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Hear this out loud PauseA federal judge dismissed a lawsuit brought by two conservative groups intended to halt the Biden administration's plan to cancel $39 billion in student loans for more than 800,000 borrowers.
?Filing Chapter 13 bankruptcy stops payments, garnishments, and lawsuits for student debt. It can even wipe out education loans ? if the borrower proves undue hardship. Plus, it allows filers to get new student loans during and after their bankruptcy case.
When Did Student Loans Become Nondischargeable. Student loans first became nondischargeable in bankruptcy in 1976 due to an amendment in the Higher Education Act. Section 439A of this act made student loan debt non-dischargeable until five years after the start of the repayment period, except in cases of undue hardship ...
In a 6-3 decision, the high court ruled that the Biden Administration did not have authority under a 2003 federal law to forgive hundreds of billions of dollars of student debt.
Under the Brunner Test, Borrowers must prove: Their current income and expenses prevent them from maintaining a minimal standard of living if they have to repay the debt. Their financial situation is likely to persist for a significant part of the repayment period, forcing the judge to predict their future.