Why student loan borrowers should pay attention to these two court cases

Marketwatch reports:

One of the things that sets student loan debt apart from all other types of debt is that it’s almost impossible to get rid of it. Even those borrowers who end up in such dire financial straits that they file for bankruptcy struggle to get a fresh start free of their student loans.

But a couple of cases working their way through the legal system could change that. They raise the possibility that the courts could offer a looser definition of how hard up a borrower has to be before a bankruptcy judge can justify discharging his or her loans.

The atmosphere is ripe for the courts to consider this question, says Rafael Pardo, a professor at Emory University’s law school. Student debt has become more widespread since 2005, the last time a U.S. Court of Appeals adopted a standard for when it’s appropriate to discharge a student loan in bankruptcy. In addition, the lower courts have also had a chance to weigh in on the issue over the past several years, raising the likelihood that the Supreme Court may want to offer its opinion as well.

“It seems like there’s a lot of buzz and activity and maybe the climate is right to finally get some sort of resolution to this issue,” said Pardo, noting that in the 10 years he’s studied the topic he hasn’t seen this much legal activity surrounding it. “That makes it pretty interesting.”

Federal taxpayers are you listening.... You will be paying the bill after a judge changes the meaning of the word loan.