Law Commons^™

May The Executive Branch Forgive Student Loan Debt Without Further Congressional Action?, Colin Mark

Journal of the National Association of Administrative Law Judiciary

On April 1, 2021, the Biden administration announced that Secretary of Education Michael Cardona will consider whether the President has legal authority to forgive up to $50,000 per debtor in student loan debt without further Congressional action. This paper interrogates the leading arguments for and against the Biden administration’s capacity to forgive this student loan debt strictly using administrative action. This article first surveys the history of federal student loan forgiveness programs in the United States. It then considers whether statutes on the books—in particular, the Higher Education Act of 1965 and the Federal Claims Collection Act of 1966—grant the …

Redesigning Education Finance: How Student Loans Outgrew The “Debt” Paradigm, John R. Brooks, Adam J. Levitin

Georgetown Law Faculty Publications and Other Works

This Article argues that the student loan crisis is due not to the scale of student loan debt, but to the federal education finance system’s failure to utilize its existing mechanisms for progressive, income-based payments and debt cancellation. These mechanisms can make investment in higher education affordable to both individuals and the government, but they have not been fully utilized because of the mismatch between the current system’s economic reality and its legal, financial, and institutional apparatus.

The current economic structure of federal student loans does not resemble a true credit product, but a government grant program coupled with a …

A No-Contest Discharge For Uncollectible Student Loans, Brook E. Gotberg, Matthew Bruckner, Dalie Jimenez, Chrystin Ondersma

Faculty Publications

Over forty-four million Americans owe more than $1.6 trillion in student loan debt. This debt is nearly impossible to discharge in bankruptcy. Attempting to do so may require costly and contentious litigation with the Department of Education. And because the Department typically fights every case, even initial success can be followed by years of appeals. As a result, few student loan borrowers attempt to discharge their student loan debt in bankruptcy.

In this Article, we call on the Department of Education to develop a set of ten easily ascertainable and verifiable circumstances in which it will not contest a debtor’s …

Federal Financing Of Higher Education At A Crossroads: The Evolution Of The Student Loan Debt Crisis And The Reauthorization Of The Higher Education Act Of 1965, Camilla E. Watson

Scholarly Works

Currently, there are 44.2 million Americans holding student loan debt collectively totaling $1.5 trillion. This massive debt has a profound effect, not only on the lives of the debtors, but also on the national economy because it prevents the debtors from buying homes and cars and creating new businesses. This debt is also speculated to be a likely trigger for the next housing bubble because student loans, like the subprime mortgage loans underlying the 2008 financial crisis, are securitized and sold to investors. But many of those with student loans struggle to find jobs that will enable them to pay …

Could The Benefits Of The Public Service Loan Forgiveness Program Be Retroactively Curtailed?, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

There is a sharp tension between the expectations that hundreds of thousands to millions of persons have or will have regarding their right to have their federal student loan debts forgiven under the Public Service Loan Forgiveness (“PSLF”) program and the legitimate public concerns regarding the large costs and regressive incidence of the PSLF program’s benefits. In 2017, the Trump Administration proposed abolishing the PSLF program for future federal Direct Loans, but this proposal was not adopted. A similar proposal was made in 2019 as part of the Administration’s fiscal 2020 budget proposal, with little chance of adoption. But given …

A Timely Proposal To Eliminate The Student Loan Interest Deduction, Victoria J. Haneman

Victoria J. Haneman

No abstract provided.

The Economics Of American Higher Education In The New Gilded Age, Paul Campos

Publications

No abstract provided.

The Future Of Lower-Income Students In Higher Education: Rethinking The Pell Program And Federal Tax Incentives, Camilla E. Watson

Scholarly Works

As the costs of higher education have soared, the value of Pell grants has declined, making it more difficult for lower-income students to obtain an education without being hopelessly mired in debt. This article traces the evolution of the Pell program and discusses the diametrically opposed proposals of Presidents Obama and Trump to reform federal funding for higher education. The article proposes an alternative plan that would require a redirection of a portion of the funds from the Pell program and a reshuffling of the current tax incentives for higher education. The advantages of this proposal are that it would …

Reforming The Tax Incentives For Higher Education, Camilla E. Watson

Scholarly Works

Federal spending on higher education has long been controversial, primarily because it has grown exponentially since the 1950s but it has produced a system which many regard as too expensive and grossly inefficient. The soaring costs are placing higher education beyond the reach of many Americans, and of those who enter college, less than half complete their degrees. Particular criticism has been directed toward the education tax incentives, enacted mostly in the late 1990s, which shifted federalfunding for higher education from direct benefits to students in the form of grants, loans and work-study programs to indirect benefits through the tax …

Tightenting The Loophole: The Role Of Fee-Shifting Statutes In Resolving The Growing Problem Of Servicing America's Student Loan Debt, Katheryn E. Marcum

West Virginia Law Review

No abstract provided.

Bankruptcy And Education, Keith Sharfman

Faculty Publications

(Excerpt)

Bankruptcy law interacts with education law in a number of respects. A bankrupt educational institution loses access to student financial aid, and its accreditation status is excluded from the bankruptcy estate. Actions by accreditation agencies against bankrupt educational institutions are not subject to the automatic stay. And absent a showing of undue hardship, student loans are not dischargeable in bankruptcy.

The exceptional treatment of educational institutions and their students in bankruptcy reflects a fundamental tension between the goals of bankruptcy law on the one hand and education policy on the other. While bankruptcy law generally seeks to maximize value …

Discharging Student Loans Via Bankruptcy: Undue Hardship Doctrine In The First Circuit, Anthony Bowers

University of Massachusetts Law Review

Student loans are presumptively non-dischargeable through bankruptcy, but the undue hardship doctrine provides an equitable “safety valve” for the indigent. To date, the United States First Circuit Court of Appeals has yet to select a single legal test for determining undue hardship under the United States Bankruptcy Code (“Bankruptcy Code”). Within the jurisdiction of the First Circuit, bankruptcy courts are free to choose an approach to evaluate undue hardship. In an effort to ensure consistency throughout the bankruptcy courts within the First Circuit, it would be ideal if the First Circuit would choose one of the undue hardship tests. However, …

A Timely Proposal To Eliminate The Student Loan Interest Deduction, Victoria J. Haneman

Nevada Law Journal

No abstract provided.

The Promise Of Plyler: Public Institutional In-State Tuition Policies For Undocumented Students And Compliance With Federal Law, Nancy B. Anderson

Washington and Lee Law Review

No abstract provided.

The Unsupportable Cost Of Variable Pricing Of Student Loans , Jonathan D. Glater

Washington and Lee Law Review

No abstract provided.

Risk-Based Student Loans , Michael Simkovic

Washington and Lee Law Review

No abstract provided.

Playing The "Get Out Of College Free" Card: Dischargeability Of Educational Debts In Chapter 7 Bankruptcy, Julie J. Heimark

Pepperdine Law Review

No abstract provided.

Mortgaging Human Capital: Federally Funded Subprime Higher Education, Jean Braucher

Washington and Lee Law Review

The for-profit higher education sector, primarily funded by federal student aid dollars, produces both the highest debts and defaults and lowest completion rates for its students. In response, the U.S. Department of Education (DOE) has promulgated the Gainful Employment Rule to require for-profit colleges and universities to meet either repayment or debt-to-income benchmarks to remain eligible to receive federal Higher Education Act funding. This Article describes the business model of the career colleges and their rapid growth over the last decade, the history of proprietary school regulation, the limited remedies for overindebtedness of former students, and the tests imposed by …

Undo Undue Hardship: An Objective Approach To Discharging Federal Students Loans In Bankruptcy, Aaron N. Taylor

All Faculty Scholarship

A debtor seeking to discharge student loans in bankruptcy must prove that paying the debt would cause an undue hardship upon him and his dependents. Undue hardship, however, is an undefined concept, flummoxing debtors, creditors and judges alike. The result of this ambiguity is rampant inconsistency in the manners in which similarly-situated debtors (and creditors) are treated by the courts. This article argues that the undue hardship standard should be replaced by a framework that uses debt service thresholds to determine the propriety of federal student loan bankruptcy discharges. Eligibility for discharge would depend on outstanding loan amounts, debtor income …

Predatory Ed: The Conflict Between Public Good And For-Profit Higher Education, Osamudia R. James

Articles

No abstract provided.

Race, Educational Loans & Bankruptcy, Abbye Atkinson

Michigan Journal of Race and Law

This Article reports new data from the 2007 Consumer Bankruptcy Project revealing that college graduates and specifically White graduates are less likely to file for bankruptcy than their counterparts without a college degree. Although these observations suggest that a college degree helps graduates to weather the setbacks that sometimes lead to financial hardship as measured by bankruptcy, they also indicate that a college degree may not help everyone equally. African American college graduates are equally likely to file for bankruptcy as African Americans without a college degree. Thus, a college education may not confer the same protective benefit against financial …

"Your Results May Vary": Protecting Students And Taxpayers Through Tighter Regulation Of Proprietary School Representations, Aaron N. Taylor

All Faculty Scholarship

This article argues for stricter regulation of proprietary (for-profit) school advertising and recruitment practices and proffers specific proposals for effectuating this regulation. Proprietary schools play an important role in broadening access to higher education. They enroll a large number of students who are underserved by traditional, non-profit institutions. These students tend to be poorer, less educated, and older than students at traditional schools, and they tend to undertake higher education for very practical reasons. These characteristics make them particularly susceptible to deceptive marketing and unfounded promises of higher education providers. Unfortunately, some proprietary schools exploit the susceptibilities of their target …

The Nondischargeability Of Student Loans In Personal Bankruptcy Proceedings: The Search For A Theory, John A. E. Pottow

Articles

In fiscal year 2002, approximately 5.8 million Americans borrowed $38 billion (USD) in federal student loans. This was more than triple the $11.7 billion borrowed in 1990. As a rule of thumb, tuition has been increasing at roughly double the rate of inflation in recent years. This troubling trend of accelerating tuition, coupled with the fact that real income has stagnated for men and increased only modestly for women over the past two decades, means that more and more students are going to need to turn to borrowed money to finance their degrees absent a radical restructuring of the postsecondary …

A Fresh Start Through Bankruptcy: Fact Or Frustration For The Student Loan Debtor?, Barbara Linde

Seattle University Law Review

The rapidly increasing number of student loans maturing under the relatively new guaranteed student loan program have spawned a dramatic increase in the number of educational loans discharged in bankruptcy. This comment will examine former students' ability to obtain college transcripts after discharge of their student loans through bankruptcy. It will discuss the two cases holding that a private college can deny transcripts to bankrupts, but a state college cannot." Furthermore, it will inquire into the purposes of the Bankruptcy Act, the correctness of the restrictive judicial interpretation of the 1970 amendments," and alternative judicial approaches that better reflect the …