The Biggest Myth About Student Loans

The Biggest Myth About Student Loans by George C. Leef, Foundation For Economic Foundation

When ed debt crashes, it will hit taxpayers

It is common knowledge that students who have amassed large college debt burdens cannot discharge those debts through bankruptcy.

That “knowledge,” however, is not really the case — the laws are written to permit discharge of student loan debts in some cases. And, with the federal government pushing for broader interpretations of those laws, they are now an incentive for students to amass debt and then dump it on the taxpayers.

The “undue hardship” provision in the U.S. Bankruptcy Code says that student loans cannot be discharged unless “excepting such debt...would impose an undue hardship on the...