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How difficult is it to get financial relief from student loans?

Massachusetts college students usually expect that their degrees will open opportunities for them to make enough income to pay back their student loans promptly. However, unexpected life changes and financial challenges may put a college grad under the mounting weight of a delinquent student loan.

When filing for bankruptcy, these former students may find it much more difficult to get relief from student loan debts than from other kinds of debt. For most debts, if a debtor files his or her bankruptcy papers properly and follows the bankruptcy court's procedures, he or she will probably get a discharge -- a court order saying that the debtor's creditors can no longer pursue the debtor.

However, student loans are different. In order to get discharged from a student loan obligation, the debtor must prove that they have met the three prongs of what is referred to as the Brunner test, they are:

  1. The borrower has made every effort to repay his or her debt
  2. The debtor's budget illustrates a "minimal" standard of living.
  3. Availability of future job prospects

Unfortunately, this standard can leave people waiting years for necessary debt relief. One man asked for student loan relief after he went blind from a medical condition and could no longer work despite having a college degree. While he remained optimistic about his chances, the process took him six years.

According to one attorney, as long as the lottery exists, there is always "no certainty of hopelessness." However, some researchers have revealed that many debtors can and actually do get relief from all or part of their student loan debt. While the statistics vary, the data does show that relief from burdening student loans is not impossible.

Source: The New York Times, "Last plea on school loans: proving a hopeless future," Ron Lieber, Aug. 31, 2012

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