It is high time to revisit the bankruptcy laws regarding student laws -- both the system already in force disallowing discharge of federal student loans in bankruptcy and the current scheme to hide private loans' special treatment in bankruptcy claims.  Granted, no one should be able to live the high-life while ignoring his/her obligations to repay student laws. To do so would hurt the whole system and keep needy borrowers from legitimate access to education-related funds. On the other hand, as recent news accounts attest, the student loan system has deep pockets and much greater fiscal concerns that bankruptcy abuse. The ethical reasons behind the initiation of bankruptcy court was to free hard-luck borrowers from debtors' prison. There must be a way for people to put past errs behind them and start afresh -- especially when tuition costs can put people in debt over $100,000. Add interest (which is fixed once a borrower obtains a consolidation loan, preventing him from *ever* taking advantage of refinancing at lower interest rates) and time (try 20 to 30 years) and that can bring monthly payments to $800 or more a month. That's a hole some unfortunates truly may never be able to dig out of -- while loan companies and unethical educators shamelessly enjoy perks at borrowers' expense.

It's absolutely insane that PRIVATE student loans enjoy special status. Can the editors of this (great) site please give us a list of the lawmakers involved and name the appropriate committees so we can write to express support?  Of all the organizations keeping an eye on the bill, I have yet to see any that list this information.  On the other hand, you can bet your bippy Sallie Mae & others will be crying big crocodile tears & forecasting gloom & doom if it passes.  (The only thing I'd like to see added is a provision criminalizing the loan-sharking they've been engaged in so far!--retroactively!) 

Like most of us do when we are young we make mistakes.  As most of you know at age 18 you can start with credit card debt and add on Student loans just to get an education and follow the American Dream.  I was attending a college for a full year and decided to attend a what I thought would be a better school that would not except the credits I had in the first school so I started all over and got myself more in debt.  The school pitches to the students and parents that living expenses plus tuition must be loaned if obviously the parents or the students cannot pay in full because classes will be run 24 hours a day and students that attend this school cannot keep jobs, so thats what I did.  I am now so behind in debt of student loans and want to have a fresh start and actually appreciate the benifits of going to college.  Why should people with credit card and other debts get to start fresh and they can do it over and over.  I studied and got my degree and have learned from my mistakes.  Now till I retire I will be paying student loan debt.  I have both Federal (in good standing) and Private (default) Loans and I want to be able to breath again.  What can we do to be involved?

I have two Sallie Mae Private Student Loans that I believe should have been discharged in my bankruptcy that I filed on 10-15-2005 right before the new law went into effect on 10-17-2005. To make a long story short, would anyone know,  were private student loans able to be discharged in bankruptcy prior to the law changing on 10-17-2005? Sallie Mae claims they were not but they are the last people I would believe. Thanks for any help. Jim Stover

Like James (comment 9/9/07) I also have private student loans that I thought would be discharged in my bankruptcy, which was filed in November 2004. Of course Sallie Mae and the other loan holder National Education claims they were not discharged because they are "student loans". I asked them if they are guaranteed by the fed. government and if they are a not-for-profit. They said NO they are Private loans and a for profit entity. I said then I see no reason why these private loans, like my other debt would not be discharged in my bankruptcy. Anyhow they keep bugging me and I told them I am not paying because they were included in my bankruptcy in 2004 (prior to the newer 2005 legal standards) and I see no reason that they are not discharged, since they are not federally guaranteed loans. Anyone have any ideas about this? Am I right or am I wrong that prior to 2005 private student loans held no special status legally. OR is there some other legal loophole I don't know about that these companies are relying on. Tina

 

 

Naive and young, I signed on the dotted line with no clue that I was selling my soul.  My loans have more than doubled since graduating 12 years ago.  I have suffered severe depression, anxiety and lost out on job opportunities and even a place to live because of my student loan status.  All I wanted was an education and my "education" has done nothing for me.  I can't even get my transcripts. Something needs to be done about this. 

Private student loans will NOT be getting special treatment in bankruptcy much longer. The 2005 revision is under attack in the courts as we speak, and will be struck down. In addition, the nondischargability of federal student loans in bankruptcy is also under serious attack, and there will almost certainly be changes there also. I made a specific attack against the private student loan revision that Scammie Mae got inserted into the 2005 bankruptcy revisions.

Hang tight, after my case (Hupp V. Educational Credit Managment Corp., SD-CA) works it's way thru the 9th Circuit, we will see some big changes.

 

 

 

 

I too am in the same boat as many others when the subject of studemt loans is raised. We as students and former students took these loans in the hope of attaining not only a education but the foundation of what we would need for the job market--skills. Some of us achieved our goals and gained what we needed to get the job we had our sights set on and are attaining the monitary reward that is needed to pay off the student loans that we took to finance our education. Others, well, they fell short of their goals and ended up with less than what they expected. Either way, there was a risk involved. Risk on the part of the student and no risk on the part of the lender. Either way, the lender is going to get his. The student is going to get it also.

Risk, it should be carried EQUALLY. The student should repay his student loans at the appointed time and the lender should assume the risk of knowing the student could default on the loan. The federal government should do more to cover the cost of higher education as many other countries do. The primary reason our government doesn't is due to the fact that there is no guarantee that it will pay off for the government. We are a capitalistic society and money is the driving force for all that happens in this part of the world.

Students should be able to discharge their student loans in bankruptcy as they can other non secured debt. Everyone knows there is risk involved with student loans and everyone should play by the rules that any other entity  is forced to when it comes to loans. Sallie Mae is a company. A non government entity that is in the business of making money. The sooner people start realizing what is happening to the people of this country the sooner things may turn around.

 

In 1996 when all my coworkers then 22-25 decided to all file bankruptcy on their student loans.  I berated them and told them I'd Never file for bankruptcy.  I was fresh out of college.  2008 and my student loan is now $79,000.  I don't make enough to pay the near $1,000 monthly payment.  I have called, written and pleaded with Panhandle Plains out of Amarillo Texas to let me pay what I can afford.  That's $280 per month.  They refuse to take the payment, won't consider my fiancial hardship, and they're rude everytime I call.  When I don't send money and just before the loan defaults, they call with a suggestion that I defer the payments.  I get a 6 month forebearance and the loan increases these days by about $15,000 every 6 months.  Until the laws changed I'm going back to school via the internet.  This will hold them off.  I wish someone would tell us who to write and I wish someone in our position would head up the effort to allow us to file bankruptcy on these students loans.  I got sick three years ago and had to file for bankruptcy.  I was in bad enough shape to file on my house I inherited, car, everything else, but the student loan just stayed.  It's just wrong because our parents can't afford to send us to Harvard, and we take a loan to go to JR. College, we're penalized.  The first time Panhandle Plains sent me notice that my loan was coming due, the monthly payment was $260.  I was making exactly $700 per year. My apartment was $400 and my car loan was $250, Insurance $70.  My parents were helping me out and I was trying to build a career with the degree I had.  Like another poster said, it's a gamble.  I gambled and lost.  My career NEVER took off.  I'm now working in another field and my income is climbing.  Too bad I didn't build a career early on in this field.  But why is it that we both gambled and the loan company ALWAYS wins.  They gambled on me, to make a career that could have yielded a million bucks.  It didn't yield that amount.  That's like going in on a fixer upper home with a friend and expecting the friend to pay you back your half regardless of whether the home is a good investment.

I graduated 9 years ago. My student loans that were with Sallie Mae now are at a collection agency and have way more than double. It is around $183,000. I am not kidding. I had filed bankrupcy twice due to my career not taking of. I never thought this could happen, I had a dream of having an education and to be successful. I never counted on my misfortunes. I married 7 years ago, I have two girls and I can not fully enjoy motherhood and fully embrace it because there is not even one day that goes by that I do not think of my student loans. I am extremely depress, I can't sleep at night...There was one men from Sallie Mae that told me that I should have thought twice before having children because I need to pay my loans first.....They suggested to go to William D. Ford Federal Direct Loan Program but I looked at the application and they want my husband to sign. He has no student loans, I had this loans way before I met him, we are having hard time to make ends meet. I am afraid that they would go after him. I really do not know what to do, If to talk to the collection agency and expalin to them that I have a 2 year old and no one to care for her but me. I can't work for now. Any one have any suggestions of what to do????? But even, if I could work, I could never make my monthly payment.....

Hello,

i have 2 student loans.  One with the Federal Govt and one with a private lender.  My bankruptcy was filed with the court on Nov. 21st and my meeting of the creditors was Jan 3rd.  After that my attorney said to wait for the letter to arrive and that he would contact me if anything popped up.

In December I recieved both loans via mail/email and I paid them before the due date.  Both were paid on 12.10.07. This month (Jan) I haven't recieved a bill from either of them?  Does anyone know why the communication stopped?  When I go to the website of the private loan it lists in the loan details as "verified bankruptcy".  Does anyone know what that means? 

To me if they want me to pay they will continue to mail me bills?  Am I correct in my thinking.  Even the website for the private lender shows amount due as zero.

I don't want to call them that is for sure.  Should I just ride it out??

Thanks for you help!

I have a PRIVATE SIIGNATURE  Loan from Sallie Mae.  I filled for Bankruptcy before the new law went into effect October 2005.  I was discharged in February 2006.  Sallie Mae came to me immediately for payment in March.  I had a death in the family and had to go into forebearance.  Five months into the forebearance, I got a credit report.  All 3 reportiing agency is Reporting the SallieMae loan as included in Bankruptcy. I called them to inform them of this, they said I had to show them proof, so I sent the letter I got from the Bankruptcy Court that just stated my Bankruptcy is discharged with no additional notes.  I also sent them the schedule where I had included them in my bankruptcy.   I did not hear anything form them for about 3 months and now, they are starting to harass me.  Can someone please help me on this... Based on my understanding, the credit report gets all their information from your creditors, so if my student loan was not discharged, why is Sallie Mae as recently as December 21st, 2007 reporting the loan as a Discharged in Bankruptcy at the 3 agency.  PLEASE HELP ME!  I am really confused.

Marie

Last October, another poster, Paul Hupp, said that he has challenged the protection of private loans in the Ninth Circuit court. Does anyone know the outcome of this case? I have checked the court's web-site but the only reference that can be found is who has the appropraite jurisdiction.

The constitutional legal challenges, mentioned above, to both federal and private student loans by a debtor is still being litigated and will not be finished for some time, at least 18 months. Maybe much longer. The case is several steps away from a final determination.

That case is currently seeking discretionary review before the 9th Circuit Court of Appeals. The people involved are fairly confident the private student loan exception to BK discharge will not hold up. The federal loans are another story-it is a wild card.

 

I am `trying to understand how it seems that some contributors to this post had private student loans discharged in 2004 and I was told by my attorney it was impossible. Can there be any retroactive relief?

 

JM

Private student loans were dischargable before the October 2005 BK revisions. If you filed BK before then your private SL could be discharged, but not after.

BK law is not retroactive.

I have called various lawyers regarding my private loans. A few lawyers have told me to come in but the majority told me to be careful with those who wanted me to go see them because these loans will not be discharged. Right now I am paying $400 a month. Since the loans are private they can not be in forbearance while I finish my masters. In Miami-Dade County there is a huge budget shortage. It is said that teachers will have to pay their own insurance and might not get our raises. I have no idea what to do. My husband and I car pool. We only have one car to try and save money. There is no way on earth we could afford another car or even a higher rent than the $800 that we pay...What should I do?

My husband and I have over $200,000 in private student loans and over $150,000 in federal student loans.  I am currently not working and my husband is a teacher.  When our loans enter repayment, the monthly payment will be about $3,000!  My husband doesn't even make that much per month and my degree (HISTORY-Lib. Arts) will not land me a high-paying job.  We are going to have to get some of these loans discharged.  We are currently driving one car that is 13 years old and we have two children in elementary school.  HELP!  We are going to have to declare some sort of bankruptcy for the private loans at least.  We are not trying to get out of paying for our education but we will only be able to afford a couple hundred dollars a month, not $3000!  Is it really going to be over 18 months before any private loan BK is passed?

I borrowed $76,000 in private student loans and now that I have finally landed a good job I still cannot afford to pay them.  Now AES is telling me I owe them $102,000 after origination fees, accrued interest, etc.  That is $1,029 per month!  I can't afford it now, nor can I see myself trying to pay extra on the principal.  If I am forced to pay these loans for 30 years that will total $370,440!  I understand why certain things are non-dischargeable in bankruptcy, but I don't understand why these lenders are given special consideration.  This is so depressing.  I wanted an education, not a debt that would haunt me to the grave.

I too am falling victim to Sallie Mae's private loan nightmare. I took out my loans  two or more years ago. Part of that time I was working on my master's degree, but then put it on hold when I had my son in March of 2007. Since then I have been harassed, threatened, and basically called a liar and scam artist by Sallie Mae, when I was unable to start payment of the private loans. They want over $1000 a month and have now bullied me into putting my loans in forbearance twice, which they were kind enough to waive the $100 forbearance fee, but tacked on nearly $5000 each time for the forbearance itself. I am drowning in all this debt, I am disabled and my disability got worse after I gave birth and has been on a downward spiral ever since. I live on $600 a month from disability, so obviously I can not pay over $1000 a month to Sallie. When I tried to explain this to them and negotiate a lower payment they were rude and even went so far as to accuse me of getting pregnant so I could claim my disability had gotten worse so I could then use that as an excuse to not pay them. I know that sounds crazy but that's what one voice behind the phone told me.

I can't seem to find a lawyer to touch this case in BK court, although I have heard that these loans can be discharged in EXTREME cases. Well I am not sure what constitutes extreme, does anyone have any knowledge on this, I am terrified that these loans are going to ruin my life and I am dealing with depression as well as my physical disability. Any advice would be appreciated.

 

 

I have borrowed about $50,000 in private loans. My estimated monthly payment for both loans is right around $800 and I earn around $1200 monthly. You guys do the math. I know I have a responsibilty, but all I wanted was an education, not a $375,000 debt that i'm gonna carry all the way to my grave. I haven't filed for bankruptcy yet, hoping there will be some changes to BK Law. At 18 I had no idea what I was doing to myself!!

I can relate to a lot of  the  blogs on here. I'm a single mother that is not  receiving child support. I have $39,000 of  private loans and $17,000 in federal loans. I'm in default  with my private student loans  based on them not  working  out  a payment  plan with me. I  have to pay  $717 a month on my private  loans -- mind you this  does not include my federal  loans.  After taxes, I make about $1,700. This makes me hate the fact I even went to school and received an education. I feel in certain circumstances America should allow  people to file for  and bankruptcy if it  will hurt taking  care of  any  dependents and everyday  living.

This causes a lot of confusion. In reality there were not many truly "private" loans made solely by for profit entities prior to the change in law in 2005. Prior to this, most private loans were originated by a for profit bank, but made under a program guaranteed by a "non-profit" agency. These types of loans, although they appear private on the surface, were not dischargeable even prior to the change in 2005. Of course, most of these "non-profit" entities, like TERI, are just front organizations for a big for profit operation that securitized the loans and made money. However, with the recent credit crunch TERI has had to file for Chpt. 11. We should watch the worsening economy to see how it affects the private student loan business as well as bankruptcy legislation.

Someone please inform me regarding this. I read in the post that there is a possible Private Students Loan BK protection for students on the horizon. Is this true?

I took out 40,000.00 in a WACHOVIA private student loan. I consulted a bk attorney as I could not even afford the clotheS on my back,  much less of the $780.00 a month they were asking for after I completed an MBA degree that has provide me with no good job. I still work in the class of employment where an AA degree is the requirement.

It would be great if there is hope for people with financial hardship to file for BK on private students loans, since they are for-profit organizations and should have some level of risk as well, which is why they charge interest.

Olu

Sacramento, CA

Oh this touches a nerve...

I went to school on an"under-privileged white persons grant" because we were poor. Obviously, when you are poor, your parents, and thus you, lack the knowledge, connections and savvy to succeed quickly if at all. In other words - some people come out of womb equipped with skills that some of us have to go  college to acquire. Not only that, as an artist and writer, I left college with a degree in English Lit./Creative writing -- not in itself a lucrative field. At one point in my schooling, as a high A's student, I attracted more funding. The dolly bird in Financial aid took it upon herself to switch a GRANT that I was awarded with a LOAN because the loan was higher than the grant! I took issue with this since I was not consulted about it, to no avail. I was working and going to school at the same time just to avoid future debt as much as possible.

When I left school everyone was telling me not to pay it back as they were not. Back then the debt was $10,000. I paid it as best I could with the occasional forbearance. I had it down to $8,000 when at the end of the year I did not receive my payment book. I called the Dept of Edu and was sent on a merry-go-round of offices as each so-called employee passed the buck around to about 5 different states -- I even got the same guy twice who refused to help me and passed me on again. I was on the phone for the better part of an hour - PAYING for all these long distance calls mind you -- and received nothing.

I waited for the automatic shipment of the payment book, making payments on old slips I had left over from forbearance periods. Receiving nothing, I went the round of calls again. Same story. No payment books. Coming from my background, I did not know what to do except distrust the lender and be unsure that if I made the payments anyway that they would be received by the right office and not go down a black hole.

In 1998 I moved to the UK because of a relationship. When I got there, I sent a change of address form to the Dept of Edu. I got no response. I sent another one. No response. I figured I would never go back to the US again anyway so I gave up the struggle. Life being what it is,  I came home for a month in 2006 and discovered that letters and things were being sent to my parents house all those years, although there were still no payment books as I had asked my mother to send anything bulky-ish on to me. 

Now, I haven't lived with my parents since 1978!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I went to school on the opposite side of the country!!!!!!!!!!!!!!!!!!!!!!!

Why were they sending ANYTHING to my parents?

I moved back to Seattle in 2007 to discover that it has become the 'most overpriced city in America' I got a job that provides me with the barest minimum needed to live. The relocation wiped out my savings. I have no car and am therefore locked in to living here for quite a while, even though I can't afford it. I have lots of old friends here. that is why I came back. As a writer and artist, It is the first time in my life that have had to consider  the possibility that I will have to give up the work that keeps me sane in order to keep a roof over my head.

The Dept of Edu sikked a slue of sleazy collection agencies after me that had fraudulent information about my payment history, were rude, aggressive and therefore untrustworthy. Now they threaten to garnish my meagre wages if I don't pay $164 per month. I will now have to either be thrown in the street or starve at this point and they will give me no time to get on my feet, find a better job, NOTHING. My lawyer friends tell me to file for bankruptcy as an undo hardship case. I didn't want to do that but I have no choice. I found this website looking for people who had succeeded in that.

Cheers and good luck to all of you. They shove these loans down your throat when you are in school and then stitch you up  later. We need protection NOW!

Arlene Hebert 

There has been no legislative changes made yet, nor have there been any court decisions that change the status of private student loans in bankruptcy. There is legislation that has been introduced in the Senate to make all private student loans dischargeable (even those guaranteed by non-profits) and there are several court challenges underway to the current law. However, do not expect the bill (S 1561) to move very quickly (The bill was introduced by illinois Senator Dick Durbin, but there are no co-sponsors) and expect the student loan lenders to put up a tough fight to defeat it. Moreover, even if there is a court decision in the future that overturns the non-discharegability of student loans (private or federal) it is not automatic that decision will become binding precedent everywhere in the country. However, you should check very carefully which type of loans you actually have. In order for the loan to be excepted from discharge (if it is made by a for profit bank) it must be a "qualified education loan" under the definition of the statute or made under a program funded by a non-profit. Generally, if you can deduct the interest on the loan on your tax return it is non-dischargeable. However, even if you can't deduct the interest, it may still be non-dischargeable if it was made under a program funded by a non-profit. This is an emerging area of law, so make sure you work through this with your attorney carefully and make sure you are comfortable he/she has a grasp of the situation fully before agreeing to a course of action. Not many BK lawyers will want to get involved in the complexities of a student loan discharge case and even if they do, the litigation costs could be very expensive in and of themselves. Moreover, even many experienced BK lawyers do not even know the difference between federal, private, for profit and non profit student loans. Make sure you are comfortable the attorney knows the differences before agreeing to have them represent you. However, even if your loans are ultimately non-dischargeable, it may be possible to get some temporary payment relief by including them in a Chapter 13 payment plan. Talk to your attorney to decide what is best for you.

"Moreover, even if there is a court decision in the future that overturns the non-dischargeability of student loans (private or federal) it is not automatic that decision will become binding precedent everywhere in the country."

 

 

If the case has requested declaratory and injunctive relief, which virtually all con law challenges have, then, yes, it would apply to any jurisidiction, anywhere in America.

It's sickening and I feel so taken advantage of with my private student loan. I took out the loan to better myself. I went to a school to take classes to earn my MSCE certifications and  to make a better life for my son and myself. Just as school let out for me I was diagnosed with diabetes and had no health care. I could not find that great job the school told me they would help me find. They provided no help with job placement as promised. I was left on my own . That is when my loan became due and I found out my loan was a private unsecured loan and that I could not have it deferred and it didn't matter if I went back to school or not.  I had no job and medical bills. I could not afford the $238 payment.  I never found IT job for what I went to school for and went back to my area of expertise: mortgage lending. Over the next few years I struggled to pay the loan and after being offered forebearance after forebearance I ended up with a $311 payment. I looked into consolidation to lower my payments but did not find any information that this was even possible and got the run around when I tried to investigate.  Due to the mortgage crisis I lost my job while pregnant. I could not work and my student loan was put in default because my husband could not afford to help me keep it up. I am about to declare bankruptcy which I thought I would never do no matter what. It sickens me that I still will not be able to discharge this loan. Due to my medical issues and being unable to work and now unable to find work having to start in yet another new line of work, perhaps I will be able to declare a hardship. I don't know, I just think it's sad that some of us are looking to better ourselves with education and these private loan people take advantage of us. They won't even work with you when you want to pay them back but just can't afford the payment. They won't budge and have no resolutions. Wish I knew they were the devil in disguise back in 2001 and that I was selling my soul. Only difference is it took a little signature and blood was not required to sign it.

OK, but it seems the

This is why I hate posting things on the Internet, becuase it is impossible to have a rational discussion without someone who disagrees with you personally insulting you and attacking your credentials. Yes, I have litigated cases (too many for my liking), but no I am not going to to tell you which ones they are, because they are still ongoing and I am not going to reveal my identity on the Internet, where everyone and their mother (including my creditors) can read it. But that is besides the point.

The constituional challeges are long shots, because the courts have shown little willingness to help student debtors so far. Court challenges are by their very nature weighted towards the rich corporations who have the resources to litigate this type of thing and are hopelessly stacked against the poor pro se student debtor. Log onto Pacer and check the Hupp case file. He has been stymied by the courts at nearly ever turn. His case is a long shot at best to acheive what people hope it will: make all student loans dischargeable in bankruptcy. Even if he is successful, it is going to take a long time and will not help many student debotrs who face penury right now. Of course, we should support his efforts. He has taken on a tremendous task and is subjecting himself to tremendous personal sacrafice to pursue his case, but we should not give people the impression that a Brown vs. Board of Education type legal decision on student loan dischargeability is around the corner. That would be totally irresponsible.

Our best shot for relief, within the medium term, is to push Congress and the new President to change the law on the front end. Dick Durbin's bill is a start, but even that does not go far enough. Hillary had a proposal to make ALL student loans dischargeable after 7 years again. I have not heard anything from Obama on this subject other than that he just paid back his student loans (not sure if this is a good thing or not for us?).

Look, the economy is going in the tank. The subprime mortgage crisis is getting all the press, becuaue it is more immediate, but underneath that there is an entire generation of young Americans saddled with an unimaginable amount of debt that for most only grows as they get older. That has got to have an effect on the economy too, so I imagine something HAS to give on student loan dischareability at some point. In the end, the ability to gain a fresh start from debt you cannot repay is as much an economic issue as a moral one. People who are saddled with unescapable debt are not very good consumers.

I just think that ig something is going to change it is going to get done through Congress, not the courts--who have been total cowards on this issue so far. I really hope I am wrong and I wish Mr. Hupp success, but no one should be banking on his or any other case to help them in their situation. Anyone who is facing crushing student loan debt needs to continue to consider other alternatives and should not wait for the courts to change the law.

On another issue, who is moderating this board? Can you please do something to prevent this from becomming a flame site? We can do w/o Personal attacks and the "but what have you done?" red herring arguments.

Jeff, sorry to hear about your situation. Your case points to some of the problems with student loans that are invisible to most. The fact that the majority of your debt is private really shows the extent to which our higher education funding system is broken. Federal loans, although no piece of cake to deal with (especially if you default), are at least eligible for income contingent repayment and other deferment options. I wonder how many others are in your boat (majority of debt is private)?

Caveat: This is not meant as legal advice for your situation (or any other), but here are some ideas to consider in conjuction with your attorney: Some private lenders do offer deferments, you can try to work somthing out with them, but in many cases they will not budge. There are some lenders who also offer private loan consolidations, but the interest rates there might not be much better than what you have (although you may be able to stretch the payments out). However, if you are on the verge of bankruptcy already you probably won't qualify w/o a co-signer.

I don't know how much money you make and how much debt you have, or if you are contemplating Chpt 7 or Chpt 13; but you may want to talk to your attorney about considering a Chapt. 13 (even if you are eligible for a 7). You can include student loans in a Chpt. 13 plan, although that part that of the loans that have not been paid through the plan will not be discharged at the conclusion of the plan. However, perhaps your attorney can come up with a monthly payment plan through the 13 that is more reasonable than what you would have pay the creditors directly and buy you some time to develop your earning potential? The problem with this is interest will accumulate and you will possbily emerge from the Chpt 13 with more debt than you went in with. However, if we are lucky perhaps the law will be different in 5 years? Even if it isn't, and your life situation hasn't changed, you can probably just file another 13.

If your attorney is recommending an adversary proceeding, you really want to make sure they know what they are doing. Paying 5 to 10 grand in legal fees for a hail mary pass probably won't sit very well, if you realize after the fact your attorney had no idea what they were doing. Ask them how common these procedings are in your circuit, how often do they succeed? What are the benchmark cases on student loan dischargeability in your circuit? Find out, read them over and ask if your circumstances justify the expense. Also, you do not say whether your attorney is recommending pursuing a discharge under the "undue hardship" provision or is he/she recommending an adversary proceeding for some other reason (suchs as challenging the discharge status of the private loans)? You may want to ask your attorney if part of the fee for the adversary can be paid through the Chpt. 13 plan, if you decide to go that route.

Unfortunately, there just are not many legal options at all right now. When I spoke of considering other options above, I was referring to developing a lifestyle plan that takes this debt into account. In other words, prepare for austerity and talk to your relatives about developing a plan to protect any assets they may want to "designate for your benefit" in the future. Some people try to"live off the grid," but that is not very appealing to many who were sold the promise of a bright future through education. Part of dealing with the debt is to reconsider our priorities and adjust our life expectations all the while dealing with the emotions that arise from being a student debtor, i.e. tried to improve yourself, only to find out you did the opposite. Of course part of coming to grips with this emotionally is reconsidering what higher education is and should be about: a route to a high earning job, personal intellectual growth? What did it mean for you?

One of our biggest problems right now is that the student loan problem has almost zero visibility. Everyone is focused on the subprime crisis and gas prices because they are more immediate, while the student loan crisis materializes slowly over the course of a 4 to 10 year education. Unfortunately, too many student loan debtors are too ashamed to speak up, thinking their problems result from "bad personal choices" rather than a real socio-economic crisis in our approach to higher education and a particularly irrational bankruptcy code when it comes to student loans. We can use the legal system as individuals to gain some temporary relief from our debt in some situations, but correcting the real problem is going to require some collective action to force our political leaders to change the law and develop a more progressive and rational social policy when it comes to higher education. Oddly, the worsening economy may be our best ally, as it might bring this problem into the open and force our leaders to address it. My high school History teacher used to say that it is worse to be poor when everyone else is doing well, because your problems will not be noticed. But we still need to figure out how we as a group with shared interests can push reform forward.

One thing I would caution everyone about: Do not reveal too many personal details about your particular case over the Internet in a way that could lead you to be identified by one of you creditors. Don't think for a second they are not reading these boards and what you say can and will be used against you in court if it comes to that. 

John, I can tell you that your statments that the current cases being litigated right now, not just Hupp but all the others,  are not "Long Shots". I know the firms involved and I have seen the pleadings and filings.

 There are ***several class actions*** pending right now against SLM that have very strong chances are succeeding. Are you aware of that? Are you follwing these class action cases?

I know of at least 5 more law firms, right now, who are in the drafting stages of class actions. 

I have been involved with these lawsuits and know darn good and well that they are not "long shots". One of the reasons 11 USC 523 a8 has been on the books 10 plus years is because no one has stepped up to the plate and made a challenge-no one. You cannot get a law declared unconstitutional until you, somone, anyone steps up and puts forth a challenge.

Last, the Hupp case is not trying to get all SL's discharged IN BK. Nor is the case just limited to 11 USC 523a8-it is much more- goes after several issues, including no statute of limitations and due process violations. It is a pending case and to my knowledge has not had any decison reached yet.

BTW, this is for Tina-

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