Federal Student Loans and New DOJ Guidelines

This session has been approved for 1 PA substantiative CLE credit. On Thursday, November 17 the Department of Justice and Department of Education released new guidance for the government when handling requests to discharge federal student loans in bankruptcy. These new guidelines advise DOJ attorneys to stipulate to the facts demonstrating that a debt would impose an undue hardship and recommend to the court that a debtor’s student loan be discharged under certain circumstances. The guidance provides a framework for Justice attorneys to apply in evaluating the factors that courts typically consider in determining undue hardship. It creates presumptions for some factors based on the borrower’s circumstances that should avoid unnecessary litigation. Presenter Patrick Best, Esquire of ARM Lawyers Recorded April 7, 2023