Let Student Loan Debt be Erased via Bankruptcy
At first glance this may seem like a liberal idea but the writer is Ike Brannon, a member of the George W. Bush Institute.
From the Weekly Standard.
‘Student Loan Relief Now’
My father is one of the reasons that student loans cannot normally be discharged via bankruptcy. Such an outcome was never his goal: quite the opposite, in fact, because exempting student debt from bankruptcy relief makes little economic sense and is patently unfair to the students saddled with such debt. A sensible reform of this law could slow tuition growth and put a lid on exploding student debt while sparing young adults the debilitating stress of a debt they can never hope to repay.
The path by which a small-town lawyer inadvertently helped change bankruptcy law began shortly after the Supreme Court in 1977 ended prohibitions against lawyers advertising. Soon after the decision my father placed an ad for his services in the Peoria Journal Star, making him the first lawyer in Illinois to advertise.
He knew that the novelty of an ad for legal services would create some buzz around town: However, he wanted a lot of buzz. So his ad—a 1-inch-by-2-inch display buried amongst the box scores on the sports page—read “Student Loan Relief Now: Discharge your Debts via Bankruptcy.”
Mission accomplished: The editorial page of the same paper thundered against such a tawdry ad shortly thereafter, back when such a thing mattered greatly, and a local TV station chimed in. A federal judge referred to my father as a shyster in court for publishing the ad, which earned the judge a formal censure and created another media storm. My father found himself in the news quite a bit in the ensuing months, and as a result became known as the bankruptcy expert in Central Illinois. His practice exploded: At one point he filed the majority of bankruptcy cases in the area.