Senior parent and student loans

In the news: a 65 year old man is trying to discharge student loans he took out to finance his three children’s education.  Current student loan policy is that students under 24 years of age have to have their parents co-sign to get student loans.  If the young people don’t repay the debt, the parents are held responsible.  As most students  who want to go to college plan to do so right after high school, I predict there will be more cases like this, unless and until the whole system is reformed.  It is nearly impossible to get student loans discharged in bankruptcy.  This man is 65, and couldn’t find a job after being laid off 14 years ago.  Yet the bankruptcy court said it would not be an “undue hardship” for him to pay off nearly $250, 000 in loans!  Makes one wonder how dire the circumstances would need to be for “undue hardship.”  Although a federal appeals court urged the bankruptcy court to allow the man to discharge the debt, it is up to a bankruptcy judge.  The bankruptcy courts don’t have a history of being merciful since standard consumer protections, including bankruptcy, were removed from student loans in 2005.  Here is the article.

Dad wins court victory in effort to erase $250K in student loans

By Associated Press

April 15, 2016 | 10:15am

BOSTON — A Massachusetts man who owes about $250,000 he borrowed to put three children through college has won a major court victory in his effort to have the debt forgiven.

The Boston Globe reports that a federal appeals court has urged a bankruptcy judge to consider a settlement with the company that holds the loans to allow Robert Murphy, of Duxbury, to erase the debt.

A bankruptcy judge and district court judge previously ruled that the 65-year-old Murphy failed to prove repaying the loans was an undue hardship, as required by law.

The 1st Circuit Court of Appeals sent the proposed settlement back to bankruptcy court. It’s now up to the bankruptcy judge to rule.

Murphy says he was unable to find work after being laid off 14 years ago.

 

 

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