I have about $4100 debt on a 11 year old car ($111/mo). I do have some retirement money but am refusing to cash that in because it is easier to deal with this now than later when I am dying of cancer (this cancer has a fairly long lifespan so I may well make it to retirement; also need to have the higher SS at 70 due to how little I have paid into the system. I just turned 63). I have no other debt. If I include the medical bills in a bankruptcy then the cancer center will stop seeing me. I can’t have that happen as they are the best choice for my longer term survival (one of the top cancer centers in the country).

    4) 2015 I made $15,000; 2016 I will make $15,002. Next year is grimmer as I was laid off from one job and so likely only make $6000 from that one – still looking for more work, including minimum wage work. Have yet to find anything full time or with benefits. I get full food stamps as they subtract my medical bills from my income since I am over 62. I am not yet disabled from this cancer, although I do struggle with fatigue but clearly I can work (I need to work!!).

    5) Can you declare bankruptcy if your only debt you are including is educational? (Can’t include medical or they won’t see me anymore and can’t include the car as this county has no public transportation).

    6) Do you know if it is really true that the court that does MS refuses to discharge any student loans in bankruptcy?

    7) I am presuming I’d likely qualify under Brunner’s, and I understand that even in the best of times this state uses that, based on what I have stated does this sound like it is even close to likely satisfying Brunner’s?

    8) Do you know of any attorneys in this district (MS) that would take a case like this who actually are knowledgeable about student loan issues. I can’t find one (the ones who know the rules won’t take it due to saying this district will no longer discharge them under any circumstances and they aren’t going to waste their time and money I don’t have) and the only ones who said they’d take it appear to be ignorant of, for example, the need to file the additional paperwork to even be able to include it. That does not inspire confidence.

    Suggestions please.

    • Oops realized I put this in the private loan blog and not the Federal loan one. Sorry about that. My loans are all Stafford (subsidized and unsubsidized). Also I consolidated them all in 2006 when I started repayment.

    • Hi There,

      It sounds like you have no shot at getting an approval. The test approvals are based on local courts, and if your local area is turning everyone down, it doesn’t matter how bad your situation might be.

      I’m sorry to be the bearer of bad news, but I think you’re screwed on this one.

  8. I have a question about my student loans and filing bankruptcy… I am a single mother of one and I don’t get child support because the state of AZ says they can’t find my sons biological father. I have over $100,000 in student loan debt and they want about $ 800 per month all together I haven’t been able to pay them in 4 years now. I only make $16,000 a year I can’t find a job in my field. Do you think i would qualify to file bankruptcy and getting my student loans cancelled?

  9. Hi there Tim!
    I was looking for an email address to get to you personally, but it does seem like you respond to these messages so here goes.
    I’m in $400,000+ worth of student debt, about half is federal and half is private (got a BFA and MFA in music technology and film, respectively). I graduated in 2015 and have had trouble getting consistent work for the past year, and so I make below the federal poverty line. I’m on the IBR payment plan with my federal loans but with $200K in private debt and running out of deferments, I’m not sure what I can do at this point. Bankruptcy has been floating in my head, but my parents are right now going through their second bankruptcy. Our financial situation has been very difficult for the last ten years. I have a tiny bit of relief because my parents co-signed two of my private loans and those are now on forbearance due to their bankruptcy. But I have an outstanding private loan that was cosigned by my grandmother, and that is past due, for a single loan it is a $600+ monthly payment I cannot afford. I had to move out of my apartment last year and back home with my parents because I could not afford rent. My car went out of commission last year and I don’t have enough money to buy one, nor the credit to get a loan, nor the money for car insurance period, and I’m in Southern California so it’s been really tough getting around. I also currently have Medicaid because I can’t afford health insurance.
    I worry that attempting to file bankruptcy will ruin the protections I have with the federal loans and then I may be in an even worse situation. I am talking to a bankruptcy lawyer as soon as I can, but I’m worried that I may be stuck in this for a very long time if I can’t figure out some drastic solutions.
    Can you give me some advice?
    Thanks so much,

    • Hi Cheyne,

      Sounds like you’re in a pretty tight situation… unfortunately, there’s not a whole lot that you can do with the Private Loans. You’re on the hook for those unless you can qualify for a Bankruptcy Discharge. Personally, if I were you, I would try that route, because your owe WAY TOO MUCH money to be able to ever pay that back.

      If you were an Attorney, Dentist, Doctor, sure… they’d probably force you to remain in repayment, but you got degrees in Music and Film? I don’t see any way for you to ever possibly repay this.

      I would absolutely speak to the attorney right now. You’ve got no income, no car, living at home, etc. You’re the person that the bankruptcy laws were created to protect. Talk to an attorney and prepare to file and fight this thing. If anyone has a shot at getting out of the debt, it’s you.

  10. Tim,
    So glad you’re sharing this information. There’s hope.

  11. Hi Tim,
    I want know if my private student can be discarded bankrupt, I keep being told no that it can not be! I can a co sign on my private student loan that is now living in a nursing home and all his goes to it. I am unemployed, i have no car or house, i do have 3700 in a IRA, and total in private student loan is about 32000 and about 59000 in federal student loan and credit card debt. I don’t know what else to do in getting them paid off, i by only option is to end my life. my private student loan is with AES which is handle by citibank. please help?

    • Hi Shawn,

      You should speak to an attorney and see if they think they can get your loan discharged.

      It’s POSSIBLE that you’d be able to qualify for a discharge, except that whoever cosigned for your loan would still be on the hook for it. Even if you did end your life (please don’t!), your cosigner is still going to owe the money on that debt, so definitely do not think of that as a potential solution.

      • shawn sapp says:

        My co-sign who my dad, he only has 30% use of heart left, if die when i would be to file for bankrupts. AES has charged off on my private student loan but citibank is who they got through my understanding. Is their any thing new on issue for 2017-2020 when trump out office.

  12. Hi, I am an international student who received a student loan in 2006 through Global Student Loan. My annual income is $15000. I have paid 50% (my current balance is $15,519.10) of my student loan but it is extremely difficult to keep up with monthly payments. Can I qualify for debt forgiveness? Also I do not live in the US nor am I a citizen.

    • Hi Melanie,

      Not living in the US and not being a citizen probably won’t make a difference since there aren’t a lot of options for people with private student loan debt anyway. If your loans were from the US Federal Government, then you might have some options to pursue forgiveness, etc., but private debt is notoriously difficult to get rid of, and basically requires proving that your loans are literally preventing you from affording food and shelter.

      • Hi Tim,
        Do you know of any lawyer who could provide guidance? I have asked previously for a lower monthly payment but I did not qualify.

        • Hi Melanie,

          I do not have any referrals for attorneys, but Google/Yelp would be a good place to start. Read reviews… don’t believe everything you read, and try to find someone who’s in your local area.

  13. Hello,

    I made the mistake of going to a school as a poor teenager. Although I had good intentions, it made life much harder. I graduate in one week, but the private loan lenders are already hassling me for nearly 800 dollars a month. I have a co signer who is 90 years old, and lives off of social security. For the past 7 months I have been living in my car behind a Macy’s building to finish school. I was working for a bike company in the city, but havent worked with them in a few months. I am living off my small tax return at the moment, and my credit card. I will never be able to get an apartment, I am afraid Ill have to sleep in my car forever. My parents live in another state, but are very troubled people. I could never live with them, and even if I did, I still cannot afford these payments. I owe 70 in private student loans, and 30 in federal. What are my chances of getting this discharged?

    I should add, I get charged out of state tuition even though I pay NY taxes, and Im a NY voter, I have a NY back account, ect. because I was younger than 24, they charged me out of state and my car was registered at my parents address.


    • Hi Rob,

      It’s time to check out two things:

      1. Speaking with an attorney who may be able to take your case on pro bono. I’m SURE you can find free legal services online, somehow. Try posting to and ask them if they can point you to a pro bono lawyer for low income people

      2. Considering drafting a Defense Against Repayment letter, and attempting to prove that you were basically defrauded, and that the school who convinced you to enroll in their program broke some state law in the process. If you can get the DOE to agree that you were screwed, and that the school acted illegally, your loans MIGHT be forgiven

      Chances of getting the bankruptcy discharge may be high for you, since you’re in such a bad spot, but it’s hard to say. You will need to ask a local attorney and get an idea of how the judges in your area are ruling these sorts of cases. To me, it sounds like you would pass one of those hardship tests, so I think it’s worth attempting.

  14. Sallie Mae's Bitch says:

    Well let’s see I’m a 28 year old with $240k in debt with a masters degree. About $150k in private and rest federal. I only make $12.00 an hour and am enrolled in PLSF, although i have a guy feeling this will be taken away some day. I pay my loans I’m on a special payment plan. This has caused serious depression issues for me: my hair has fallen out, I cry multiple times a day, I’ve lost friendships and family relationships due to this. I’ve forgone dental and medical care for the last 8 years and now am paying for it with various health ailments. I sometimes feel I would be better off dead as I didn’t think this is the life I would be living. I took the loans out on premises I would be making 60k a year… I’ve lost all hope and dreams of getting married and having children due to these loans. Am I a good candidate for bankruptcy?

    God has failed me because I have yet to see the answer to any of my prayers on this….

    • God has nothing to do with it. You need to contact a local attorney and find out whether or not there’s a chance of getting approved for a bankruptcy discharge in your local jurisdiction. God isn’t going to do this for you, or make it happen. You need to take responsibility for yourself and get it done on your own.

      I’m sorry to hear about your situation, as it sounds totally terrible, but praying is not going to help. Talking to an attorney MIGHT.

  15. Hello,

    This isn’t a joke. It feels like the last 10 years or so of my life have basically been lost thanks to my private student loan debt situation. It doesn’t seem like there’s any type of a light at the end of the tunnel as well. No bankruptcy attorney I’ve talked to will try for adversary proceedings. I have filed several complaints with the CFPB, and they have done nothing.

    I took out approximately $100k in private student loan debt back in 2004 that has ballooned to about $150k at the present moment. I graduated in the spring of 2008, and already by that time the “recession” had pretty much taken it’s full effect on the job market and economy. NOBODY wanted to offer me more than perhaps $36k per year before taxes, and as the months went on, if I were let go, the compensation just kept dropping from there.

    The lender/servicer (whoever) would absolutely NOT work with me on an income based repayment plan under any circumstances. Either it was ALL or nothing. The debt just kept snowballing from there, and it’s basically numbers on a piece of paper at this point with no realistic chance of it ever being paid off (interest compounds DAILY!).

    Then, in 2014 I was served by National Collegiate Trust (I’m in IL).

    I have never made more than $16 an hr in my life (now, I’m at $12 an hr since I started a new job). “Ubering” 80 hours a week really isn’t an option for me (the car I drive is 12 years old, is NOT in my name & getting close to 100k in mileage) while working a full time job in order to make the minimum payments of $1700 a month (while ignoring every other basic survival need).

    If I fully understood exactly what I was getting myself into, I would’ve never, EVER touched any private student loans. NEVER. Now, I fear I may never own anything, get married, start a family, nothing. I would’ve never even GONE to college if this was going to happen.

    I’m currently under a ch. 13, and at first, my attorney wanted me to pay $550 a month under his proposed plan. It was either that, or come up with a lump sum settlement of $80,000. Ridiculous. I don’t think he understands the difference between private, and federal student loans. At least with Federal, they will work with you on repayment options based on your income, or inability to pay due to no fault of your own if you can’t find a job that pays anything about $12 or $15 bucks an hour. Shameful UIC graduate here.

    I wanted to be PROUD of graduating college. Now, I have to live my life almost like I’m some sort of a criminal, just embarrassed to show my face in public among-st my colleagues, family, or peers while constantly being mocked about this. Suicidal.

    I made a mistake that I cannot undue.

    The lender is FDIC insured (at first these loans were from Chase, then got transferred to American Education Services) I’m sure of it. They are all still in the business of extortionist, predatory lending, seemingly able to pull money out of thin air. I cannot. Again, NO attorney will help me. Best of all, I don’t think any of their (Chase/AES) representatives made it quite clear that….under NO circumstances, there IS NO ESCAPE HATCH WITH THESE LOANS before I signed up.

    God Bless America!

    How can I represent myself if I get sued and WIN? I have missed my ch. 13 payment for almost 2 months now since I’m at a lower paying job, it’s only a matter of time before the trustee throws out this case. Then NCT will come after me again. My attorney refuses to do anything, and is nearly impossible to reach. I’ve asked repeatedly to try and have the ch. 13 payments lowered.

    I left my other job because it was just AWFUL, and it was a total dead end after 4 years. It’s not like they were paying me a million dollars a year to stave away any misery. I gave them my all, and sat in absolute stagnation hell. Anyone and everyone has the right to leave a job they’re not happy at for a chance at something else.

    In addition, it’s not like my degree automatically commands a salary of over $100k per year (Business Administration: Management).

    Please, if there’s anyone that can offer any type of credible solutions here to this continued plague of problem that is seriously messing up my life, your help/support would be much appreciated.

    Time is of the essence. I’m more than willing to go to court if I get sued with my proof of income ($12 an hour). I own NOTHING of any value. Oh, and thanks to my wonderful credit, I may not be eligible at ALL for any higher paying jobs out there that COULD help pay any of this back.

    Thank you, and god bless.

    • Hi Sol,

      I’m sorry to hear about your experience with crushing student loans… if only you had known, right? You’re not alone in your struggle, and while that may not offer much consolation, make sure that you don’t give up on fighting against this debt. In my opinion, the only way forward for you is going to be working out some kind of legal agreement that consolidates your debt and reduces your monthly payments dramatically. A large portion of your debt will need to be forgiven too, otherwise you’ll just be making payments forever, making no progress.

      Please consider calling the Student Loan Relief Helpline at 1-888-694-8235. They MAY be able to help you. (Maybe not, since you owe so much and make so little). If they can’t… or if you don’t like the offer they make, then you need to save up some cash and keep searching for a lawyer who WILL help you go after a debt settlement judgment. It’s possible that you could qualify for a debt cancellation, but that will take a court order, which requires all sorts of legal proceeding (as I’m sure you’re well aware).

      Don’t give up though!

      • Thank you, Tim! I really do appreciate it. Anything you can tell me is very uplifting and encouraging! I wish I was making all of this up, but I’m not! It’s awful, just awful. It just seems like right now there’s absolutely nothing I can do. Hopeless. Again, the clock just keeps ticking. It’s almost 8 years now that this hell has been going on, my own personal hell. It’s hard to just pull large lump sums of money out of thin air to make an attempt at any type of settlement for this situation. My lawyer is apparently trying to lower my ch. 13 payments, but I don’t have any updates from him on that. I’m still fearful that the Trustee is getting ready to dismiss my case, and I’ll be summoned to court in the near future. It’s also not easy to find anyone locally (Chicagoland area) that wants to take this case, and fight for any type of relief for me. I’m hopeful a new president, congress, someone, anyone, anything…..can pass something to help provide some sort of legal remedies to my situation, and to others experiencing this pain/misery. I wouldn’t wish this on my enemies. I really wouldn’t.

        • Hey Tim,

          I’m wondering if you have any updates regarding what possible legislation, or remedies may be in the works for private student loans? As of right now, I can’t seem to find much of anything. Even on Hillary Clinton’s website, there’s not much mention of what she intends on doing with private student loan debt at all. Even if it’s just being able to re-finance, or some type of loan re-hab program….something, ANYTHING. Thank you!

          • It just seems to be ALL ABOUT FEDERAL student loan debt.

          • Hi Sol,

            Most of the Forgiveness benefits available are about Federal student loans, but Bankruptcy forgiveness options are actually easier for Private.

          • There’s nothing new for Private loans. The Government doesn’t really get involved with PRIVATE student loan debt, and you won’t hear any of the Presidential Candidates talking about it. Whenever there are updates to Forgiveness or other student loan benefits, it’s almost universally applied only to FEDERAL loans.

          • Tim,

            I just saw this……seems promising? I wanted to share and get your thoughts:


            A report by the U.S. Department of Education, dated October 1st, 2015.-“Make Private Student Loans Dischargeable in Bankruptcy
            There has been no evidence that the 2005 changes to bankruptcy caused interest rates on student loans
            to decline or access to credit to increase significantly. As private student loans generally do not include
            the consumer protections, such as income-driven repayment plans, included in federal loans, the unduehardship
            standard for bankruptcy discharge leaves private student loan borrowers in financial distress
            with few options.
            There are strong grounds for maintaining different standards for federal student loans. Federal loans are
            not underwritten, have generous terms and protections, and the payments can be limited based on
            income. Private student loans, by contrast, are underwritten and most do not have a built in incomedriven
            repayment plan. For these reason, the report recommends allowing private student loans that do
            not offer PAYE-like borrower protections to be dischargeable in bankruptcy similar to other forms of
            consumer debt. Allowing private lenders the protection of non-dischargeability if they offer PAYE-like
            features will provide an incentive for private lenders to create meaningful ex ante payment modification
            options available for when borrowers cannot make standard payments.”

          • Hey Sol,

            Thanks for sharing this link! There are lots of good details in here about what they’re planning on doing, and all of it appears to be in our interests, but we’ll see what actually gets enacted.

            Just recently, I did come across the DOE plan for Reforming the Student Loan Servicing System, and there is some very promising stuff there. Check out my Blog post about it here.

    • Tim,

      And I found this off of Hillary Clinton’s website……not saying that she’ll be the next president….but…..come on…..let’s be serious?

      It at least makes SOME mention of private student loans…..

      “To stop predatory schools, lenders, and bill collectors, Clinton’s plan will:

      Enact a new Borrower Bill of Rights to ensure accurate and timely advice on repayment options, including income-based modification for private borrowers who are in distress, and pursue a robust enforcement agenda to protect those rights. These standards will also be privately enforceable so that borrowers can assert their rights even when regulators fall short, which will further deter malfeasance by lenders and servicers.”

      • Hey Sol,

        You’re right… Hillary’s proposal has the word “Private” in it, but it stops far short of what’s needed. Private student loans will remain a ticking time bomb, even if that tenet from her proposal is implemented in full.

        We need REAL Relief for Private Student Loan Debt, and empty platitudes from Politicians aren’t going to cut it. Congress needs to take action.

        • Sol Rosenburg says:

          Hey Tim,

          I managed to find something from a little whiles back that I wanted to share.

          Although I highly doubt the Obama administration will do anything before leaving office, I wanted to get your thoughts.

          I did try to reach out to president Obama through the whitehouse’s webpage (believe it or not there’s also a phone number to some sort of a call center on the page, and you can send a message through the site to the administration as well)…..and I was disappointed with an email response that seemed to have been cut/copied/pasted to anyone that wrote in with a message containing the words “private student loans,” or “student loans.”

          Anyways, here’s what I found…..

          Is there any way to find updates? I’ve looked all over…..nothing.

          And this is for ANYONE that reads this post… only takes about 4 maybe 5 minutes of your time to contact either the Donald Trump campaign, or the Hillary Clinton campaign to have your voice heard if you’re a distressed private student loan borrower (most likely nobody’s going to answer, and you’ll end up leaving a VM….but it never hurts to try):

          Hillary Clinton campaign ph=646-854-1432

          Donald Trump campaign ph=646-736-1779

          Keep hope alive! Thanks Tim!


          • Hey Sal,

            Thanks for the details. I have not heard anything regarding President Obama’s plans for updating student loan or bankruptcy laws before leaving office. I don’t think he’d bother trying to make any changes with Executive Orders (his MO for the past 8 years), because he knows that Donald Trump would just wipe them out with the stroke of a pen as soon as he takes over.

            I am not sure how things will be changing in the future, but I do know that the proposed Donald Trump Student Loan Forgiveness Program will make things better for most borrowers (as it offers total loan forgiveness after just 15 years of payments), but worse for anyone already qualifying for benefits under the Public Service Loan Forgiveness Program (which has forgiveness pegged at just 10 years of payments).

            We’ll have to see how things shake out when President Trump takes power and starts making changes.

            The man is familiar with Bankruptcies, and definitely sees the value in them, so perhaps we’ll have a shot at getting some real Bankruptcy reform and relief put in place during his administration. Hard to say though – I was an early fan of his (at least of his stance on Student Loan Debt), but lately it seems like he’s the type of person to say one thing, then do another.

  16. I am having serious issues with locating an attorney in Ohio that is willing to take on a case involving student loan debt. Should I file on my own? I am 42, recently divorced after a 23 year marriage and I care for my disabled son (including homeschooling him) and care for both my parents as they are undergoing chemo treatments for cancer (third time for my mother) …..I have not had any employment in over 10 years. I owe over 70,000 and the online school (South University) would not let me finish my bachelors degree. I need 8 more classes at $5,550 per class; yes another $50,000. People at Burger King will absolutely make more than what I possibly could with no degree, no experience, and strapped with all the student loan debt (private and non). What should I do? I do not have any Iphone account, just a government phone, I do not own any vehicle, no house or apartment. I only receive disability for my son ($600) and ($300) for food assistance.

    • Hi Michelle,

      What do you mean by saying that the school would not let you finish your Bachelor’s Degree? How are they preventing you from doing so? Is it because you don’t have the money to pay for the classes?

      I think you’ve got a great shot at getting a bankruptcy discharge, but you really do want to have an attorney advocating on your behalf. I would suggest contacting the Student Loan Ombudsman Group and see if they can help review your information to determine how you should proceed.

      You can reach the Student Loan Ombudsman Group here: 1-877-557-2575.

  17. I filed a Chapter 7 BK that discharged in 2014. My private student loans were listed in schedule of debtors and as I said, I received a discharge! How can I tell if the debt was in fact discharged? My credit report shows that the account is closed and Chapter 7 bankruptcy shows in the remarks section. I am being hounded by the collection agency telling me that I cannot discharge the debt. I am thoroughly confused!

    Please help! And also, thanks for all of the great info!

    • Hi Shannon,

      Don’t give the collection agency anything! They probably paid to acquire your debt at some point, and are just doing everything they can to get something out of it. The best way to prevent them from further harassing you would be to speak with an attorney and have them draft up a legal letter explaining that your loans have been discharged, and that any further contact from them will be considered harassment, and open up legal avenues to seeking recourse. (Something like that at least, I’m not an attorney and can’t offer real legal advice, but this is what I’d do if I were in your shoes!).

      Thanks for the kind works and good luck. By the way – way to go on getting your debt discharged! Was is a private loan that was released? I’ve only rarely heard success stories so I’d love to get more details about how you managed to get it forgiven. Which of the hardship tests did you have to pass? What kinds of details did you present to the judge? Did you have an attorney, or handle this on your own?

  18. Sam Torres says:

    I have a 10K private student loan that now is 15K after all the interest accrued. When I obtained the loan I didn’t have a SSN, so my husband co-signed. I wasn’t in school yet and my husband wasn’t either. The company still gave me the loan and up to this day they ask me for my SSN because they lost the records. I cannot pay the monthly payment anymore and the debt has already been charged off.
    The deal here is that I did file bankruptcy in 2010 and the attorney didn’t include this debt because of the “student loan” title. BUT, this is a private student loan. Do you think there is still a way to include that in my bankruptcy? Loan was taken out in 2004, last paid in 2015. Chapter 7 filed in 2010.

    Thanks for the help!

    • Hi Sam,

      Sounds like it’s way too late to get that loan included in your bankruptcy, especially if it was filed in 2010, but only an attorney will be able to tell you for certain. I’d contact whoever did your bankruptcy and ask them for advice on how to proceed.

  19. I have a question I was paying my student loans until I got sick. I’m now on SSD and my health will not allow me to work anymore. My debt to income ratio needmless to say is very Hi with the student loan hanging over my head. Do you think I will be able to file bankruptcy with that history. I filed bankruptcy in 2005 and managed my affairs until 2010 when I got sick and was unable to return to work. I applied for a hardship loan forgiveness from SallieMae now known as Navient. The responded after 3-4months of having with a resounding no. They refused to give me a reason for the denial although medically I fit the criteria. I think I can qualify to win a bankruptcy in my case.

  20. I have a private student loan through student cu connect. They want over $1,300 per month. Everyone I talk to says you can not bankrupt these or discharge. I cant even find a lawyer to help me out any advice?

    • Hi Bryan,

      You need to keep looking for lawyers who will help, as it MAY be possible to get your loans discharged via bankruptcy, but only with the assistance of an attorney.

  21. Hello,
    As an undergrad, I borrowed about $20,000 during my junior year and during my senior year while student-teaching. I paid my way through school, and decided to borrow at the end of college as I would not be able to work as many hours.

    My first loan was prior to 1997. I graduated in 1997.

    The teacher loan forgiveness only applies to loans originating AFTER 1998. I qualify for this program in EVERY area except for the date deadline. Do you know of any programs that I might qualify for that fell before 1998? This is especially frustrating to me, as I worked in a low income school for more than five years (actually 8). Still, there is nothing I can do to qualify for this program.

    My second question has to do with Income Based Repayment. Because I didn’t make much as a beginning teacher (after bills), I chose to enter into Income Based Repayment. This definitely helped me to manage my payments. However even when a person qualifies for income based repayment, the interest (on the total loan amount) continues to accumulate. So…even while making payments, the loan balance is increasing despite the fact that payments are being made.

    Has anyone tried to address this? I think interest is excused for the first three years on an IBR plan. However after the first three years, you might pay $300/month yet actually owe $500+/month. It is a hole you can never escape from. As a teacher, pay raises are slow. I am divorced with one child. Although I am not at the poverty level, I will never be able to pay off this loan. The reality is that each year my debt will be larger and larger, despite the fact that I am making payments. This is scary to me, and I have tried to communicate this to my loan servicer. The idea that I qualify for income based repayment, but that the interest continues to accumulate at the normal rate is baffling to me. I could expect to have a loan balance of hundreds of thousands of dollars down the road. This would make it seem like I am irresponsible, and yet I qualify for lower income repayment. Am I making sense?

    I have considered making payments on IBR for so many years and then asking for the forgiveness of interest (possibly in bankruptcy court).

    Please let me know if you have any suggestions or comments about this.



    • Hi Lisa,

      Sorry to be the bearer of bad news, but these programs are established with specific eligibility rules, and if you satisfy those conditions, you aren’t going to receive the benefits. The dates are hard set, and I’ve never heard of any sort of flexibility there, but you may want to speak with whoever services your loan, or consult with an attorney, to see if there’s any potential avenues worth exploring.

      On your second question – yes, interest continues accumulating even under the IBR plans, but that’s all specified up front. Anyone on an IBR plan should make sure that they’re paying AT LEAST enough to cover interest accumulation throughout the course of their loan, otherwise it just grows and grows and grows to an unmanageable amount.

      The good news for you is that President Obama announced the Obama Forgiveness Program benefits are eligible to everyone as of October, 2015.

      What you need to do is look at the Pay As You Earn Repayment Plan, and the REPAYE Payment Plan, and figure out which plan you’ll qualify for. If you can figure out a way to qualify for the Public Service Loan Forgiveness Program, then you’ll be fast-tracked for complete Federal Student Loan Forgiveness after making just 10 years worth of qualifying payments.

      So… don’t give up. You’ve got options, but you’re going to have to figure out which plans work for you. That’s not an easy process, but you can definitely do it if you’re willing to spend the time on the research. If you want to get assistance determining what you actually qualify for, then give the Student Loan Relief Helpline a call at 1-888-694-8235.

  22. Hi Tim,

    I have 2 daughters who were classified throughout school and in Special Education classes. One went on to finish a Bachelors and 2 Masters, the latter of which she needed to get in order to get hired as a teacher after all the hiring changes in our state. The younger never finished. Because the older was too young to get her own loans when she started school my husband cosigned. She got off to a rocky start and because of her behavior we wound up paying her bills and took a hit on our credit finding it hard to keep up. She straightened up and proceeded successfully. Because we took the hit on our credit, when our younger went I was not approved as a co-signer on her Hesaa loan so my older daughter co-signed feeling it was now her responsibility to do so. 1st bad news is the younger daughter did poorly and her issues for which she was classified have worsened. She has a hard time holding a job and ignores her bills. My husband became disabled and is not yet receiving SSDI benefits. We have had to sell our house and walk away with almost nothing and will be staying with a relative. We are about to file Ch 7.

    My younger daughter just lost her job again and is ignoring the Hesaa loan which my daughter cosigned for. What I didn’t know is that even though the declined the loan with me as a cosigner, they still kept me on as a joint cosigner. So now, it is likely that my younger daughter will at some point have to file for bankruptcy. My husband and I are filing for bankruptcy. Even if we are successful in getting the discharge, which I doubt on the part of my husband and I because I make 63K a year and my husband will at some point likely get his SSDI, that loan will now fall due on my older daughter who has been paying $1200 previously, and now with her PAYE adjustment rising, $2000 per month on her own loans. I also fear now after reading on the topic, that with me filing Ch.7 and the likelihood of my younger daughter having no choice but to do the same, the older daughter will face acceleration of my younger daughters loan and possibly even her own private loans.

    Another unfortunate aspect of this situation is that when we went for the private loans through Hesaa, we did not even realize they were private loans since we accessed the application from the FAFSA page and it combined information on private and federal loans on the same page without distinction between the two. I have since learned to distinguish between the two but the site is much more clear in distinguishing the private loans. We had no idea what the differences would be and both the high school info session and the college financial aid office told us we could take the amounts for everything necessary and could call it an education expense and that whichever lender we chose was pretty much personal choice and an insignificant detail. So we never even took a federal loan for either daughter’s first year. We are now watching the blossoming growth of close to $300K in loans even with my older daughter making massive payments and my younger daughter making less frequent payments of almost $400/mo.

    So my question was about my older daughter getting saddled if my husband and I must now file CH. 7 and my younger daughter has to as well. And, if my older daughter gets pregnant after her upcoming marriage, even though she would be qualified shortly after for PSLF or TLF, she may have to sacrifice her eligibility for that and possibly file as well in order to escape this insurmountable debt. You know, even if the laws could change to do away with compound interest, at least the debt would stop growing. By the way, my lawyer says student loans will not be discharged, so I am going to have to even convince him to investigate this but if I don’t include the loans as well, the whole bankruptcy will be moot because I will still be overwhelmed and unable to manage on my pay alone. The cost of raising two special needs girls has unimaginable expenses that also penalize you for your efforts to make them self-sufficient along the way.

    • Hi Anna,

      Your situation is exactly why we need student loan debt reform so badly in this country! It’s unbelievable, yet relatively common. Parents should not be forced to lose their homes just to be able to afford sending their children to college! It’s an OUTRAGE!

      I do not want to send you the wrong direction, and think that you should listen to whatever your lawyer tells you. Just make sure that your lawyer is familiar with STUDENT LOAN bankruptcy laws, that they have read up on the changes occurring over the last couple years, and that they are or have actively explored the opportunity to get your loans discharged.

      It is DEFINITELY possible to get private loans discharged via bankruptcy proceedings, and you situation sounds like it may be a good opportunity to have that done. The hardest part will be getting your older daughter approval, since it sounds like she’s doing well, and probably earning a decent income. However, with $300,000 in debt, there’s always a chance of an approval.

      I would definitely look into this, and get a second legal opinion if you need to, because you don’t want to leave this hanging, or fail to pursue what could be the biggest financial opportunity of your family’s life.

  23. I went to culinary school through one of the art institutes and graduated 8 years ago. Until this day, I have no clue as to why my financial advisor had me take out private student loans that amounted to 100,000 dollars. I never once received a “refund” check during my time at the art institute. Every semester she said it was difficult to get loans for me even though I hadn’t previously had any loans. I was 22 years old and had no credit cards or any other debt at the time of enrolling. I did not know they were even private loans until a few years after i had finished. The federal loans only amounted to a little more than 20,000. I haven’t really been able to get on my feet and my jobs have not paid much but I have been paying 100 dollars a month on these private loans which isn’t putting a dent in them. My statements say that I currently owe about 77,000 in private loans through “Navient” formerly sallile Mae. They threaten me if i need to lower the payment one month and once I could not pay and they completely moved me to another creditor because they said it’s in the contract that if I miss a payment then I have to start all over with another creditor. I don’t know what to do anymore. I’m never making enough to pay what they want. I’m making less than 20,000 a year and I would be ok with making payments for the federal loans but it’s the private loans that I owe the most for, which I’m still puzzled by! I ended up going back to school because culinary jobs just weren’t cutting it and even the federal loans for my bachelor’s degree combined with my first federal loans don’t amount to as much as the private loans do. Could this have been something the school or financiers advisor is responsible for?

    • Hi Bre,

      If the school promised you that you were going to be able to find a job paying a certain amount, or if they lied to you in some way or misled you in a way that violated your state’s laws, then you may be able to qualify for a debt discharge under the rules of the Defense Against Repayment Provision.

      This is probably your best bet, and perhaps even your only hope, to getting those loans discharged, other than by trying to file for bankruptcy.

  24. Andrew Sklar says:

    Im curious if I am eligible?

    I have roughly 50-60K in private student loan debt, and my current annual income fluctuates between 10-20k a year (if I am lucky (i am a performer,and Have gotten some good gigs but they dont last)).I was originally supposed to be paying 700-something a month, but i got on the rate reduction program and brought it down to 420 a month.

    Any thoughts or help?

    • Hi Andrew,

      It sounds like you’re making very little, so it may be possible for your qualify for a debt discharge via bankruptcy. I would consult with a local attorney who has experience dealing with student loan debt.

  25. I went through bankruptcy abt. two yrs. ago and I asked attorney to include student loans; he refused saying they aren’t dischargeable. I requested to include them any way incase legislation changed, but he wouldn’t. The one yr. time frame has elapsed to include them now and I wish to try due to old age and extreme economic hardship. Is there anything I can do to have him re file or something? I also wish to ask if a school has a loan that they have never charged interest on, is it a valid loan to discharge (I believe it is a bank loan).

    Thank you so very much for this news letter and your response. Sincerely, Ray

    • Hi Ray,

      I would speak with another attorney to find out if it’s possible. You may be too late, but it’s worth getting a second opinion at this point.

  26. Daniel Siden says:

    This is an amazing blog. A great resource so thank you for running this.

    I’m from San Francisco, but I’ve lived in London now for 12 years. II have two loans with NCT (BofA is the guarantor) and AES services the loans.

    I’ve paid off my federal loans and I’m up to date with my NCT loans. I’m a good customer in their eyes.

    But I’m about to have a child, and I know that it’s going to become almost impossible to keep up with my loans. I pass a lot of the requirements for the tests stated above.

    My mother is a co-signer, retired on a fixed income, so she can’t bare the burden of the loans now that she is retired should I fall behind.

    I’ve tried to remove her as a co-signer but they NCT simply don’t even offer that as an option to anyone I’m told. They also won’t consolidate or re-negotiate my terms.

    So I want to pursue having them prove they own the loans in the first place, as much of that paperwork gets lost along the way. Any advice on how I can go about doing this? Any advise on groups or law firms that can help with this?

    I’ve already requested the original promissory note from AES. They say it’s in the mail.

    Many thanks for any advice!

    • Hi Daniel,

      You need to speak with an attorney from the US about this, and see what they think you should try. Find one who’s local to the company you owe the money to, and ask them for advice. You won’t be able to get the debt discharged on your own.

  27. HI Tim,
    Firstly, this site and blog have been so helpful to me. Thank you for your advice. I’m struggling to make payments on my 100k + student loans. I am a teacher, and after having my children, I had to put my loans into forbearance. Since then, I have not been able to make full payments. Initially, I had called my lender LoanScience and ACS to try for lower payments and was blatantly told that it could not get help making lower payments until I missed 3 consecutive months of payments. So, I asked them if that’s what they were advising me to do and they said yes. I missed 3 months of payments and then the harassment started. I’m talking about calls at 11 pm and 3 am, not to mention 3 times a day in between. Finally, an account manager called and propposed a lower payment option. Pretty much, I could pay 1/2 my payment for 6 months with no fear of default or credit tampering. I asked more specifics, but they were very vague. Since I didn’t want to go to default, I accepted. As I checked my account, though, my loan debt has sky rocketed from the compounding interest. There is no way I can still contribute to my household bills and support my children while paying these loans. I am very frustrated, but have my husband for support. My real questions come from the legality of names on the loans. I am the sole borrower on my loan. The only other asset that my name is on in regards to the household is my mortgage. When looking at bankruptcy or discharge, will my husband”s income be considered even if he’s not on the loan? My 3 children and husband’s benefits all come from my pay, as well as 1/2 the household expenses. I try to pay whatever we can after the cost of living. Please help! Any advice you can give me is appreciated.

    • Hi There,

      I’m sorry to hear about what happened to you, but your situation is not unique (if that helps). The first thing I’d do is consult with a local attorney to find out if you can reverse the additional interest costs that caused your debt to skyrocket due to the bad advice. I doubt it’s legal for them to steer you the wrong direction with faulty information, then ramp up your costs/fees as a result of you doing what they were advising you to do. That is the first possible thing to look at when deciding what you can do to get some assistance here, and secondly, I’d consider pursuing a Bankruptcy Discharge (ask the same attorney for advice on that), because a sole income generator with 4 dependents (3 kids and your husband), you may have a shot at passing one of the undue hardship tests.

  28. Hello,
    I have a few questions here hopefully you can answer. I attended a well known Art School In Chicago from 90-95 with the belief at that time that after finishing school I would be able to earn somewhere between 5-60k a year. At the time I was married and my loans and grants were based on his income he was a truck driver. the marriage was a disaster and I was divorced by the end of ’92 approx. two yrs after getting married. However I continued at the school fulltime for the 5 yr period. I made the mistake and was not advised to take my gen eds at a community college but to take them there which is what I did. I had an internship after school securing a job I think at that time I was making maybe $6.50 an hr I really do not know maybe it was around 16-18k. Through out the years being hounded by Sallie Mae and Illiniois Student Loan whoever they are. I tried several times I put my loans in deferment, forbearance, unemployment forbearance, consolidating the loans etc. Never understanding that the interest would still accrue. The last time I had a good paying job or so I thought was in about 2005-2006 where I once again tried to rectify by agreeing to do a loan repair for one year where they would take out money from my check and in one year I would no longer be in default and would be in good standing on the student loans. Evidently this was a different company that had bought the loan from Sallie Mae after 8 months they sold the loan back to Sallie Mae I guess who immediately tacked on another 50,000.00 for nothing. I have never been able to make the payments nor will I ever be able to make the payments and when they did that I decided that was it and they will never get another dollar from me EVER. The threats that my credit will be ruined that they will garnish my wages etc. My credit is ruined, I have been living under poverty level since that job which I was wrongfully discharged from shortly there after. I went to work for myself as a freelance artist and have been surviving since that way. The original principal on the loans is 27,000.00. The Illinois Student Commission amount is 170,000.00. Even if I could afford the payment which is damn near the amount I pay for rent I will never live long enough to pay this loan off. I am not even sure at this point which is Sallie Mae and what may be Fed loans or what that 170,000.00 is for or justified…can you give me any answers. I was told several yrs ago it is not impossible to file bankruptcy on student loans but very difficult. I have been living on between 5k-15k for the last eight yrs I don’t even have a car….Suggestions please

    • Hi Deb,

      The good news is that while your situation may be extremely stressful, I think you may have the best shot at getting a Bankruptcy Discharge that I’ve ever come across. Owing nearly $200,000 in student loan debt, and making very little in income, is a good situation to be in when it comes to satisfying the conditions of the “undue hardship” test.

      If I were you, I would consult with a local attorney who specializes in bankruptcy laws, and who has experience specifically with student loan concerns. Do some Googling and try to find someone (an individual lawyer, or perhaps an organization) who will take on your case pro bono. Maybe even try contacting the attorneys mentioned in recent major student loan debt bankruptcy cases (again, use Google to find their names), and see if they can help, or refer you to someone who can.

      I think you’ve got a chance at having this debt discharged, and there’s no reason for you not to file bankruptcy since your credit is already ruined anyway, and will never be repaired until these loans are dealt with, so I would say go all-in and try to get this thing worked out.

      Please do come back and let me know what happens. And thank you for visiting.

  29. Hello,

    I’m seeking out to get some advice on what to do about my student loans. I have about $150k In both private and federal. I started school in 2007 to obtain my RN degree but had to stop in 2010 due to medical reasons. I recently graduated with my LPN degree this past may and got a job that will pay me $41k per year. I sat down and did the math to figure out my financial situation and have no extra room for my student loan payments (1400k) for both monthly for the minimum payment. I have my son that will be going into daycare so I can work but daycare isn’t cheap so I don’t have extra money for my student loans. I’m unable to live a standard living with these student loans either. I’m wondering what options there are for me ? I’ve thought about consolidating my loans but wondering if bankruptcy could be an option ? The only thing I’m concerned about is that my parents cosigned on my loan and know they don’t have the extra money to help me ! Also can you really file bankruptcy on student loans? I’ve read stories that you cannot ! Any advice would be wonderful.

    Jessica in MN

    • Hi Jessica,

      You’re going to need to consult with an attorney, or a private organization like the Student Loan Relief Helpline (call them at 1-888-694-8235), to get advice on what you should do.

      The good news is that you should be able to deal with the Federal loans relatively easily, because you’re likely to be eligible for all sorts of excellent benefits like the Federal Government’s Income-Based Repayment Plans (look at PAYE and REPAYE), Deferment Programs, Forbearance Programs, and potentially Loan Forgiveness Programs.

      Also, since you’re an LPN, you may qualify for some of the excellent Nursing Student Loan Forgiveness Programs currently out there, so I’d definitely look into those as well.

      And finally, you may want to consult with an attorney who handles bankruptcy cases, and who has experience in student loans specifically, because owing $150,000 in student loan debt, and having a dependent, may make you eligible for passing one of the “undue hardship” tests, which would allow you to discharge the debt completely via bankruptcy proceedings.

      So – good news… you do have options!

  30. I am a 61 year old former student. I exhausted my federal student loans, so I had to get Sallie Mae private loans (smart loans). My wife and I raised 7 children, and now the children are grown. Inspired by president Obama, I decided to continue my education.

    Sallie Mae offered me what they call “a smart loan” I believed that since this was Sallie Mae that they would work with me in paying back my student loans. I later discovered that Sallie Mae doesn’t work with students like they did with the federally backed loans.

    Both my wife and I are on social security disability, and with a house note of $589.00 a month, and private student loans totaling $554.00. My SSDI check is for $1377.00 and my wife (co-signer on my smart loan) is $840.00. I have only two options; file chapter 7 bankruptcy or use a reverse mortgage.
    Student loans cannot be discharged in bankruptcy, so a reverse mortgage is my only option.

    Sallie Mae is adamant that they do not work with students with their student loans (unless you default). I am sorry that I was inspired to finish my education. We are constantly told to get an education, and I truly believed that this was a noble goal.

    The reality is that federal student loans are good, because they will work with you based on your income, but Sallie Mae smart loans do not care what your situation is. My co-signer on my smart loan is also on SSDI.

    Do you have any suggestions? The reverse mortgage company told me that I would not get any funds for a reverse mortgage because of my credit history. I have nowhere else to turn. Any suggestions?

    • Hi Prince,

      Sorry to hear about your situation. I don’t have any great advice for you on this because Private Student Loan Debt is notoriously difficult to deal with, except that I will say that it’s not true you can’t get it discharged in bankruptcy.

      Have you spoken to a local bankruptcy attorney? It’s definitely possible to get private student loan debt discharged, though it’s not an easy process.

      I would start with that and see if you can find a lawyer who’s experienced in this, and confident in taking on your case.

      As a last ditch effort, why not simply refuse to pay Sallie Mae? What are they going to do? Garnish your Social Security checks? Would they be taking more or less from those checks than they want you to pay each month? It may make sense to do a strategic default here.

      Please speak with an attorney before determining how to proceed, and good luck.

  31. Good Afternoon,

    First I’d like to thank you and those who work with you for maintaining such a thorough place for information regarding Student Loan Debt.

    My story is similar to most: took out a ton of debt for college, I currently have around 23k federal that is current and on an IBR, 50k worth of private student loans, and around 14k in credit card debts.

    Around 2 years ago I was unemployed for the 3rd time since graduating college and had already exhausted all of my forbearance with the private loans.

    After researching for weeks using sites like this, I determined that the best solution for me would be to strategically default on everything at once and prepare to file bankruptcy.

    Well I had been holding out hope based on rumors that the requirements for discharging private student loans would relax and I see that they have but I’m not quite sure I have enough to successfully pass the brunner test.

    I’ve been perpetually unemployed or under employed but am now working and making 35k base with 4k in bonuses. I still live paycheck to paycheck but atleast now I’m not having rolling panic attacks when all of my bills are due. Prior to my strategic default I was making minimum payments on 7 different lines of credit (some loans some credit cards).

    Now I am being sued by citibank for a credit card I defaulted on and I want to determine my best course of action.

    My main question for you is your thoughts on what would happen if I were to file bankruptcy now, have an adversarial proceeding and get denied, and then within the next few years the laws change regarding bankruptcy and private student loans. Is there any precedent to re-opening a bankruptcy case due to a change in the law?

    This entire experience has forced me to essentially live off the grid credit wise for the next decade and I’m completely fine with that, I never want to owe anyone money again, however I want to make sure I plan my next steps accordingly.

    In my research I have gained the confidence that I believe I could file for chapter 7 and make it through an adversarial proceeding on my own, I believe absent representation could also go a long way in satisfying the undue hardship requirement. I feel as though all of the information necessary is available to me on the internet and with enough time and thorough preparation I could navigate the process pro se.

    Any thoughts or guidance you may have after this long winded story would be much appreciated. I’m still looking for attorneys in my area to perhaps offer a free consultation, but I would feel guilty abusing a free consultation knowing that I’m aiming to navigate this process on my own.

    Thank You!

    • Hi Charles,

      I think you’re going to need to speak to an attorney about your situation. I think you’ve done a good job researching your options, and that you pretty much have things figured out for yourself, but I wouldn’t risk your financial future without consulting with a local expert.

      Student loan law and bankruptcy laws vary by state, and get enforced differently in different regions within states (sometimes varying wildly from judge to judge), so I don’t want to give you bad advice and put you into an even worse situation than you’re already facing.

      My advice is to consult with a local attorney, find out what they think will happen with bankruptcy and student loan laws, then determine how to proceed according to their analysis.

      If I were to guess, I would speculate that the laws will be relaxed and that we’ll likely see MORE student loan forgiveness and MORE leniency in the future, but there’s no way of knowing for sure.

      I hope you’re able to find a workable solution here because you’re definitely in a sticky situation, but think you’re doing a good job of sorting this out and you just need to get some advice from a lawyer before determining how to proceed.

      Don’t worry about “abusing a free consultation”. That’d be a foolish reason to make a huge mistake which could literally ruin your financial future.

  32. Hi Tim,

    I graduated from culinary school in 2005 with a degree in culinary arts from the CCA in San Francisco. Right out of school I started working in the industry which is great, but I was not making very much mind you and definitely not what the school had promised I would be making. I have been struggling to pay my student loans for 10 years now and have only made a slight dent. My loans at the time of graduation were over $100K with fluctuating interest rates that I literally wanted to kill myself even thinking about paying them. I was paying almost $1000/month for these. Well things got a little better when I was part of a Class Action Lawsuit in 2011 where upon the closing of that 2 1/2 year long case, I only received close to $2,000. That’s it. Right now my loans, after coming down in interest rates are at $75,990.02 (private loan at 4.25%) and $5,569.92 + $$4,016.05 (federal loans, both at 2.875%), totaling $85,575.99 that I still owe. I am so frustrated with these loans, as you can imagine. I work hard, 2 jobs in fact, but I still don’t make a lot of money. About $25,000/year. I would like to know if I would be eligible for a Chapter 7 student loan discharge or any other type of student loan forgiveness. Thank you so much for taking the time to read this!

  33. Hi, i work for a school that is for getting your CDL lis for truck driving and the company does all the financing in house which would be considered a private student loan I believe is that right?

    Anyway, I need to know for one can a student file us as a creditor in their BK 7?

    For two, if they did not include us in their, can I continue civil suit against them while they are in the process of their BK 7 or do I have to wait?

    From what I have been reading it loks like you can not file Bankruptcy on any federal student loan or private student loan? do you know if there is a Law which I can look at for that?

    Thank you so much

  34. Hello Tim,

    Unfortunately I made some bad decisions in regards to student loans, and racked up 130k in private debt. Currently I work for a federally chartered NPO making 46k a year. The monthly payments exceed 1,600 a month not leaving much for living expenses. My job search has been exhaustive to say the least. I’ve applied to over 10k job since my graduation in 2012 with a BS in accounting. I’ve worked out a payment arrangement with my lendors but at this rate the loans will never be paid off. How do my options look

    • Hi Steven,

      To give you the honest truth, your options don’t look very good.

      Private student loan debt is notoriously difficult to get discharged, and if you’re making nearly $50,000 per year, I would have trouble thinking any court will side with you in allowing you to wipe that loan out.

      However, if I were you, I’d still consult with an attorney and see if he or she thinks there’s anything that can be done here. It’s always worth getting an opinion (or even two or three opinions), because you never know what you might find.

  35. I have 2 private student loan that equal to 85,000. I was told that each day loan 1 intreste rate is $4.60 & loan 2 is $5.40 a day! I tried setting up a payment plan with the third party and they told me if I were to pay $300 a month, I’m not even touching the principle. They just want there money. They told me it was possible for them to lower it to 35,000 if I could pay it in full, but I don’t have that kind of money. I am a wife and mother of 2. I make about $21,000 a year. My mom was my cosigner but unfortunately she is not able to help? Is it possible to file for Chapter 7 and these loans get discharged?

    • Hi Lauren,

      Based on your income, your debt, and your family size, I think you would have a very good chance of getting your loans discharged, but you will need to speak with a local attorney to find out for sure.

  36. I have around $120M in student loan debt, some federal, mostly private. My degree is in criminology and I have never been able to find work in that field. I have had ten jobs since 2006. Some of which were second jobs waiting tables at night to try and make ends meet. I married right after college and my spouse had not graduated college and could not hold down a job. I was forced to file a chapter 13 BK in 2011 when my spouse lost yet another job. I was the primary source of income for our family throughout the marriage. I then supported my spouse while he attended college. Once he graduated, we divorced (2013). I have been laid off twice since filing my BK, but have still made all payments on time. Last October, my ex-husband was killed in a car accident. I am now raising our 8 year old son alone. I have been able to keep my BK payments current, I have a credit score over 700, and I was able to purchase a home last year, all while in my Chapter 13. Due to the tragic loss of my former spouse and father of my child, I have had some issues with my employer. I was fired from my job this week and told that my employer would contest my unemployment benefits. I only have 8 months left in my payment plan. I would like to request a hardship discharge from the plan that would include all student loans. My son is obviously having difficulty with the loss of his dad and will call me crying from school asking to be picked up early. I am having difficulty finding work that will allow me the availability I need as a mother. Do you think I will have any success getting a hardship discharge for the BK and student loans? Also, my father is a co-signor. How will this affect his credit?

    thank you,

    • Hi Brandi,

      I’m sorry to hear about the situation you’re facing – it sounds extremely stressful!

      I would speak with a local bankruptcy attorney before determining how to proceed here. I would like to say “Yes” to your question, but I don’t want to steer you the wrong direction. This is an important decision with far-reaching financial/legal consequences, so you will need to make it wisely.

      Wish I could be of more assistance, but I don’t want to cause more difficulty for you.

  37. Chris Burns says:

    I made really bad choices 2003-2007 by taking out private loans. I decided to go back to school full-time and then attend an Ivy League school for grad school. My total private loan balance was originally @ $75k. Since graduating school in 2008, I’ve been unemployed, got a divorce, and ended up with additional credit card debt.

    My ex-husband is cosigned on 2 of the 4 private loans I have. He pays on those because if I default it affects his credit. However, he initially only agreed to help me for 2 years when divorced and it’s now been 5. I still can’t afford to pay that portion of the loan. My total payments a month would be @ $700 (@ 30% of my income).

    I had to put my federal loans in forbearance because they wouldn’t work with me on decreasing the payment amount. They also don’t take private student loan debt into consideration so their Income Based Repayment plan is still too high for me. In any case, the original loans totaled @ $75k, we’ve paid out $47,900 in principal and interest payments, the balance is now $81K. I don’t know what to do.

    I probably wouldn’t qualify for bankruptcy given what you said. My gross income came to $39k last year. I have no dependents. My credit card debt is in consolidation. If I made more than that, my IBR with federal would just go up. I don’t know what it is I want you to tell me, but I’m feeling a bit desperate. I live paycheck to paycheck. I work 2 jobs and if my ex wasn’t paying a huge chunk of the private loans, I don’t know what I would do–default. I’m trying to do the right thing.

    If I were to default on either private or federal, would they garnish my wages? Or if I paid only the ones he’s paying on now, and defaulted on the others, would they garnish my wages for those? I just don’t understand how it is we’ve paid out almost 2/3 of what we originally owed and yet owe more than we originally borrowed? I’m at a loss and can’t breathe. According to the final payment due dates, I’ll be almost 60. Any thoughts?

    • Hi Chris,

      You’re in a tough spot and I don’t have any really good advice or news for you, unfortunately, because student loan debt is ridiculously difficult to get rid of once it’s been accumulated.

      The reason you still owe so much is because of the way that compound interest works – you’ve been paying off less than the interest accumulation each month, so your debt has been growing, rather than shrinking. This is the most dangerous aspect to borrowing money, and one that people don’t think enough about before taking the plunge into inescapable debt.

      If I were you, I would still attempt consulting with an attorney to see if you could have your debt discharged via bankruptcy. Even if you could get rid of only the Federal debt, or the Private debt, that would still be a major victory. It’s unlikely that this is going to work, but why wouldn’t you at least explore the opportunity just in case?

      To answer some of your questions – they might garnish wages if you defaulted and ignored them, but they might just forget about it and write your debt off too. I’ve heard from many people who simply stopped paying and never experienced anything other than a big hit on their credit report. You’ll need to speak with an attorney about this though, as I’m not legally able to give advice on the matter.

      Good luck, I’ll keep my fingers crossed for you!

  38. Tonya Brown says:

    Hello Tim,

    I am currently being sued for student loan default from NCT in NYS. My fears are that since I can’t afford an attorney to fight them since I never took out loans with them that they will win and start to garnish my checks. Which I’ve read that you can be fired if it’s more than one. I have several.

    I currently make 38K before taxes. My loans total about 200K. I still can’t get my degree because I owe the school. It’s hard to make more money because most of the jobs that pay more require degrees. During this time I’ve been assisting my mother who is on disability. I have no children and my health is fine. I pay rent and also have credit card debt. By then end of each pay check I have very little left. I have no savings and no assest.

    I know I need to see an attorney but wanted to get your opinion on this.

    • Hi Tonya,

      I think you have a good shot at getting a bankruptcy discharge since you’ve got so much debt, and are making so little money. I would speak with a local bankruptcy attorney to get their advice on how best to proceed.

      Also – if you’re being sued, then you probably do need a lawyer anyway. Find someone who can handle both of these issues at the same time to reduce the amount of money this will cost you.

  39. Francesca Lo Iacono says:

    I have close to $110,000 in student loans, one federal the rest private. I have called my private loans to see about any help to do any income based repayment options and hald the time they are rude and tell me that I am lucky they have helped me with lower payments for the past few years and my monthly payment will be going up another $200.00 per month in October.

    I only make $34,000 a year and another option my loans have for me is to go back to school, which I find ridiculous considering I can’t afford the loans I have now, let alone adding some more on. I live in New York and I know most lawyers will tell me bankruptcy probably isn’t an option, but is that because they have not done anything with student loan bankruptcy?

    Is there any advice for me or would I possibly qualify to do bankruptcy for my loans?

    • Hi Francesca,

      It sounds like you’re in a pretty tough financial situation here. I would consider going after the bankruptcy discharge, but only after speaking to a local attorney who has experience dealing with student loan debt and debt discharges.

      You make very little money, and you owe a ton, so you may fit the profile for someone who can receive a discharge, and if that were the case, then it would definitely be worth pursuing.

  40. Hello,

    I have been paying my wife’s student loan payments since 2007 she has never had enough income to make the payments. She went to Embry Riddle and she also took out private loans to pay for multiple pilots licenses. She has been unemployed since Jan 2015. I have paid over 80K and she still owes 86k of the 100k that was borrowed. All but 15k are private loans do we have any options as I make 96k per year but these are definitely becoming a burden.


    • Hi Justin,

      It sounds like you’re making too much money to qualify for a bankruptcy discharge. You’re going to have to speak to a local attorney to get a solid answer though – it really depends on where you live, how the courts are handling these sorts of requests, etc., and I cannot provide legal advice.

  41. Kathryn F. says:


    My husband and I both attended school at Le Cordon Bleu for culinary degrees. Out of the gate after graduation Sallie Mae wanted $800/month from both of us for each of our loans. I was making 9.00/hr at the time, and my then boyfriend was only making 10.00/hr himself. Anyway, we scraped together some payments, and used their various repayment programs to lessen the blow, and still ended up in default. Fast forward 10 years, my loan is somewhere to the tune of $123,000 and his is a similar outrageous number. Our loans have both been sold numerous times to different debt collectors. I recently received a settlement offer of $32,000 for my loans, but alas that would only create another loan for me (assuming anyone would loan).
    Anyway, the problem is, I’ve been at my job for almost 10 years, and worked my way up from the very bottom. I’m now a manager and make more money than could be called “poverty” level. My household generates around 80,000 a year, but our bills are crippling us. I have at least 2 other student loans that we are paying in full. Is there any hope of bankruptcy here? Thanks!

    • Hi Kathryn,

      If you guys aren’t near the poverty line, then there’s probably no hope for having your loans discharged via bankruptcy.

      I’m sorry to be the bearer of bad news, but it’s still pretty difficult to get rid of student loan debt by filing for bankruptcy. If you can’t pass the “undue hardship” test, then there’s no way they’ll let you wipe out the debt.

  42. Hi Tim,

    My current Student loan debt figures at about $125,000 with about $75,000 of that being private loans. In 2011 after graduating school and getting a degree in Graphic Design I moved to the UK, wife is English, and began working at a design agency. I currently make approximately $33,500. It varies depending on how well the pound is doing compared to the dollar. This also makes paying my loans tricky as I have to pay a fee every time I convert to US dollar. I started paying and have been paying my student loans since graduation. My federal loans have been on an IBR plan and are very easy to manage at $50 a month. My private loans are the tricky ones. They account for almost $700 a month, interest only.

    When it was just my wife and I, the private loan payments weren’t so bad but as our family has grown, 1 child now and one on the way, the finances have gotten tighter and tighter and it’s not becoming a bit difficult to afford and maintain a decent standard of living. I’ve tried to consolidate my private loans but as I’m not living in the US it’s difficult because I have basically no credit there or it’s bad credit because of the student loans. The loan companies are no help in that department so I’ve looked at bankruptcy as a way to organize my private loans. I’m not worried about my credit score as it won’t effect my credit score here in the UK. Any suggestions or advice would be great.

    Thank you.

    • Hi Bryan,

      My best advice for you on this would be to speak with an attorney. You’re straddling international barriers here by living and earning in another country, while trying to wipe out debt from the homefront, and I have absolutely no idea how that will play into things, but I’m sure it’ll be looked at.

      I think you might have a shot, but it sounds like you’re making some decent cash and that may get in the way of a discharge. I honestly just can’t tell you how this will play out because I don’t know what sorts of information the banks here will be able to require you turn over, but I’d definitely talk to an attorney to see if they can sort this out for you.

      Good luck!

  43. Where or what website can I find a discharge or litigation bankruptcy attorney for my private student loans by Navient lender in Aliso Viejo, CA or Orange County area?

    • I’d try Google or Yelp. Read reviews of what other people have said about potential attorneys, and call at least 3-5 before deciding who you want to see in person. Treat this like an interview.

  44. Hello!

    In a Chapter 7 bankruptcy, when does the adversary proceeding need to be filed? Does it have to be before the 341 meeting?


  45. joseph nelson says:


    Looking for advice if i might qualify for private student loan forgiveness. I went to the Art Institute of New England which is a part of EDMC which is being sued by the federal government for defrauding the government and students.

    I went there because audio production wasn’t offered at any accredited universities in my state. I am not in the hole for $55k for a degree that is worthless. Since leaving there six years ago, never been able to find a job in that field.

    The school defrauded me and thousands of others lying about their success rate and overcharging for their program. The quality of education was not worth the outrageous cost.

    I have made more than a good faith effort to pay it all back. I tried consolidating my loans multiple times, both on my own and with a cosigner and didn’t get approved.

    I have made my payments on time for the last few years. Now I am at a point where it’s too much to pay my loans and live reasonably.

    My take home after taxes is about $25k but I pay taxes to two states as I live in CT and work in New York. I can’t afford the cost of commuting, paying my loans and simply living. I have tried to work with my lenders, but they have done nothing to help me.

    • Hi Joseph,

      Only an attorney can give you advice on a legal matter like this. It sounds like you may have a case though. I’d contact a local lawyer and see if they will help you file bankruptcy and pursue the discharge. Good luck!

  46. Hello! I was wondering if you think there would be any chance that my husband and I might be able to get some of our student loan debt discharged? I graduated with a BA in Liberal arts and currently gross $28,400 per year. My husband grosses about 24,500 per year but his check is being garnished by his federal student loans. I owe $88,000 in federal loans (they’ve grown ALOT since I first started school in 1997) and about $70,000 in private loans. My husband still owes $18,000 on federal loans and about $55,000-60,000 in private. We have one dependent. Our income tax return is taken every year for the federal loans as well. Unfortunately, we were never able to make any payments on the private loans because once they became due I was not working and he was the only provider for our family. Now they are all defaulted and divided up between multiple collection agencies and we cannot make payment arrangements because they want it all. I am planning to set up a federal loan consolidation for us to get those out of default but I don’t know what to do about the private loans. We can barely make ends meet as it is. Any suggestions?

    • Hi Melanie,

      Sorry to hear about your situation. I don’t want to steer you wrong, but it does sound like you may have a shot at a bankruptcy discharge. Your best bet will be speaking with a local attorney who has experience in the field, and asking them what they think your chances are.

  47. I filed bankruptcy in 2011. My private student loan was discharged and approximately 2 months later I received a letter from department of education stating I was denied and I’m fully responsible for my loan. Is that possible for them to deny me after it was discharged? I’m having a difficult time paying them due to financial hardship. …what can I do??

    • Hi Nancy,

      It sounds like maybe there was some confusion – if your private student loan was discharged, then you shouldn’t have received a letter about it from the Department of Education. If you got a letter from DOE, then perhaps you have a Federal student loan that you still owe money on?

      Is it possible that you had both private and public loans, and that only the private loans were discharged? You’ll need to look into it further, but that’s what it sounds like is going on to me.

  48. I’m so stressed. I originally borrowed 45k to attend a fashion school. I never graduated and now i owe 184,000.00 due to putting my loans on forbearance. I didn’t graduate because i had to find a third cosigner and i was not able to. Im stuck in a customer service job making $16 hr or $33,500.00 a year. I have a child and im a single mom. I take home $800 every two weeks. From that i pay my rent $650 a month. I pay daycare 480 month. I pay car payments, car ins, electric bills, phone bill, medical bills. I don’t have extra income to pay the $700 minimum payment that sallie mae wants me to pay. My cosigner is 58 and doesn’t have any extra money to help me. My other cosigner has 3 children and is basically on food stamps and cannot help me. I try to pay sallie may but all i did was get behing on other bills to pay them. I don’t see a way out. The school i went to wasn’t accredited the credits do not transfer i had to start over in a new college but its hard because I can’t stop working because i got a mouth to feed. I don’t get child support. Im alone drowning sometimes i feel my only way out is death. Can someone give me guidence as to what i can do? I can’t consolidate because have bad credit due to the loans, I don’t get food stamps or child care assistance because I don’t make $11 hr.

    • Hi Alma,

      I think you might be able to qualify for a bankruptcy discharge, since you owe so much money and are making so little. I would consult with a local attorney for advice on how best to proceed, but your story is basically the exact scenario that bankruptcy discharges were created to help with.

      Don’t give up! Call a couple attorneys today to tell them your story and see what they think. Just give the basic facts:

      1. You owe $184,000
      2. You make $33,500 per year
      3. You are a single mom, with one dependent
      4. You have cosigners on the loan, but they can’t help

      That’s all they need to know. They will be able to determine whether or not you have a shot at getting the loan discharged. (Don’t give up if the first one says no chance, because they may be wrong. Contact 2-3 and only stop if they ALL say no, absolutely no chance.)

      Good luck!

  49. My debt figures in at around $220,000, all in total, between federal and private.
    Federal loans are currently in deferment, following a recent consolidation.
    Private loans are completely out of control, and I am currently being threatened with default, having been unable to render payments for about 6 months.

    I am an artist and a teacher. Since finishing graduate school in 2007, I have only had one year where I was able to piece together income over $30,000. And, during that time, i was managing to make interest only payments that were sometimes over $550 a month.

    The circumstances have changed drastically. At times, I now bring in just about $1,200 a month, and at last check about $470 a month is being demanded. Which with rent and other basic expenses is simply impossible. Just. Simply. Impossible.

    I have steadily and consistently applied for both full and part-time work. This required leaving some of those part-time duties, but I have since returned. I have interviewed for full time positions, but have not been selected. And, I have put over five years in at my part-time teaching job, but there is no sign of true advancement in the near future. But, even at part-time, and even at low income, it is steady. So, I can’t just walk away completely.

    Is bankruptcy a real option for me?
    I live in Rhode Island, but originally resided in New Jersey at the time that all of these educational loans were taken out?
    And, again, my ONLY debt is educational.
    I don’t have credit cards, I don’t own or lease a car, and I have been uninsured since 2009.

    Do I have any options?
    According to the private loan company I am out of options, other than to just pay up, or have my financial and professional future destroyed.

    • John, I’m going to be blunt with you – you made an absolutely terrible decision borrowing that much money.

      You are not going to find a magic solution to this debt. You borrowed way, WAY too much to become an “artist and teacher”, and you’re going to need to look at filing for bankruptcy to get rid of this debt.

      I just hope that you’ll be able to pass one of the undue hardship tests, because if you can’t do that then you may be absolutely screwed here.

      It’s time to speak to a lawyer. I think you may be able to pass the undue hardship test because you owe so much and make so little. But to the tell you the truth, ONLY a lawyer can give you advice on this, so please make sure you contact someone today.

  50. Hi, I have a undergrad loan that is 110k now. I made an arrangement with SMS after years of not being able to pay the $700 a month loan Sallie Mae was asking me to pay. This arrangement to pay $200 a month was made about 3 years ago and I paid with no problem because they just took it out of my bank account every month. Unfortunately, the $200 was only paying part of the interest and none of the principal and now SMS sold the loan back to Sallie Mae (now Navient). Now Navient wants $5500 down payment to continue the arrangement and I don’t have that kind of money, they want me to ask my ” friends and family ” and I know they don’t have that kind of money. I’m at a loss, they threaten to sue me and garnish wages if I don’t make some type of arrangement which is horrible because I was paying and showing good faith and now they want a large chunk of money that I don’t have just to keep the arrangement of $200. I don’t know what to do. This is causing me so much stress. I’m back in school and getting my Masters in Social Work and I refused to take any loans because of the trauma this has caused me. I’m paying out of pocket with the help of my union paying for some credits….I’m so distraught.

    • Hi Martine,

      Sounds like Navient is trying to push you around. I’m not sure if it’s legal for them to change the arrangement you had with the previous lender.

      I would consult with a local attorney before agreeing to anything with them. You may not have to agree to go with the new deal they want to force on you.

  51. I am a CPA and consistently come across clients with the most disturbing student loan stories. The worse ones belong to parents and grandparents cosigning for loved ones who end up dropping out and leaving them with the bag. Do you think relief is available for borrowers who are not the students and is age a factor in their favor?

    • Hi Angie,

      I do not think that any assistance will be created for co-signers. My thinking is that the only reason we see so much offered to graduates themselves is that the assumption is people were tricked into making bad decisions before they knew any better (at 17, 18, etc.).

      What does a teenager know about the way the world works, and about how much they should be borrowing to go to school? The student loan debt problem has reached critical mass becasue massive banks, colleges and universities prey on the young, naive minds, promising them the world, and charging them an arm and leg for something that many of these borrowers don’t even need in the first place.

      However, I do think that Congress and the general American public would be far more skeptical of seeing tax dollars spent propping up poor decisions made by parents and grandparents. These are people we should expect to know better, and to avoid signing up for loans that are far too big in the first place, or for kids who shouldn’t have been trusted to take on that much responsibility.

      I haven’t run into much clamoring for change on that front – the numbers don’t lie – if you check comments throughout this site, I’m getting questions almost exclusively from the students/graduates themselves. There’s a handful of co-signers in here too, and yes, I do personally agree that it’s a problem that should be addressed, but I don’t think the political resolve is there to actually get anything done.

  52. I am a graphic designer. I attended the art institutes from 2010-2013 and got my bachelors. Have 5 loans 4 of which are private loans. (Was never told private loans are bad by my financial advisor or advised any options to me). I owe over 100,000 dollars. Each loan has 6-12% interest. I have no one to help me consolidate. I wasn’t really able to find a job after I graduated. Eventually I found one where I make less than 18,000 a year after taxes. About 1200 a month. My loans are charging me with 1000 a month. I asked for options to lower my payments but only my 1 federal will. I’m still paying about 1000a month. I live with my bf who pays for the rent, food, and bills with help from his GI bill. I drive his car because I can’t buy one or afford one. I’m not able to help with anything because I can’t afford it. I tried getting a second job but I live in a college town and they only want to hire college students for part time jobs. I got denied by even Walmart. In a couple years when he graduates abs we stop getting his GI bill neither of us are going to be able to afford to live. We are falling through the cracks on every front. And come to find out the school I went to got sued 11 billion while I was there for using tuition for fraud. Labeled themselvesas a private school so they could charge more for tuition. Bribing employees and fudging employment percentages after graduation. I was told by my school that the start off jobs for graphic design were between 45-50k ayear but the only job I was able to find was less than 18k now I’m stuck with no help. I have the portfolio that would get me amazing jobs but they don’t look at that like this school led me to believe. They look at your years of experience. I need help.

    • Hi Rachel,

      It’s time to speak to a lawyer. You’ve got such a low income, and enough debt, that you may be able to qualify for a discharge. You’ll have to spend a few hundred or a couple thousand dollars getting help from an attorney, but it could save you a lifetime of misery.

      I would look into it right away.

    • Rachel,

      The same thing happened to me attending the same school and getting the same useless degree. Would love to know what you find out as I’m currently assessing if I have any options.

    • Do you have a cosigner on your loans? I’m in the same boat and curious of the legal preceding if I was to not pay my private loans. I’m currently at $145,000 from the Art Institute and have already paid $80,000. i can’t afford to keep paying and the amount is only growing despite paying $1700 a month for four years.

  53. I am currently being sued on $190k in private student loans. My husband makes $36k/yr and I am unemployed due to to costs of daycare for 3 young children negating any salary I would be qualified to make. In 2010 we declared bankruptcy, as the business we ran together went under and we were making less than $600 a month doing odd jobs. It was a no asset ch7 and was discharged later that same year. Now they are suing in court, and if they win a judgment the garnishment will make it impossible for us to meet our basic needs. I have heard about reopening a bankruptcy to file an adversary proceeding, but have not been able to track down much information on the process involved. I know there is always a possibility, but I wonder if undue hardship would be fairly easy to prove in our case? I am trying to settle with them now, but they are still throwing out such large numbers that we would actually be better off financially to let them garnish.

    • Hi There,

      I would definitely speak with a local attorney who has bankruptcy experience, and ideally experience with student loan bankruptcy, before proceeding here. I would not settle and would try to get this discharged entirely.

      It sounds like your lender wants to be total jerks about the situation. Remember though, whoever is working your account on their end is probably being paid a commission, so the more they take from you, the more they make.

      These people aren’t necessarily evil, but they are out for their own self-interest. Keep that in mind, do not get frustrated and accept a bad deal, and spend a little money on a good lawyer because they could be your ticket to becoming debt-free.

  54. Hi Tim,
    In 2007-9, at 37, I went back to school to get an MBA for career advancement. I was working full time which required frequent travel, so I chose an online program at an accredited university. However the program was new and unique enough that it was not eligible for Federal student loans. In 2008 I was laid off, and decided to take private loans to finish up, assuming I was making a good investment.
    Between then and now, I graduated, took a job just to be working, had a nervous breakdown meriting hospitalization, lost my Dad, lost my Mother-in-law (three weeks apart), got laid off from a job that actually used my MBA, and my husband was laid off and took a lower paying job. I now suffer from panic attacks, anxiety and severe depression. I don’t want to go on mental health disability because I can work as freelancer, and I want to, but my doctors think I’m not able to work at the level I once did. Our HHI went from $123k/year to $52k/year.
    My husband and I are prepping, with the help of our attorney, to file Chapter 7 bankruptcy. Based on what I’ve researched, my $50k in student loans should be eligible to be partially or fully discharged because of it’s Federal status during the time I attended (coincidentally, the online program is now eligible for Federal loans).
    I’m looking for more information to bolster the position my particular loans could be discharged or partially forgiven based on the program’s Federal status at the time I attended. Any thoughts or guidance of where to look or how to think about it is greatly appreciated!

    • Hi MDZ,

      Sorry to hear about the mess you’re facing. I have two ideas for you to look into:

      1. The Total and Permanent Disability Discharge Program, which you’ll find here. If you were to gain total and permanent disability status, you would be able to discharge at least your Federal student loans. I know you don’t want to go on disability, but I would look into this program just to make sure it’s not a better option than what you’re currently considering.

      2. The False Certification of Student Eligibility Discharge Program, which you’ll find here. This one is a little tricky, but look into the details, and perhaps you’ll be able to qualify for a discharge because: “The school certified your eligibility, but because of a physical or mental condition, age, criminal record, or other reason you are disqualified from employment in the occupation in which you were being trained.”

      I would definitely recommend that you and your husband speak to a lawyer about your chances of receiving the Bankruptcy discharge though. If you two are making $52,000 per year, that is probably going to make you ineligible for a discharge.

      Remember, qualifying for the bankruptcy discharge requires having your life literally endangered by facing too much student loan debt, as in, you can’t afford food, shelter and clothing because of all the money that is being funneled toward your debt.

      Be very, very careful about pursuing the bankruptcy filing, because it may not actually help. A local attorney will be your best bet toward determining the proper course of action here.

  55. I have $75,000 in Federal loans (who I haven’t paid on as I just graduated with my Masters), and I have $60,000 in private loans, which I have been paying $450 on for 5 years (they don’t allow any deferment or forbearance). My federal loans are about to enter re-payment and I do not have money to pay for BOTH loans, rent, car, electric (I do not have cable or internet), and all my other bills when this occurs. I currently make $13.50 an hour, and my bills are larger than my income. However, I recently was offered a new job, and within a few months I will make :40,000 per year (before taxes, medical coverage, retirement, etc). With that pay incease, I cannot afford an addition payment on top of my $450. projected payments over $600. That’s $1100 per month. Is there anything I can do. I will not be able to support myself, yet alone have a family one day.

    • Hi Heather,

      Did you use the Federal Government’s payment estimator and factor one of the income-based repayment plans into determining what your monthly payment would be?

      It sounds like you borrowed way too much money to get your degree. I hate to be the bearer of bad news, but you should have only taken out as much as you expected your first year’s annual income to be, and you borrowed more than three times that amount.

      It’s not going to be easy to pay off this debt. I would speak with a local attorney and see if they think you could qualify for a bankruptcy discharge BEFORE you start earning $40,000 per year.

      Based on your salary of just $13.50 per hour, you may be able to make the case that you literally cannot afford food, shelter and clothing because of your private monthly payments.

      I wish I had better news for you, but only an attorney can give you solid advice at this point. Don’t give up though – you have a shot at getting out of this debt, and you will eventually if you create and stick to an appropriate budget.

      Remember, pursue a bankruptcy discharge on the private debt, and get onto an income-based repayment plan for the federal debt, then make sure that you take the fastest track toward forgiveness.

      My guess is that in 20-30 years you will be completely out of debt, and this will all seem like a bad dream. Don’t give up!

  56. Hello, hoping for some advice.

    I have two degrees, both in variations of Urban and Regional Planning. Over the course of both degree programs, I took out loans to pay for the education. Currently, I am sitting with approximately 250k (a good portion of which is interest at this point) and have been unsuccessful in landing a job in my field. In the interim I was able to obtain a few part time jobs to allow myself to survive, and at this point my private loans with Navient (formerly Sallie Mae) are on the brink of being sent to a lawyer. The best repayment they could offer was 1% of my interest…and unfortunately due to my minimum wage jobs…even that payment is too much. I have some other small debts that have also gone into collections since I began graduate school (I did graduate), and while I know I could file Chapter 7 on those, I don’t know if it worth it if atleast some of the student loans could go with it. I was just hoping for some advice. I currently live in Northern California, but my schools were in other states…I don’t know if that matters.

    • Hi Amanda,

      I would recommend speaking to a local bankruptcy attorney about this, and I do think that you should pursue a bankruptcy discharge. Owing a quarter million dollars, and having no income is about as close as I can imagine to qualifying for one of the undue hardship tests.

  57. Hello,

    I immigrated legally to the U.S. After going into the service, I attended an “experiential” program in holistic psychology in California. The program led me to over 185,000 in student loans (half of that is in private student loans). The school program was 4 years long and students were offered a degree in counseling psych after the second year. English is my second language, and I’ve been on a challenging situation since finishing the program, and through part of it. I didn’t have a clear understanding of the field I was graduating in. The school also inducted students in what they called and “spiritual emergence” enticing students into experiential courses that often didn’t require significant academic engagement or applications to the mental health system. After about 7 years in the field working as intern, I had to take an extended personal medical leave, and a family leave for around 1 year (total permanent disability for 1 year). I filed a complaint with WASC senior but they wouldn’t process it because of the time it’s passed since I was in the school. I then lost my job, and was unemployed for close to 3 years. I came back to work but with disability (generalized anxiety, complex grief, major depression) accommodations. My wages last year were 17,000 ( unemployment) and my salary now is around 57,000 but it barely gets me by in the bay area, and had to request accommodations because of challenges in it with my condition. My immediate family is in south America, and I wasn’t able to travel home partly due to this. I’m looking at transferring to another job because the work in mental health and with my condition is very challenging. I’d appreciate any advice you can provide.

    • Hi Enrique,

      I would recommend speaking with a local bankruptcy attorney to see if they think you could qualify for a discharge. It sounds like the school that provided your education was quite the scam operation, and you may have a good chance at getting those loans discharged because of it.

      Check out the section on this page called “How Does Private Student Loan Bankruptcy Work?” and look at the three conditions that make it easy to qualify for a discharge. The first and second condition may BOTH apply to your case, making the odds much better that you could get the discharge and never have to pay back the rest of your loans.

      Again though, only a local attorney can advise you in these matters. I am not qualified to offer legal advice, so I can’t steer you in any particular direction, but I would take this to the lawyer and say “Will this work?”.

      Considering you owe so much money ($185,000 is not laughing matter), it would be worth spending $5,000 or even $10,000 with an attorney to get this taken care of.

      Thank you for your service Enrique, and good luck!

  58. Hello, I need help. I have been paying on my private student loans for 30 months. My first payment was 847.00. I was put on a payment plan through Navient, then Sallie Mae and I paid 575.00 for 15 months. 625.00 for 6 months and then the last 8 months I have been paying 612.00. I can’t keep doing this. All my bills are behind, one credit card just got closed because I can’t stay on top of it with the finance charges and stuff. I don’t even use it.

    I have tried to consolidate them, but no lender will consolidate them because my credit is bad, BUT my credit is so bad because of my student loans. I am an Indiana Social Worker and I don’t make enough money to live and continue paying this much. Navient has told me they will not lower my payment and it will go up at least 1%. I am so stressed financially I can cry at the drop of a hat. My parents help me when they can.

    I joined the National Guard, partly to help pay for my student loans but to find out because my mom cosigned on some, they will not help pay them. I am out of NG now. I just don’t know what to do. I have looked into bankruptcy a little bit, but it’s not even that I am trying to get out of paying them. I just need my payment lowered. No matter where I go to I always get shot down and told there is no help. Any advice? help?

    • Hi Marisha,

      It sounds like you need to pursue the bankruptcy option since you’re run out of other avenues.

      There’s no magic bullet here. You borrowed way too much money and are unable to pay it back. The sooner you recognize that’s the problem, the sooner you’ll be able to deal with it, get it resolved, and start living without all this stress.

      Talk to a local bankruptcy attorney, tell them your situation and ask them how to proceed. If you have any chance at passing the undue hardship test, then go for it. Get those loans discharged and move on with your life!

  59. Hello! I have a quick question. I’m wondering if I stand a good chance to qualify for a discharge or even reducing my debt. I have no job and can’t seem to get one in my field of study (game design) so my private student loans are being paid by my parents and they are barely scraping by. The loans have such high interest that my parents are only able to make the minimum payment ($700 a month) and in turn the loan amount doesn’t go down, in fact it increases by the end of the year. I’ve been making $0 a year and my parents make around $38,000 a year. Any advice is greatly appreciated.

    • Hi Liz,

      I wish you hadn’t gotten a degree in that field… you will probably never be able to make back the money you invested in such a niche market, but a lot of others have been tricked into doing the same thing by fancy marketing programs and deceitful promises.

      How old are you? It sounds like you may have just graduated, or recently graduated? I do not think you’ll be able to get a discharge because it sounds like you’re young, and so you’d have plenty of time to get a job and work at paying back the loan.

      It doesn’t matter if you can find a job “in your field of study” or not – your responsibility (in the court’s eyes), will be to find stable employment and start paying off the loans.

      However… because your loans must be pretty large (if $700 if the minimum payment), it MIGHT be possible for you to get a discharge. The only way to find out for sure will be to speak with a local attorney. I would recommend that you do that as soon as possible.

      And get a job doing something, whether it’s game design or not. Being unemployed and trying to claim that you just couldn’t land a job in your field is not going to help you win the favor of the court. They will think you’re lazy.

  60. shelley m. says:

    what is a private lenders. Got my loan from D.O E. And went nelnet, Sallie Mae. Is this a private loan.

  61. Hi,

    Thanks for your help! My husband and I owe a total of $300,000 in student loan debt. Our monthly payments are over $1,600 a month. We are a family of four and our monthly income is not enough to cover everything, morgage, car, health insurance, etc. Our income last year was $75k before taxes. I am seriously depressed and cannot stop thinking about this massive number. Our private loans are $130,000 and the rest are government loans. Even though my income is above poverty level….$1,600 a month in payments for the rest of my life is simply too much! Any advice?

    • Hi Liz,

      First off, you guys borrowed way too much money to get undergraduate degrees, and I need to make this clear so that others who read this comment may be warned from making the same mistake.

      Second, it’s possible that you might qualify for a bankruptcy discharge, but unlikely considering you guys are basically the definition of middle class.

      Unfortunately, bankruptcy discharges are mostly reserved for people who literally can’t make payments of any sort, and would essentially die because of the strain their student loans puts on their finances.

      I would still speak with an attorney just to see if there is any chance that you have a case, as it would be worth investing a couple thousand dollars into exploring that option since it could save you a lifetime of debt.

      For now though, get on one of the Income-Based Repayment Plans for your Federal loans, and start negotiations with your private lenders.

      Tell them that you can’t afford to make the monthly payments you’re currently facing, that you’re considering defaulting on the loans and ignoring them forever (threatening them that they won’t get ANY money out of you), but that you’re willing to negotiate a new deal, with a smaller total amount due, and better repayment conditions.

      You’re going to have to be tough with the private lenders because they do this stuff for a living, but their job is to make sure that they get as much money as they possibly can from each of their borrowers, and if they believe that you’re really going to cut them off completely, then they might budge.

      Good luck!

  62. Do you have any recommendations for an attorney in Oklahoma that might be willing to look at our case as we have $277,000 in private student loans? Thank you.

    • Sorry Amber, but I don’t have any relationships with attorneys and can’t offer you any advice here. I would check Yelp reviews, call 3-5 different offices, speak with any of them that offer free consultations, then go with whoever you feel more comfortable with.

      Sounds like you guys have a pretty large debt hanging over your head. As long as you’re not making great incomes, you may have a shot at getting it discharged.

  63. Weird question:
    I have federal loans for undergrad. I got into med school and had to take out private loans as my school had not graduated it’s first class yet, and we were no eligible for US Dept of Education loans. The loans were provided by the owner of the school at 8.5%. COMPOUNDING. Also, since my school was not recognized by the US Dept of Education, I also had to maintain enrollment in grad school while simultaneously attending med school or I would have had to pay my loans while in med school.
    I am now a single mom to 1 child in residency. My prospects for income are 130-180K/year in primary care. I currently cannot even pay interest on my loans /month is greater than my take home pay.

    My student loan debt when I graduated med school was 500K. With compounding interest it will be appx 800K when I finish residency.

    I know I can’t get rid of my US Dept of Ed loans. Do you think I have a chance of discharging the private loans ? Guessing they make up at least 400K of what I owe.
    After malpractice and taxes come out, even if I live well below “my means” and put everything toward my debt, the compounding interest on the loan is going to kill me and I don’t think I’ll ever get on top of it. I’m 40… my kid’s going to be going to college in 7 years…

    Do I have a prayer of ever getting out from under this?
    And if not, is it unethical to accept hundreds of med students to a school and only allow them to take the student loans that you provide? Should I pursue something under unethical lending practices?

    • Hi Jesse,

      Actually – you can get rid of your U.S. Department of Education loans, that’s the easy part. Get on one of the Income-Based Repayment Plans, make minimum payments, and then have your Federal loans discharged via the Public Service Loan Forgiveness Program. You’ll qualify for that after just 10 years of making minimum payments.

      The Private loans are the hard ones to get rid of, especially because you’re going to be making so much money as a Doctor. You may think that $130,000 – $180,000 doesn’t sound like much, but that’s a whole hell of a lot more money than most people make these days.

      The only possible thing that may give you a shot at getting these loans discharged is that they’re going to be outlandishly high. $800,000 is an absolutely ridiculous number, and the court may want to help you get out from under that because it’s unreasonable.

      You need to speak to a lawyer though, and right away. I do not think that the school would ever be prosecuted for what they’re doing. Wasn’t it clear to you how this would work from the outset?

      Is it really unethical for them to get you a loan that they think you’ll be able to pay off in 30 to 50 years down the line? Can’t they assume that your $130,000 to $180,000 per year income is enough to pay back the debt, as long as you’re allocating enough income towards paying it off?

      The only saving grace here is that you do have an insane amount of debt that a reasonable court and judge may find totally unreasonable, especially considering that it was lended to you by the institution who provided your education. That does sound suspicious, and you might win some favor if that’s the tack you choose to pursue.

      I’m concerned that if you try to start an unethical lending deal here, you’re going to look like you’re seeking excuses for making a poor financial decision, and that would wipe out the possibility of ever getting approval for a loan discharge.

      Speak to a lawyer, today.

      • Thank you sir!
        Appreciate your input. I would prefer to pay off any and all of my debt. I just don’t know if I’ll be able to get on top of it with the interest.
        I will find a lawyer and a financial adviser as soon as possible.
        Thanks again,

  64. Hi Tim,

    Do you have a listing of reputable lawyers you would suggest for somebody wanting to look into bankruptcy? Or maybe a list of things to look out for? I would like to make the investment to talk to one, but I have absolutely no idea what to look for in a lawyer.

    I have about 120k in student loans, about 50k of which is in private loans. I have IBR for the Federal loans, which helps, but the private loans take nearly half my paycheck each month and they won’t be paid off for 20 years.

    I am only a part time teacher, making 25k a year to support both my husband and myself. My school is on that list, so I don’t think I would qualify, but I would still like to talk to a lawyer.

    Maybe the lawyer can help the lenders work with me to lower my monthly payments to more reasonable amounts?

    • Hi Renita,

      I do not have a list of lawyers, but I can recommend that you speak to someone with direct experience in working out settlements for private student loan debt.

      I’d be careful here though, because it sounds like you may not be eligible for a bankruptcy discharge. You need to do the math and look at the poverty level for your state to see if you’re anywhere near that line.

      If you make $25,000 a year, and it’s just your husband and yourself, then you may not be considered poor enough to qualify.

      This is not an easy situation, and I realize it’s extremely stressful, but I don’t want to steer you the wrong direction. Do you know anyone who’s a lawyer, or have any friends who can refer you to somebody?

      If you can’t find any other options, consider going to Reddit and posting in the legal advice forum here.

      They may be your best bet before going to someone in person and paying for advice that won’t help.

  65. I was wondering how it works to file bankrupcy with my private student loans having a co-signer…how will it affect them….also how long do you have to be in hardship to qualify for bankrupcy….Thank you!

    • Hi Michele,

      Filing bankruptcy would definitely hurt your cosigner, and bankruptcy lasts on your record for 7 years.

      Your credit will be ruined during that time period, but it eventually goes away.

  66. michael bombard says:

    I have about $300,000 in student loan debt. The majority of this is default charges. My paychecks are garnished, and only make $41,000 a year as a probation officer. With my credit ruined I fear what will happen to me. I’m 52, no savings, no chance of getting liscenses in any state as a Counselor. I’m terribly stressed 24/7, no sleep, constant anxiety, HELP.

    • Hi Michael,

      It sounds like you’ve made some very bad decisions when it comes to your student loans, but the good news is that you may have a chance of getting your loans discharged by filing for bankruptcy.

      The bad news is that you will have to put in the time and effort to make that happen. I can’t do anything for you.

      Call a local attorney and find out what your options are. Make sure they are well-versed in bankruptcy proceedings, and try to find someone who has actual, direct experience in student loan cases as well.

      Good luck.

  67. Aboout 8 years ago, my 15 year old son had huge medical problems, mostly due to addictive substances and other mental problems. He was in and out of various rehab facilities and finally it was reccommended that he be sent to an “emotional growth” high school in Montana. The cost of the school was about $125,000 for a 20 month program. I was able to pay approx $50,000 of the cost , but when faced with the total, sought relief from the school. They referred me to an educational broker who got us a “Prep-gate” -k-12 education loan for the balance of $80,000. with Bank of America.
    Initially, we were able to make the monthly payments, but when I lost my job, we requested a forberence/ deferment of the payments and were granted some time. Payments have now started again. I am 67 years old and am basically living on Social Security and doing some part time work … under $10,000 per year. My wife is also approaching Social Security age and is earning very little –$12,500 per year. We have consulted a bankruptcy attorney as our credit card debt has become a problem. We are considering Chapter 7. In order for the lawyer to help us in bankruptcy with the student loan debt, he requires a substancial retainer ($10,000) because he says we will have to sue B of A.

    He says that in order to get out of the B of A loan, it can only be forgiven in bankruptcy. First of all, do you have experience with a loan of this type? Hard to understand that it is classified like a college student loan. Our view is that it was a medical necessity. 2ndly, is it also your opinion that we will need to file bankruptcy in order to have a chance at eliminating this debt?

    • Hi Paul,

      I wasn’t even aware that these types of loans existed. I’ve never heard of “Prep-gate” loans before, but I will definitely be looking into them when I have the time.

      I would seek a second opinion from another lawyer, just to make sure that you’re not wasting your money.

      I have no idea what your odds are on having that loan discharged via bankruptcy as I’m not familiar with these types of loans at all, and it sounds like you guys may be making too much money to qualify for the discharge, but that depends on how many other dependents you have, the laws in your local area, etc.

      It’s never easy to have student loans forgiven via bankruptcy proceedings, unless there’s an overwhelming amount of debt and very little income to support it, but it does sound like you may have a shot at this.

      I just wouldn’t want you to spend the $10,000 for nothing, which is why I think getting a second opinion (and perhaps a better price), might be a good idea.

  68. The year I graduated from high school, my father was murdered and my mother was a remarried house wife. My father had no life insurance and social security stops at 18 no matter what! My stepfather’s income proved way too high and as a result, I was ineligible for any financial assistance. My stepfather and mother believe that college is a privilege and not a right, so they got me a credit card at 17 to establish my own credit because they said they would never cosign my loans. As a result, my student loan interest rates are 12% annually. So I went to Temple in 2005 and halfway through I switched my major. I had one class to go to graduate, but could not get a loan to finish. I worked for a year to save the money but had to start paying back my student loans 6 months after. I have over $120,000 dollars in student loans and I’ve never made over 20,000 a year. The first year, Sallie Mae had me on a payment plan of $150 every 3 months (their versionof deferment) . When that year was up, they told me to pay $900 per month, and 2 months after I lost my job. I told them I lost my job and sent them proof of unemployment and they told me there wAs nothing they could do. This went on for another year with people calling and harassing me. One person from Sallie Mae even told me that I don’t have a job because I’m lazy! Then the next year they said it was my last chance to make a deal at $350 a month. I got a new job making 16,000 a year and I agreed to pay the $350 a month, which I have been doing from 2014 to 2015. I don’t have a house, a car, and I’ve been using a flip phone on my family plan and I’m approaching 30 years old. I can’t even afford to start a family. Yesterday, sallie Mae sent a letter saying that they will be ending this $350 per month “deal” next month, and it will go back up. I have been struggling for 5 years and I went to Temple to see if I can beg my stepfather for extra money to go back, yet Temple University said that they no longer offer my major and I willhave to start over. Without a degree, I do not see higher income in my future. Do you think this would make me a good candidate for chapter 7?

    • Hi CiarrA,

      Sorry to hear about your situation, it definitely sounds extremely stressful!

      I would definitely consult with a lawyer, because it sounds like you’ve got a great chance at arguing that your student loan debt is interfering with your ability to provide for basic living standards. You should pursue this with total commitment, because it may be your only chance at getting this debt erased.

  69. Tim
    I have been writing a blog for several years about finding solutions to the $1.2 Trillion student loan debt that is growing faster today than ever before. I now beleive that both Federal and Private student loan bankruptcy need to be reinstated.
    I spent hours most days looking for students that have been able to pass the burner test I have had very little success
    Would you please give 5 examples…

    I would like your thoughts

    Thank you


    • Hi Tony,

      Thanks for stopping by, and your Blog looks fantastic by the way! I am totally on board with your sentiments, and am hoping that bankruptcy laws are changed to make it easier for people to get out from under crushing student loan debt.

      My opinion is that we’re building a student loan bubble about as dangerous as the real estate bubble that popped in 2007, and I’m pretty scared about what will happen to the economy should this thing pop.

      The best examples I’ve found for people who were able to pass the Brunner test (or one of the other test variations in play) was from an article written over at Get Out Of Debt dot Org, which you can find here.

      It’s not all that recent (dates back to July, 2013), but I do think it provides some good examples of people who were fortunate enough to receive approval for discharging their private student loan debt.

      Thank you for stopping by and commenting!

  70. Do you think it would be possible to discharge 325k in student loan debt? I only make about 36k a year and theres just no way that I could pay that off. I have defaulted because I can only pay 2 of the private student lenders the rest I just can’t afford.

    I never even finished my undergrad degree. Would this be an option Ch. 7 Bankruptcy?

    • Hi Anthony,

      I do think you might have a shot at getting this discharged, considering it’s a third of a million dollars in student loan debt, and that you only make a third of a hundred thousand dollars a year.

      It doesn’t seem like there would be any way to possibly ever pay that off at your income level, so a court may side with you and rule that this debt is placing an undue burden on your life.

      I have to ask though – how on earth did you manage to rack up that much student loan debt without finishing your degree? To be completely honest, that’s the highest number anyone has ever come to me with!

  71. I got kicked out of school through no faught of my own they received a judgement, put lien on my husband’s property, he purchased before marriage they will 10% of my retirement which is only $728.00 amonth they want $500.00 a month this a private loan, when I asked will this affect my husband they said no, he did not want me to take out the loan, I became disabled heart trouble, depression, back troubles’ this is a LVN program to help people and they do not care if I die with all the stress this is causing me the Goverment will work with you these people are the devil no way out I already told them I’m sick no money they keep come she say’s we won the judgement we don’t care that’s what she is saying you owe the money I gruduated from another school I was late with my responce because I could not walk are see and had a blood infection for over two year’s help will they shut down my husband checking account if I file Banrupcy, because that little money pay’s the rent and other bill’s and can they make us sell our home. Wish someone would have warrned me about this company and school.

    • Hi Dan,

      I’m sorry to hear about your situation. What is the school and what is the private lender that you’re working with?

      Fortunately, the Federal Government offers an excellent program that might help you, called the Total Permanent Disability Discharge, which allows you to completely wipe out any student loan debt if you’re fully disabled and can no longer work or go to school.

      I would suggest that you look into this right away, especially if your health problems are preventing you from being able to earn an income or study.

      You can get more information about TPD discharges here:

      For your question about filing for bankruptcy, I would advise that you speak to a lawyer about this, as I do not want to offer misguided legal advice here, but I do not believe that they will shut down your husband’s checking account if you file for bankruptcy.

  72. Margaret Gardner says:

    I am 69 years old, am being sued for cosigning private student loan in 2006, student graduated, was working has not paid on the loan since 2010. I am trying to get my own bills in order so i can retire. If i have to pay this loan off it will take 9+ years at what they are asking for monthly. They offered a settlement of $34K but i do not have that kind of money laying around. I would like to know if anything is being done on the student’s end of things. Are they taking her to court also?

    • Hi Margaret,

      I’m sorry to hear about your situation, and unfortunately, there’s no way for me to give you that information.

      I would fight this with everything you’ve got. Have you spoken with a local attorney yet? Don’t agree to anything before speaking with a lawyer and finding out about your options. You may have co-signed on the loan, but you shouldn’t be completely responsible for the debt.

  73. I am being taken to court for my private student loan. The fed is already garnishing my paycheck for the federal loan. I have 3 dependents, and I make under the poverty line in my state. I know this because I do qualify for and receive public assistance. I think I am a candidate for bankruptcy relief, but will be speaking to an attorney later this month. What I am wondering, is when the private loan company secures the judgement against me, does it automatically mean garnishment from my paycheck? And if it is then a judgement, and not an outstanding loan, can I then qualify for bankruptcy relief?

    • Hi Dawn,

      You’re going to want to speak to the lawyer about this. I am not a lawyer and it would be irresponsible for me to provide you with any legal advice.

      Wish I could help further, but I definitely don’t want to steer you in the wrong direction. If you want a quicker answer, my suggestion would be to ask the same question here:

      • Hi. The student loan that I am seeking relief from was not used for educational expenses. Is it possible that I can get links to some of your research to present to the bankruptcy attorney?

  74. Hi, Tim! Here is my situation:

    I graduated from a private ministry school with a Bachelor’s, with about $48,000 in private loan debt. The only job that I have right now is as a dishwasher in a grocery store/restaurant. I make about $1,000 a month, most of which goes toward loan payments. I can hardly afford transportation, I can almost never pay for my own food, and I cannot even pay $200 as rent to my family, whom which I live with. I am in talks to work in a school in Honduras, which is my fiance currently lives, but I do not believe that I would be able to cover my loan debt if I were to live down there. I am looking into as many options as possible, but I am wondering if filing for bankruptcy is a viable option for me. Thank you!

    • Hi Alfie,

      I would certainly speak with a lawyer about your situation, and definitely consider the bankruptcy discharge. It sounds like you’re living below the poverty line, so you shouldn’t have too much trouble proving that student loan debt is crippling your ability to meet basic needs.

      Be careful though – if you’re taking vacations, buying new personal items regularly, etc., then the court and judge are not going to believe your argument. If you’re really barely struggling to get by, then you’ll at least have a shot at getting your student loan debt discharged.

  75. Hi –

    I’m currently filing for bankruptcy and was wondering if it will affect anything if I consolidate my loans before the case is done? I am going to try to get them discharged either way, but I was wondering if I should do the consolidation or wait until after I find out if they were discharged?

    • Hi There,

      I would recommend speaking with a lawyer about this. Because loan consolidation changes the legal structure of your debt, I don’t think you should be doing that while in the process of filing for bankruptcy.

  76. Hello,
    I have about 54k in federal loans that are being repaid on IBR and another 68k in private loans that I have not been able to keep up with. I am making only 35k a year (good pay, but not enough to keep up with IBR payments AND private loan payments, car payments, food, gas, car insurance ect). My private loans have been in default for awhile and have been sold from one collection agency to the next, over and over. I cannot keep track anymore of who owns what or how its been split up. I recently got a letter from a “law firm” claiming about $34k worth of the $68k. My question is: is it true you should never claim the debts are valid? Dispute them as invalid and force the collection agency to produce proof? Also, if this law firm owns about half the private debt now, where might the other half have gone? Another collection agency? I dont care that they have destroyed my credit and I can never hope to own a home or car EVER for my whole life, but I am terrified of wage garnishment as I can already barely get by. I know I will not qualify for discharge because I can still maintain a “minimum standard of living” but I think that is just terrible. I didnt go to college to achieve a “minimum standard of living,” I went there to actually have a comfortable life. Now I am 100x worse off than if I had never gone to college in the first place.

    • Hi Melanie,

      I’m sorry to hear about your situation – once your loans go into default it pretty much becomes the Wild West, and the biggest problem is that the debt collection agencies and law firms will say or do just about anything to scare you into paying them as much as they can squeeze out of you.

      I would suggest that you try to get your loans discharged via bankruptcy, because you aren’t making that much money, and you owe significantly more than you make each year.

      I don’t want to offer advice on never claiming the debts are valid, because this is a legal issue and I’m not a lawyer, but if I were in your shoes, then yes, I would force them to produce proof (absolutely!).

      One thing you might want to consider is getting some advice from a lawyer who specializes in student loans, as they would be your absolute best bet on determining the proper course of action here.

      I wish I had better information or more optimistic advice for you, but this is a tricky situation and I don’t want to steer you wrong.

      Good luck out there, and please come back to update me on what happens next. Keep your fingers crossed and don’t give up!

  77. Tim,

    I took out over $125K to pay for my medical degree. However, with the growth of HMO’s etc., my income has never exceeded $125K. With 3 kids etc, I have made my payments on time. It has been a big burden on my family and my ability to save for retirement. My question is that these loans originated between 1988 and 1992. My understanding is I do not qualify for Income Contigent and therefore cannot have my loans discharged at the 20year mark. I find this very unfair. After paying 20 years of payments, I still owe more in principal than I originally took out (due to several forebearances in my early years and residency deferment). I sanything being talked about us older borrowers?

    • Hi Terence,

      I am in total agreement with you that the situation you’re facing is entirely unfair. President Obama played total politics when he instituted a student loan debt relief program that only worked for recent borrowers (people likely to vote for him anyway), and which essentially screwed faithful, long-time borrowers like yourself, who have oftentimes already paid off more than they originally borrowed in the first place!

      The good news is that there is a light at the end of the tunnel. According to the President’s 2015 fiscal year budget, his Pay As You Earn program should be opening up to ALL holders of federal student loan debt, meaning that no matter when you borrowed, you’ll be able to get enrolled in the program.

      Forget about the Income Contingent Repayment plan though, what you need to look into is the Public Service Loan Forgiveness Program. Since you work in the healthcare field, you might be able to qualify for a PSLF discharge at some point in time. It’s unlikely that you’ll receive credit for the payments you’ve already made (I haven’t seen that on the agenda for any updates to the law), but at least you could start getting credited for payments you’re making now.

      Should everything go according to plan, Pay As You Earn (President Obama’s forgiveness program) and the Public Service Loan Forgiveness Program would allow you to receive loan forgiveness after just 10 years of qualifying payments, which is likely to save you a great deal of money if you still over more than $125,000.

      Don’t give up! Check out my my page about the Public Service Loan Forgiveness Program, then contact your lender if you believe that you qualify for the benefits, and start working toward your eventual loan forgiveness.

  78. hi. my fiance is a co-signer on a private loan. his “FRIEND” that he co-signed for lives out of the country in jamaica. she has a goo job and no kids. my fiance has been busting his but trying to stay a float with this loan. he has two jobs works odd hours and seven times a week. he had to get an other job just to pay for the loan because she makes no effort to take over the loan. he has tow car accidents on his way to work to pay for the loan. he had to move back with his father. he also has a son. we live together and i of course help him anyway i can but i am afraid that he will hurt himself one day trying to pay this loan. he has developed a terrible sleeping schedule where he can literally fall asleep standing. he has made all the payments on the loan but he also has his own bills to pay he sometimes just barely makes it .. can he be qualified to file bankruptcy??

    • Hi Enrika,

      I would recommend that he speak with a local bankruptcy attorney to find out if he might qualify for a discharge. His case sounds like one that a judge would offer leniency over, especially since he’s just the cosigner who was left holding the bag when this friend of his fled the country.

  79. It’s informative and encouraging to read people stories and to take action ASAP. I have a question that no one has asked yet: Does filing for bankruptcy help or hurt your cosigner?


  80. Hey, so I went to an international school in Scotland as I thought that a degree in English would be a good idea. Came home, got a job teaching at a University as an adjunct, but I needed an MA in Applied Linguistics for the full time. Done. Now I’m making $40k a year and my student loan payments are over a grand a month… I LITERALLY do not have enough money. My fiance has been helping me financially, and I just can’t do it anymore. I had to put my loans (private) into a I will only pay interest for two years thing, and it’s about to run out. I have over 100k left of student loans… but what do I do? Is this an option?

    • Hi Kp,

      Sounds like you’ve gotten yourself into quite the pickle. I don’t know that a bankruptcy discharge would be realistic for you, because it sounds like you’re still making too much money ($40k is well over the poverty line, especially for a single person without any dependents), but you have accumulated so much debt that you may have a chance.

      If I were you, I’d contact a local bankruptcy attorney to ask them for advice. It may cost a couple hundred bucks, but if it could save you $100,000… wouldn’t that be worth it?

  81. Tim,

    I just want to thank you! This is the most impressive and informative article that I have read and could find anywhere. I finished graduate school at Columbia University in 2005, intent on designing educational programs.

    I haven’t had a job in my field with an income that affords me to pay down my loans, live comfortably, and achieve the things I want for myself.

    I’ve been unemployed for the last 6 months, and finding it difficult to find any gainful employment. I would have benefited greatly with some solid objective financial advice before I took out federal loans and private loans to cover an Ivy League education.

    For the federal loans…there’s a bit of leeway there with multiple deferment and forbearance programs… but the private loans are pretty unforgiving.

    I’ve talked with many reps from Sallie Mae and they won’t offer me forbearance or deferment because I exhausted those options when I did a
    teach abroad program and later was in grad school, and no options for lower payments or lower interest.

    Financial aid counselors at Columbia advised me to go into default and pay whatever I can when I can. With no job, a diminishing bank account, and lingering loan debt along with the continued costs of living, I cant help feel trapped!

    Your website and this article has been so helpful and empowering towards making some decisions to get ahead.

    I’m considering bankruptcy for the private loans.

    My next step, as you advised is to talk with a bankruptcy attorney.

    • Hi Angela,

      Thank you for stopping by and sharing our story!

      I’m sorry to hear about what you’re going through, and even more upset that it’s becoming such a common occurrence these days – so many recent graduates are in the same position as you, dealing with unmanageable debt.

      Hopefully, new legislation will be forthcoming soon, because we need to get everyone back on their feet, signed up for realistic, affordable repayment plans, and working toward paying down the loans that they took out, but without facing excessive penalties for over-borrowing.

      I hope you get good news from the bankruptcy attorney, and would love to hear how things go, so please stop back and let us know what you find out as things progress.

      Good luck!

  82. Hi, in 2006 I started with 35k student loans both private and federal. Now it’s made it to almost 60k basically from capitalized interest. My payments kept increasing and with no help from the lenders I found myself overworked and stressed out with no hope. I always paid the minimum whenever I could but it kept increasing and no one cared. So last year I filed ch13 because my student loans payments was increasing and causing so much stress in my life. I was told that Ch13 basically shackles the lenders from collections but and the end of my program I will still owe the balance PLUS interest. My attorney isn’t really helpful in fighting the student loans. He basically tells me that there’s nothing I can do and that we can only hope that Congress changes the laws to allow student loan to become dischargeable again. I feel that it’s not impossible for me and I want to fight the student loans but there’s isn’t much help.

    • Hi Jen,

      It’s possible to get your private student loans discharged via bankruptcy, but only if you satisfy the conditions of one of the tests, and are able to prove that paying off the debt is preventing you from affording basic necessities like food, shelter, etc.

      You might want to speak with a different attorney, and focus on finding one who has specific experience working on bankruptcy cases involving student loans.

      It’s not easy to get this done, but it certainly is possible.

  83. Hello!

    I’ve been out of work since 2013 and still can’t find a job. Sallie Mae put my private loans in default. Can I file for bankruptcy? Also they claimed they charged me off January 31st, but it was stated on their website that my loans were in school forbearance. What should I do?

    • Hi Kimberly,

      Your best bet would be to consult with a lawyer to find out about your changes of getting a bankruptcy discharge. You’ll need to be able to prove that the loans are causing an undue financial burden on your life – basically preventing you from being able to pay for food, shelter, and other necessities, but it is possible to do that in some cases.

      Sorry to hear about the trouble you’re facing, it’s not easy to pay off your loans without stable employment, and it tends to just make things worse the longer the situation lasts, since interest will continue to accumulate along the way. Get on top of this ASAP and speak to a local lawyer with experience in student loans bankruptcy cases.

  84. Sandra Phily says:

    I have close to $95000 in PRIVATE student loan debt! I’m thinking chapter 13 will help me in some way and seeking a bankruptcy attorney (hope to conference with by end of week). I teach in Georgia and now make $42000 p/ year. It will soon be time to make regular monthly payments of $1500 or more p/ month, since my payments were deferred for going to grad school (for a Masters degree to up my salary) also (used Federal loans to pay for grad school). I made payments on my private loans around $120 per month for some of the interest. Do you think chapter 13 “might” be feasible? I do have federal loans and was eligible for Pay as you Earn, which has helped. I just need my private loans to work the same because $1500 p/month is not possible for a single person of no dependents but has living expenses. This coming up school year will be the first year in about 7 years of Georgia teachers not facing furlough pay (because of election year for state governor…how interesting). Thanks in advance for your feedback.

    • Hi Sandra,

      You are going to need to speak with a local bankruptcy attorney to find out if you have a chance at getting the student loans discharged via bankruptcy, but from what I can see, I don’t know that it will work.

      The problem is that you’re making $42,000 per year, which is far above the poverty level for the state of Georgia, especially for a single person with no dependents.

      I do not think that this strategy will work for you, but I’m not a lawyer, so please don’t take legal advice from me!

      Keep your fingers crossed, and good luck!

  85. I would like to know the consequences of filing chapter 7 bankruptcy on a defaulted on a private student loan that had an original cost of 17k in 2004. That same loan is now 29k and in collections. I attended a state university and continued to take private student loans to fund my undergraduate education. I currently have 36k in debt that from private student loans which are good standings. I currently am struggling to pay rent and other student loans. The loan defaulted student in 2012. Since then it has destroyed my mother’s and my own credit. I don’t believe I am able to able to secure a lease for an apartment. I am seriously close to filing for bankruptcy within the next few weeks. My mother is a co-signer to my loans and I was informed that she would need to file for bankruptcy as well to avoid being sued. Her current monthly salary is under 2k. I earn around 1k a month with additional disability pay from the VA. I would like to know if I file for bankruptcy would I also be able to discharge private student loans that are in good standing.

    • Hi Mike,

      I wish I could offer you some advice here, but you’re going to need to speak to a lawyer. It would be extremely irresponsible for me to comment on your situation, especially since the advice you get could determine what you attempt to do, which is likely to have a major impact on your financial life.

      Please speak with a local attorney who has experience on successfully getting private student loans discharged by filing for bankruptcy, and ask them for an honest appraisal of your situation.

      Typically, you can only qualify for a discharge if you can prove that the loans are having a major negative impact on your life, basically causing an “undue burden”, which means preventing you from achieving a basic standard of living (like not being able to afford food, shelter, clothing, etc.).

      It’s possible that you could get an approval, but I wouldn’t want to promise you something that can’t be delivered.

      Keep your fingers crossed, talk to a lawyer, and good luck!

  86. Jamie Hernandez says:

    I have a question to ask. In 2007 I took out two private student loans that were $25000 each to attend a audio engineering school that was located outside of my state that was a 7 month program. I lived on these loans while I went to school and did my internship. I finished the school and winded up moving to another state to do my intership which I completed. I was told at my intership that I would have to stay doing another intership for awhile which they did not know how long before they decide to hire me as a paid employee. To let you know this was a full time intership 40+ hours a week and working odd hours. There was no way I could survive living in Miami by myself with no pay so I decided to move back home in New Mexico. So here in New Mexico I got an internship working on movie that lasted two months. Samething working odd long hours and no pay. I was told that I would have to do like 5-6 interships before I could work for the union. I’ve have also tried other places to get into but of course I had to do internships with no pay. This became an issue becuase I am a single mother that has one child and am raising on my own. My sons father two years after I recieved the student loans, got incarcerated and will be in there for 19 years. So with him locked up I have no help financialy to raise my son. Having that kind of job will not work for me as long as I”m raising my child. I also had a job making good tips and was paying down my debt and then the recession hit and I was no longer able to pay down my debts anymore and every year since then my income would drop $5,000. Right now Sallie Mae has me on a income base repayment program that I have been on for 3 years now. First year was at 1% with payments of $336 and third year I’m at 4% with payments of $466 and next year I’m worried. What sallie mae is trying to do is they are trying to get me back to 9% where I was originally was before I got on this program. I’m not gonna be left with anything. Right now all I have is $100 for the month after all my bills are paid. Also I just got a new job making a little bit more than last year but it’s still not gonna be enough to make future payments. I don’t even quailfy for assistance because they say I make to much. Right now my income is $20,000 a year and my student loan is at $74,000. Do you think I might have a good shot at going to court? I also tried looking at the department of educations website and did not see my school on there. Also about 3 years ago I filed for a chapter 7 bankruptcy can I reopen it again to do an advisory proceeding? I hope to here from you thank you.

    • Hi Jamie,

      Unfortunately, I can’t give you good legal advice, but I would recommend that you speak with a local bankruptcy attorney (try calling whoever handled your original Chapter 7 Bankruptcy to ask them for advice) to find out if it seems like you’ve got a shot.

      It sounds like you’ve got a chance, but Bankruptcy courts and laws are interpreted at the local level, and I’m from Southern California, so I have no idea what would happen in Miami.

      If you can’t get the debt discharged, keep in mind that President Obama’s student loan forgiveness program just got updated in a major way, making the Pay As You Earn repayment plan available to anyone with outstanding Federal student loans.

      In December of 2015, you’ll be able to enroll in the plan, which caps your monthly payments at just 10% of discretionary income, and offers comprehensive loan forgiveness after you’ve made 20 years worth of full, on-time payments.

      That may or may not help you, but it’s definitely worth looking into.

      Good luck!

  87. Travis Adams says:

    I have a question regarding raising a defense. My goal from the start of my college education was to become a doctor. With the expectation of making 150k-800k a year (depending on specialty) I did not hesitate to take out student loans in excess of 200k. That was for tuition and room and board for 4 years of undergrad, 2 years of graduate, and 1 year of Med school. However I was unable to keep up with the rigors of med school and a family so I dropped out. I was luckily able to find a great job at $81k but the crushing payments (40% of net income) is ruining my family. Is there anything I can do? Would my circumstances be a good defense to raise in court or will my good income automatically disqualify me?

    • Hi Travis,

      Unfortunately, I don’t think you’d be able to qualify for getting your loans discharged via bankruptcy, because at $81,000 a year, you’re making far more than what the Government deems as necessary for a family, even a large one. Have you looked at the poverty line income levels recently? They’re set at appallingly low numbers, and are likely to end up disqualifying someone like you from a benefit like this.

      However, with that said, I would advise that you speak with a local lawyer who specializes in bankruptcy law, and who has experience getting student loans discharged, to see what they think. It might not cost you anything, or it might cost a few hundred dollars, but it could stand to save you over $200,000, so I think it’s worth it.

      Good luck!

      • I have over 98,000 in private student loans. My yearly income is $11,400.00 a year, and I became disabled after graduating, and I can not make the minimum payments, and still be able to live period.
        Do you think I could qualify for discharge of my private student loans.

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