Student Loan Bankruptcy Discharges Surge to 87%
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Breaking news: Student loan borrowers are seeing a major shift in bankruptcy outcomes. Recent changes in
Biden administration guidelines have skyrocketed the success rate of discharging student
loans in bankruptcy to 87%, compared to just 61% in 2017 and 40% in 2007.
A study reviewed 652 cases from October 2022 to November 2023, highlighting how
borrowers can now better demonstrate their financial hardships. Despite over 3 million
bankruptcy filings since 2011, few have attempted to discharge student loans,
often considered untouchable. Borrowers in the study average $115,000 in debt,
with some surpassing $240,000. As defaults rise, borrowers face looming wage garnishments.
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