Most students are well aware that bankruptcy provides no debt relief for them when it comes to their student loans. At the very most they may go bankrupt to deal with their other debts, which in turn allows them some breathing room to deal with their student loan debt.
It now appears that the Supreme Court may become involved in the issue of the bankruptcy relief not be applicable for student debt. One student who has been battling the courts over this for several years has appealed his case to the Supreme Court.
It is up to the Supreme Court to decide whether they will hear the appeal but some experts believe that this court may choose to do so because it requires an interpretation of the law, which is often in conflict within the federal courts. There are two tests that are used to determine whether a student debt can be discharged in bankruptcy.
One of these is the Brunner test, the other is the totality of circumstances test. Out of the two the Brunner test is the most rigid and most difficult to pass. Legal entities advocating for students in need of debt relief are pushing for the totality of circumstances test to be the one of choice as it is more lenient. No doubt the Federal educational department is not going to want to suffer the massive loss of student debt repayment that could occur if bankruptcy were to allow the inclusion of student debt.