Bill would let ‘medically distressed’ cast off student loans
The Wall Street Journal - 08/01/2014
The Senate bill is a long shot, but it would help hundreds of thousands of people, according to Northeastern University law professor Daniel Austin.
Prof. Austin, who tracks how much debt bankrupt people report in public court filings, evaluated Sen. Whitehouse’s proposal at Bankruptcy Beat’s request.
By his estimate, more than half of the people who file for bankruptcy these days have enough medical debt to qualify for the student loan discharge. The average person who filed for bankruptcy last year had about $8,595 in medical debt when filing—a dollar figure that doesn’t include what was spent in the three years before that.
Prof. Austin’s past research shows that about 30% of people who file for bankruptcy with medical debt also have student loans.