2015-10-20bloomberg.com

Sticking to the letter of the law might help student debtors, since government lawyers have spent years urging the courts to use the harshest definition of undue hardship, and courts have largely agreed, requiring debtors to show they have a "total incapacity" to repay their debts or that repaying the debt would "strip [them] of all that makes life worth living."

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For the government, the stakes are about as high. If bankruptcy becomes a real option for people with student loans, the Education Department will have to contend with the reality that a good chunk of the $1 trillion-plus in outstanding debt is not ever going to be recovered. That may prompt some questions about the viability of the loan program in general from the people who pay for it: the taxpayers.



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