Student Loan Debtors Seek High Court Standard in Debt Discharge

Consumer advocates are calling on the U.S. Supreme Court to provide a uniform, nationwide standard for what debtors must prove to eliminate student loan debt in bankruptcy.

Wiping out student loan debt through bankruptcy is exceedingly difficult. The bankruptcy code requires proof of “undue hardship” to shed student loan debt, a term that’s generated widely disparate interpretations from federal appeals courts.

Now, groups like the Center for Responsible Lending and the National Consumer Bankruptcy Rights Center are rallying around a case from the U.S. Court of Appeals for the Fifth Circuit that the justices are being asked to consider.

Bankruptcy ...