student loans

Attorney General Maura Healey has launched a statewide Student Loan Bankruptcy Assistance Project with the Massachusetts Bar Association (MBA) and the Greater Boston Chamber of Commerce (GBCC).

The new initiative – a product of the Student Debt Working Group launched in 2016 by Healey and GBCC CEO Jim Rooney – will match a panel of pro bono attorneys and law firms with distressed students who may be eligible to have student loans discharged in bankruptcy. The MBA will recruit and train volunteer attorneys to work with borrowers in need.

“The student debt crisis is a significant challenge that we face as a state and as a country, making it difficult for students and families to invest in their future,” Healey said in a statement. “This project will benefit some of our most distressed student borrowers – people who can’t afford the legal services they need and have nowhere else to turn. I thank Massachusetts Bar Association and the Greater Boston Chamber of Commerce for their partnership in helping student borrowers get their financial lives back on track.”

“Student debt has become a real crisis for many low-income borrowers, including attorneys and others who work in the public interest or for a non-profit,” MBA President Christopher P. Sullivan said in a statement. “Our Student Loan Bankruptcy Assistance Project will make sure these folks have someone in their corner as they seek relief from the massive weight of their student debt.”

“Reducing the burden of student loan debt is a critical issue for our region as we focus on developing and maintaining our reputation for having the most talented workforce in the world,” Rooney said in a statement. “We are so proud of the work being produced by the Student Debt Working Group, and we are incredibly grateful to the MBA’s leadership in creating this Student Loan Bankruptcy Assistance Project as well as to the lawyers who will volunteer their time to provide support to student borrowers experiencing hardships.”

Under current law, the Bankruptcy Code provides for the discharge of student debt only upon a showing of “undue hardship” on the debtor and his or her dependents. Because the legal standard for discharge of a student loan in bankruptcy is onerous, very few people – even of those who pursue bankruptcy to discharge other debt obligations – seek to discharge their student loans.

Analysis of bankruptcy filings has demonstrated that borrowers with knowledgeable representation have a much greater likelihood of success than borrowers without counsel.

Over the past year, the Student Debt Working Group has brought together leaders from the business community, nonprofits and government to exchange ideas for improving access to higher education and discuss strategies to reduce unaffordable debt and increase transparency in student lending.

AG Debuts New Initiative to Address Unaffordable Student Loans

by Banker & Tradesman time to read: 2 min