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The Justice Center News blog features our advocacy on issues affecting low-income New Yorkers today and the latest CBJC happenings.  For press releases, click here. For publications, click here.

Student Loan Debt Options

Potential Options for Student Loan Forgiveness & What You Can Do Now

by Ben Mattison December 2, 2016

New rules put forth by the Department of Education could make it easier for college students whose schools have been shut down or committed fraud to get their loans dismissed, according to a recent article published in Consumer Reports. Recently, several high-profile for-profit colleges have been forced out of business, leaving students enrolled in their programs without a degree and often carrying large student loan debts.

According to a recent brief issued by the National Endowment for Financial Education, nearly a third of millennials with household incomes above $75,000 doubt that they can pay off their student loans. The situation is even more stressful for low-income borrowers. An annual report published in October by the Consumer Financial Protection Bureau’s Student Loan Ombudsman stated that one in three low-income borrowers who have “cured” a defaulted loan in the past year were likely to default again the following year. In an effort to help, some employers are increasingly including student loan repayment programs as part of their employee benefit packages.


Bankruptcy Filing 
& Other Options

Filing for Chapter 7 bankruptcy protection could be an option for borrowers who meet certain criteria. A recent pair of videos produced by the City Bar Justice Center’s Consumer Bankruptcy Project, with support from the American College of Bankruptcy Foundation, provides information on how debtors may be able to use the bankruptcy process as a tool to deal with unmanageable student loan debt.

However, filing for bankruptcy can be a complicated process, and individuals considering bankruptcy as a way to deal with student loan issues should speak with experienced attorneys or legal services providers before they do so.

Different types of debt relief are available to those employed in public service or working as certain types of teachers. To learn the full range of options out there for discharging student loan debt, visit studentaid.ed.gov.


Student Loans in Bankruptcy Part 1: Gathering Student Loan Information

Watch Part 2: Discharging Student Loans in Bankruptcy.

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