Ben Franklin may have been a wise founding father, but he completely underestimated Congress in the 21st century when he wrote, “In this world nothing can be said to be certain, except death and taxes.”
If he had the ability of foresight, he would have said, “In this world nothing can be said to be certain, except death and student loans.”
As an obligation that is impossible to escape, nothing is quite as tenacious as student loans. Even with taxes, a statute of limitation requires collection efforts to begin within a certain time or the creditor loses the legal right to collect. But there is no statute of limitations on student loans — the loan will follow you from being a senior in college to being a senior in the rest home.
In bankruptcy, after a certain time period, even income tax can be discharged or wiped out. Criminal fines can’t be wiped out in bankruptcy — and neither can student loans.
The only exception for student loans in bankruptcy is if you are able to make a showing of undue hardship. In order to understand what is meant by undue hardship, let me tell you a story:
Doug was diagnosed with diabetes when he was 9. He grew up, went to college and earned a bachelor’s degree in sociology, working part time while going to school. He got a job right out of college in 2005. Over the course of his education, he took out a little over $30,000 in student loans. So far, the classic Great American College Student Story, right?
Doug’s job only paid him a little over $12,000 a year. Within a year of getting his job, he started to have vision problems related to his diabetes. For the next two years, Doug underwent surgeries and dialysis for his health problems, culminating in a kidney and pancreas transplant in 2008.
The result of these surgeries left Doug legally blind, with his right eye replaced by a prosthetic. Doug’s family lives in rural Ohio, where his sister and father care for him. He does not have access to public transportation and has only a small disability income at the age of 31.
Doug’s circumstances are not undue hardship. He still needs to pay his student loans according to the 2010 bankruptcy court decision, where I got the facts for Doug’s story. See, In re Wallace, 443 B.R. 781 (2010).
Not all is completely lost if you owe student loans and are having a hard time paying them back. A couple of websites that have very valuable information are the National Consumer Law Center’s sponsored website, www.studentloanborrowerassistance.org, and the U.S. government website on student loans, www.myeddebt.com. Good legal counsel can also help.
Not only are student loans almost impossible to escape, government-backed student loan collectors can garnish without suing you, intercept tax refunds, garnish Social Security benefits and revoke professional licensing. To steal a quote from Elizabeth Warren, a Harvard law professor and current candidate for the U. S. Senate in Massachusetts, “Student-loan debt collectors have powers that would make a mobster envious.”
As a society, we profess to value education and the contributions it brings to society as a whole. But when it comes to paying for that education, the focus is entirely on the student, regardless of any actual benefit bestowed by the education or of the life circumstances of the student. Student loans guarantee only one type of higher education: the higher education of the student loan debt slave.
E. Kent Winward is an Ogden attorney. He can be reached at 801-392-8200 or firstname.lastname@example.org.